This budget adjustment is requested to ensure the Contractual Services account is properly setup to pay for invoices from McKinley County. The county has begun invoicing the city for its part in the Red Rock Park agreement, which was signed in August 2022. The agreement stipulates the county can request reimbursement from the city for operating RRP. The county has already submitted an invoice for reimbursement of approximately $146,000 for its operating RRP from October 2022-December 2022. These reimbursements are to be paid with Lodger’s Tax funds.
When the agreement was approved by the City Council during its regular August 9, 2022 meeting, the necessary budgetary actions were not taken to establish an account to pay for the reimbursements. The Tourism & Marketing Office has taken administrative steps to budget for paying for the first invoice, but further funds are needed from the cash fund balance to pay for the remaining anticipated invoices from the county for the remainder of FY23.
The first year of the agreement began in October 2022 and was prorated for the year at $337,500. Council approval is needed to draw the remaining funds from the cash balance and budget it in the Contractual Services account. The Tourism Office respectfully requests Council approval to move $197,197 from the cash balance into the Contractual Services account, No. 214-3550-432.45-90, to pay for the invoices.
The $197,197 was calculated by using the overall prorated figure of $337,500 minus the $140,303 which has already been moved through an administrative budget adjustment. If this request is approved by Council, the account will have enough to pay for the anticipated invoices until the end of this fiscal year.
As of 3/30/23, Naviline indicated the Lodger’s Tax cash balance was approximately $1.68 million.
In the budgeting process for FY24, the Tourism Office has already planned and budgeted $450,000 to pay for a full year of anticipated invoices from the county requesting reimbursement for RRP.
In addition, attached is a letter sent to the County Manager, dated April 4, 2023, indicating that the city cannot use its Lodger’s Tax funds to reimburse the purchase of a new truck for the County. However a resolution is proposed in the attached letter which will allow the city to reimburse the county for this cost (title needs to be transferred to the city but the truck will remain at and an asset of Red Rock Park.) This does not affect the need for the full amount of the budget adjustment requested above. The County also sent the City an invoice, dated March 30, 2023, requesting the full amount of the city’s funding for Red Rock Park operations and management in advance. Just as is the case with Liquor Excise Tax and Animal Protection /Shelter Services, the city reimburses for services rendered and not in advance.