St. Johns Tourism Board Gets Update on Reserves

St. Johns Tourism Board Gets Update on Reserves

While not a particularly exciting subject, reserve funds for government agencies are an important part of keeping things moving in the right direction. That can be especially true in tourism development, where unexpected events often create difficult situations for the tourism industry.

At a recent meeting of the St. Johns County Tourist Development Council, Jesse Dunn, director of the county’s Office of Management and Budget, briefed TDC members on the status of fund reserves heading into the new year.

“We are really an extension of the county administration in assisting with the (County) Commission’s annual budget process,” Dunn said. “We go through pretty much everything, including the tourist development tax discussions.”

Dunn said for county budgeting, maintaining a reserve balance is not only a good practice but there are specific state and county requirements government departments must follow.

“Maintaining reserves is a way for us to respond to emergencies,” he said, citing the Covid-19 pandemic as an example. “Certainly, initially with Covid we didn’t know what to expect so we were at least thankful we had reserves.”

Dunn explained the county divides funds into four categories: the general fund, enterprise funds, internal service funds and special revenue funds. He said the tourist development tax revenues – used to fund TDC grants – falls under the special reserve fund category. While the other three funds require reserves held to a maximum of 10% of total fund revenues, special reserve fund agencies must maintain a minimum reserve of 2%.

“Our budget process does allow us to maintain reserves in excess of statute,” he said.

St. Augustine Mayor Nancy Sikes-Kline, who also serves on the TDC, asked what the philosophy is behind the 2% minimum for the tourist development tax fund reserve.

“That’s a minimum so we certainly don’t want to draw down,” Dunn said. “In our special reserve funds, we have less of a necessity of basing it on necessary operating expenditures.”

The tourist development tax fund is anticipated to have reserves of $8.5 million in fiscal 2024 from the five categories of funding, which include the Visitors and Convention Bureau, arts and culture, recreation and leisure, administration and the beach. The beach reserve is the highest of the five, with $3.6 million budgeted for the 2023-24 fiscal year.

TDC member Irving Kass said much of the increase in bed tax collections that has fueled the reserves came from better collections of Airbnb rentals and may not continue.

“The numbers may not be as rosy as we think,” he said.