LVCVA revises 2005 budget

Wednesday, April 13, 2005 | 10:43 a.m.

Room tax revenue is rolling into Southern Nevada so fast that the Las Vegas Convention and Visitors Authority has to make adjustments for how to spend it.

The 13-member LVCVA board of directors on Tuesday approved a resolution to augment its 2005 fiscal year budget and got its first look at the 2006 budget.

LVCVA officials project the tax coffers to be overflowing once again as tourism leaders take advantage of a revenue trifecta: The volume of rooms will be up over last year, a higher percentage of rooms are expected to be filled and tourists will pay more for those rooms.

It all adds up to a conservative estimate of revenue being 6 percent ahead of the previous year's total to $227.8 million.

"Once again, it's a reflection of the strength of the destination," said Rossi Ralenkotter, president and chief executive of the LVCVA. "The demand is up for the product."

The LVCVA is anticipating $183 million in revenue from the 9 percent room tax, while the agency's cut of the gaming tax will be $1.9 million. Convention center rentals and concessions will raise $36.2 million while Cashman Center will bring in another $2.1 million.

The LVCVA doesn't get to spend all the money. Some will be divvied up between the cities of Las Vegas, Henderson, North Las Vegas, Boulder City, Laughlin and Mesquite and Clark County.

The biggest percentage will go back into generating more tourist visits through advertising. The LVCVA is putting $80.1 million into advertising, a 2 percent increase over the current budget, with the total marketing budget -- including public relations, Internet marketing and research -- weighing in at $114 million.

The LVCVA plans a 2 percent increase in personnel to 513 people. Money spent on executive salaries will actually decrease -- with the retirement of Manny Cortez as president and chief executive, salary allocations will fall by 9 percent and benefits will be down by 6 percent.

Brenda Siddal, senior director of finance, explained that the LVCVA's finance staff budgets conservatively to guard against spending money that never arrives. And if more money comes in than is anticipated, the LVCVA can approve a budget augmentation -- which also occurred at Tuesday's meeting.

For the 2005 budget, the LVCVA anticipated receiving $146 million in room taxes. Now the projection is closer to $171 million, and the board approved an augmentation that beefs up general fund, capital fund and debt service appropriations.

The LVCVA's debt profile is so good that Standard & Poor's has given recently issued bonds to finance a Convention Center expansion an A-plus rating.

Moody's put an A1-Aa-3 rating on the bonds.

The LVCVA board will see the budget again next month, with a public hearing scheduled May 19.

In other business, the LVCVA welcomed a new board member to replace former Boyd Gaming executive Don Snyder, inaugurated the agency's Most Valuable Player employee recognition program and approved a marketing agreement to sponsor the Michelin Championship at Las Vegas PGA golf tournament.

Keith Smith, president of Boyd Gaming, Snyder's successor for that company, also is his successor on the LVCVA board. His colleagues put him right to work, appointing him to head the audit committee.

The LVCVA replaced its Employee of the Month program with a Most Valuable Player award. Employees who "deliver on the mission and brand promise" and showing service above and beyond expectations are given MVP award cards by supervisors. The employee collecting the most MVP cards in a month will be recognized in the next board meeting.

The sponsorship for the Michelin golf tournament, scheduled Oct. 13-16 at the Tournament Players Club in Summerlin, is costing the LVCVA $150,000. For that, the LVCVA will lease a skybox at the tournament and get six entries in a pro-am event scheduled in conjunction with the event.

Terry Jicinsky, senior vice president of marketing, said the skybox and the golf tournament entry slots would go to the LVCVA's top clients with special events coordinators recommending who gets to play with the PGA's best players.