LVCVA Budget 2010

1959 2009 Annual Budget ~ Fiscal Year 2009/2010 Las Vegas Nevada Clark County Annual Budget Fiscal Year 2009/2010 Prepared by the Finance Department Under the supervision of Brenda Siddall, Vice President of Finance and Rana D. Lacer, Director of Finance & Purchasing Las Vegas Convention & Visitors Authority 3150 Paradise Road Las Vegas, Nevada 89109-9096 (702) 892-0711 www.lvcva.com TABLE OF CONTENTS PAGE BUDGET MESSAGE President's Budget Message BUDGET STRUCTURE AND POLICY Distinguished Budget Presentation Award Organizational Chart Board of Directors and Executive Officers History of the LVCVA Facilities of the LVCVA Reader's Guide Financial Structure Structure of the Budget Document New Policies/Significant Events Financial Management Policies Marketing Policies Facility Policies Community Policies Budget Process Budgetary Controls Budget Calendar Budget Summaries All Funds Comparison to Prior Years – Total All Funds Fund Balance Analysis ANNUAL OPERATING BUDGET General Fund Summary Graphs - General Fund Expenditures Revenue Graphs - Sources of Proposed Revenues & Major Revenue Sources Revenue Summary Room Taxes Gaming Fees Use of Facilities Other Fees and Charges/Interest/Other Financing Sources General Government Organizational Chart Graphs - Expenditures & Comparison of Actual to Budget Budget Analysis Board of Directors & Executive Public Affairs Human Resources Finance Marketing Organizational Chart Graphs - Expenditures & Comparison of Actual to Budget Budget Analysis Marketing and Advertising Sales and Services Operations Organizational Chart Graphs - Expenditures & Comparison of Actual to Budget Budget Analysis Customer Experience Facilities Las Vegas Convention Center Cashman Center 20 23 24 25 26 28 29 30 31 32 33 34 35 36 38 42 43 44 46 49 55 56 57 59 60 63 1 2 3 5 6 8 8 10 10 13 13 13 14 15 16 17 18 19 i TABLE OF CONTENTS PAGE ANNUAL OPERATING BUDGET (continued) Operations (continued) Project Development Security Information Technology Special Events Graphs - Expenditures & Comparison of Actual to Budget Budget Analysis Special Events Grants & Other Graphs - Expenditures & Comparison of Actual to Budget Budget Analysis Grants & Other SPECIAL REVENUE FUND Vegas Uncork’d CAPITAL FUND Capital Projects Funds Summary Capital Improvement and Replacement Fund Capital Building and Land Improvements Listing Capital Furniture and Equipment Listing Master Plan Enhancement Program Fund Extraordinary Maintenance, Repair or Improvement Fund Land Acquisition Fund Nevada Department of Transportation Fund Five-Year Capital Improvement Plan DEBT SERVICE FUND Debt Service Funds Summary Debt Limit and Capacity Bond Coverage Historical Perspective PERSONNEL ALLOCATION Summary of Personnel Requests Summary of Authorized Positions Authorized Positions by Organizational Unit/Section Bargaining and Non-bargaining Unit Classifications STATISTICAL DATA General Fund Revenues by Source- Last Ten Fiscal Years General Fund Expenditures by Source - Last Ten Fiscal Years Use of Facilities - Last Ten Fiscal Years Excerpt of Rental Rates per Facility Demographic Statistics - Clark County, NV – Last Ten Fiscal Years Visitor Analysis - Last Ten Calendar Years Visitor Demographic Statistics – Last Ten Fiscal Years Principal Room Tax Payers - December 31, 2008 Room Tax Rate Distribution by Jurisdiction – June 30, 2009 GLOSSARY 107 109 111 113 114 115 117 118 120 121 98 99 100 104 89 93 94 95 73 74 77 79 80 81 82 83 84 72 64 65 67 68 69 69 70 71 71 May 21, 2009 To the Board of Directors Las Vegas Convention and Visitors Authority I am pleased to present the fiscal year 2010 budget for your review and consideration. This budget is the product of many months of work on the part of all the members of this organization. It represents the expected revenues and planned expenditures for the Las Vegas Convention and Visitors Authority’s fiscal year from July 1, 2009 to June 30, 2010. It has been prepared in conformance with the requirements of state law, Board policies and governmental budgeting “best practices.” The mission of the Las Vegas Convention and Visitors Authority: “To attract visitors by promoting Las Vegas as the world’s most desirable destination for leisure and business travel.” The LVCVA has the sole responsibility to market and brand Las Vegas and Southern Nevada as a travel destination. Hotels and resorts advertise and market their individual properties, while the LVCVA markets the destination as a whole. Our mission is fulfilled primarily through national and international advertising campaigns, sales efforts, public relations and operation of the Las Vegas Convention Center and Cashman Center. In addition, we market Laughlin, Mesquite and the outlying areas of Southern Nevada. The LVCVA underwent a strategic planning process four years ago that resulted in the Vision Plan that sets the foundation for establishing annual goals. The three main elements of the vision plan are Growing the Brand, Housing the Brand and Living the Brand. Although the recent economic recession has had a significant impact on destination travel and the convention industry, the priorities and issues identified in the Vision Plan remain consistent. The FY 2010 budget reflects resource allocations in alignment with those objectives. FY 2010 CHALLENGES This budget was developed in the midst of an economic crisis during which financial markets and institutions both in the United States and globally have been under extraordinary stress for more than a year and a half. In particular, the fragility of major financial institutions, the seizing of credit markets, the collapse of the housing sector and the loss of investor and consumer confidence have aligned to create a crisis that has affected all sectors of the economy. The U.S. Government has established a wide range of programs to support financial market functioning and foster credit flows to businesses and households. Prior economic downturns have had less of an effect on Las Vegas tourism than the national trends; however, the comprehensive nature of this crisis has dramatically affected the leisure and business travel industry. The LVCVA has taken a leadership role in facing these challenges by reaching out to various stakeholder groups to highlight the economic stimulus the travel and meetings industry provides to both the nation and Las Vegas. Several mission-oriented initiatives were implemented to address the economic downturn, including a massive sales call effort, convention attendance promotion programs for existing clients, booking incentive programs for potential clients and industry outreach to travel and hotel partners. In addition, significant measures were taken in FY 2009 to meet deepening and continuous declines in room tax revenue. Expenditures were reduced through cost containment measures, budget cuts, deferral of capital, a hiring freeze, and a suspension of the Master Plan Enhancement Program. These measures will continue through FY 2010 in order to ensure adequate reserves are maintained for future years. The FY 2010 budget reflects the LVCVA’s commitment to our core mission - marketing Southern Nevada as a tourism and convention destination worldwide, and also with operating the Las Vegas Convention Center and Cashman Center. Notwithstanding the cost-saving measures to address the economic crisis, the budget provides adequate funding for short-term as well as long-term initiatives that support the three major elements identified in the Vision Plan. The goal of these programs is twofold. First, advertising will focus on campaigns designed to generate immediate and spontaneous visitation for leisure activities. The high-profile Vegas Bound campaign has generated considerable national media attention and targeted a specific travel demographic – the leisure traveler who needs to get away and take a break. The second focus will concentrate on the convention and meetings industry. Activities will continue to emphasize the value of Las Vegas as a destination to conduct serious business, as well as have fun. Las Vegas has been the number one destination for meetings and conventions for many years, and marketing programs will highlight why Las Vegas brings more value to this industry than any other destination. Significant programs include: • Advertising campaigns such as: Take a Break, What Happens Here, Stays Here, and ongoing business campaigns will continue to drive spontaneous travel to the destination. • International Marketing efforts will focus on the enhancement of branding and sales programs, with a targeted emphasis on our primary markets of Canada, Mexico, and the United Kingdom. • The LVCVA will sponsor the NASCAR Sprint Club banquet, a citywide event centered on Las Vegas this December. The event is moving to our destination after 27 years in New York. • The LVCVA will also sponsor the National Hockey League (NHL) annual awards banquet for the next three years. • The LVCVA took the lead this year in the organization and management of the annual Vegas Uncork’d culinary and wine event. In partnership with Bon Appétit magazine and major hotel properties, this annual event draws visitors from around the world. The event is a driving factor in expanding Las Vegas as a destination for renowned chefs, gourmet dining and fine wine. • Targeted media efforts to promote the value of in-person meetings and business travel will be supplemented by internet and web resources for the hotel and business community, such as www.vegasmeansbusiness.com. II The pop culture phenomena of: What happens here, stays here. TM remains one of the most enduring and recognizable ad campaigns in history. The ads were scaled back in FY 2009 as marketing efforts shifted to dynamic targeted ads to drive immediate visitation. However, the effective WHHSH campaign remains a vital component of the Las Vegas image and will continue to be the foundation of our branding strategy. In 2007, legislation passed that requires the LVCVA to issue debt to fund transportation projects in the amount of $300 million, or $20 million per year in debt service, whichever is less. The first transportation project was approved by the Board of Directors and financing was achieved in FY 2009. Additional projects will commence in FY 2010 and the required financing is included in this budget document. FY 2010 BUDGET HIGHLIGHTS The total FY 2010 budget for the LVCVA is $231 million. That amount reflects a decrease of 17.3% from the original FY 2009 budget. Operating expenditures account for $195.4 million, while reserves and operating transfers for debt service and special revenue funds total $35.6 million. REVENUE  Declining room tax revenues were recognized in late FY 2008. At this time last year, room tax revenue projections for FY 2008 were reduced by $8 million dollars and estimates for the FY 2009 budget were reduced by $19 million. The monthly declines in room tax revenue grew deeper in each of the first nine months of FY 2009. Declines in the first fiscal quarter averaged 5%; however, the declines deepened as national economic conditions faltered and consumer confidence deteriorated. The largest monthly shortfall to-date was January 2009 activity, which reflected a 29.9% decline from the prior year. The year-to-date results reveal a cumulative decline of 15% from last year. Based on actual collections, room tax revenue projections for FY 2009 have been reduced from $224 million to $178 million, a decrease of $46 million. Room tax revenues in the FY 2010 budget total $177 million, 20.5% less than the adopted FY 2009 budget and a slight decrease from the current year’s adjusted budget. Room tax is projected to provide 77% of total revenues and is based on the number of lodging rooms available, occupancy rate and the average daily taxable room rental rate. Revenue shortfalls were met with expenditure controls implemented late in FY 2008 that included a hiring freeze, elimination of non-essential travel and the delay of certain capital expenditures. Those measures have continued throughout FY 2009 and will extend through FY 2010. In addition, more aggressive reductions in capital and capital improvement plan (CIP), suspension of the Master Plan Enhancement Program (MPEP), delay of the starting date for additional debt financing for the Nevada Department of Transportation (NDOT) projects and intensive line item reviews of operating accounts have identified additional savings to offset revenue deficits. III Room inventory in Clark County currently stands slightly over 152,000 rooms, with over 140,000 rooms in the metropolitan Las Vegas area. Several new properties are scheduled to open during FY 2010 providing a significant increase in premier accommodations for our visitors. However, anticipated renovations and closures of aging properties are projected to offset a portion of the new growth. Based on the varied opening dates of the new properties throughout FY 2010, revenue is projected based on a weighted net gain of approximately 4,000 rooms. For every 1,000 new rooms, Las Vegas needs to attract 200,000 more visitors annually to maintain current hotel occupancy rates. The county-wide projection for FY 2010 average occupancy rate is expected to decline to 80%. Despite the sharp fall, occupancy in the greater Las Vegas area consistently exceeds that in other major resort destinations. In calendar year 2008, average annual occupancy rates were: Las Vegas 86.0% New York 81.9% Oahu 74.9% Los Angeles 71.3% San Francisco 75.0% The most volatile factor in calculating room taxes is the average daily room rate (ADR). With hotel rooms being booked over the internet, price fluctuations are common with hotels having the ability to respond quickly to occupancy trends. The ongoing economic crisis and the resulting impact on leisure and business travel have combined to place downward pressure on ADR in every major U.S. destination. Taxable ADR in Las Vegas is on target to decrease 14.1% in FY 2009. Based on the first three months of calendar year 2009, the ADR is projected to decrease an additional 2.2% in FY 2010 to $81.13. County-wide Taxable ADR $100 $90 $80 $70 $60 $50 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 The $177 million projected for LVCVA room tax revenue represents about 40% of the total $442.5 million in room taxes that will be collected in Clark County. Other local government jurisdictions will receive about $140.6 million for schools, roads and other general government needs. The State will receive $124.9 million for public education and tourism. In addition to that, the LVCVA will return $18.7 million to the other government entities in the form of grants and pay approximately $8.7 million in debt service for transportation bonds. Rental revenue for the Las Vegas Convention Center (LVCC) has been impacted by the ongoing economic strains. Although no cancellations of large convention and tradeshows have been realized, many shows reduced square footage requirements, meeting rooms, catering and concessions due to diminishing attendance projections. Current year revenue estimates were recently reduced by $2.9 million based on actual year-to-date activity. Estimates for FY 2010 reflect only a slight decrease, due to the suspension of the MPEP program which will allow the leasing of space that had been projected to be unavailable due to construction activities. IV Other revenues include gaming fees, Cashman Center rental, interest earnings and revenue sharing on sports sponsorships. Interest earnings are projected to fall by nearly 50% in FY 2010, due primarily to declines in the Federal Funds rate and current yield projections. Cashman Center rental revenues will decrease in FY 2009 due to specially negotiated rates for the United States Bowling Congress. The nominal revenue loss is an advantageous trade for a significant local economic gain. Eighty-five thousand (85,000) participants, complemented by spectators and other attendees, are expected to generate $75 million to $100 million in local economic impact and more than 200,000 direct room nights. The championship games will be contested over 60 lanes specially built inside the facility and covers a five and half month time span from February to July 2009. REVENUE Room Tax LVCC Revenue* Other Revenue** Total Revenues FY 2009 Adopted Budget $ 224,000,000 44,936,000 10,563,400 $ 279,499,400 FY 2009 Revised Budget $ 178,000,000 42,036,000 10,713,400 $ 230,749,400 FY 2010 $ 177,000,000 44,233,700 8,859,225 $ 230,092,925 Change from Adopted -21.0% -1.5% -16.1% -17.7% FY 2009 Revised Budget reflects lowered expectations and reductions to the original adopted budget. * Revenue related to the rental of the Las Vegas Convention Center. ** Comprised of gaming fees, use of facilities at Cashman Center, other fees and charges, interest and transfers from other funds. EXPENDITURES  The adopted budget for FY 2009 operating expenditures totaled $219 million. Due to the cost containment measures taken during the year, the budget was formally reduced to reflect a total budget of $202 million. Operating expenditures in the FY 2010 budget total $195.4 million, which represents a decrease of 10.7% from original FY 2009 appropriations. EXPENDITURES (In millions) FY 2009 Adopted Budget $ 10.1 35.8 88.6 48.7 8.9 26.7 $ 218.8 FY 2009 Revised Budget $ 13.4 32.0 89.8 39.4 6.8 20.4 $ 201.8 FY 2010 $ 11.7 31.0 86.5 39.5 7.7 19.0 $ 195.4 Change from Adopted 15.8% -13.4% -2.3% -18.9% -13.4% -28.8% -10.7% General Government Marketing Advertising Operations Special Events Grants & Other Total Operating Expenditures FY 2009 Revised Budget reflects lowered expectations and reductions to the original adopted budget. V General Government includes the activities of the Board of Directors, Executive, Human Resources, Public Affairs and Finance departments. FY 2009 organizational changes included the transfer of the Purchasing and Contracts and Materials Management activities to the Finance Department. The consolidated department was then transferred from the Operations Division to the Executive Division. The move results in an increase to General Government, which is offset by a reduction to Operations. The FY 2010 Operations Division budget reflects a decrease, primarily due to the Finance Department move and reduced administrative support requirements for the MPEP. Due to the suspension of the MPEP funding for permitting, advertising, reprographics, plans check fees and inspections will be deferred until the program is resumed. Within the Marketing Division, the only organizational change involved shifting Mesquite operations from Sports Marketing to the Leisure function. Nearly $6.3 million in funding will be provided to Las Vegas Events (LVE), a non-profit corporation dedicated to securing and sponsoring events that encourage visitation to the area. In addition to the LVCVA’s funding, LVE will use a portion of the earnings they have built up over several years to fund several events. The $1.4 million in supplemental special events funding will support our strategic objectives to increase travel to the destination, including the new NASCAR and NHL sponsorships. OPERATING TRANSFERS  There are no scheduled transfers from the general fund to the capital fund for FY 2010 as reserves are adequate to fund FY 2010 capital requirements. The LVCVA maintains capital sub-funds that are used for different purposes. Any capital improvement or asset costing $500 or more is budgeted in capital fund. This includes projects at both the Las Vegas Convention Center and at Cashman Center. It also includes items of furniture and equipment. The Capital Improvement Program (CIP) is a multi-year plan that includes major projects that cost over $1 million or that require multi-year planning to fit them into the building schedule. It covers everything from landscape curbing to retrofitting the convention center fire sprinkler system. The CIP project listing currently totals $72 million over the next eight years and reserves currently stand at $10.4 million. CIP expenditures in FY 2010 are limited to those necessary to comply with health, safety and security of the facility, and improvements required to maintain the quality of the facility to preserve client satisfaction. Capital Reserve is similar to the CIP in that it accumulates money over multiple years. Its purpose is to provide funding for the pay-as-you-go portion of the MPEP and owner’s contingency. Additions to capital reserve have been suspended, coinciding with the suspension of the MPEP. The pay-as-yougo portion ($68 million) of capital reserve is fully funded and approximately $10 million of contingency is funded. Transfers to the debt service fund total $34.9 million. Debt service on current outstanding bond issues is $28 million, and includes $1.7 million for bonds issued in FY 2009 to fund transportation projects as approved by the 2007 Nevada legislature. We anticipate issuing the remaining portion of the LVCVA’s contribution for transportation projects during FY 2010 and the estimated debt service totaling $7.0 million is provided in the budget. An operating transfer to the Special Revenue Fund is budgeted at $800,000 for Vegas Uncork’d. VI Ending general fund balance on June 30, 2010 is projected at $14 million. State law provides guidance for an ending fund balance of between 4% and 8.3% of budgeted expenditures. The FY 2010 ratio is 7.2%, which meets statutory guidance and internal policy. To prepare for future volatile economic conditions without detriment to operations, the LVCVA will target ending fund balance be increased to between 8.3% - 12 % by FY 2012. As we review what has been accomplished in the fourth year of the Vision Plan, and set forth the goals for year five, we are pleased with the accomplishments and overwhelming success achieved to date. Notwithstanding the current recession and budgetary challenges, Las Vegas is considered one of the top five most popular international travel destinations and the #1 tradeshow destination in North America. Responsible fiscal oversight and prudent protection of reserves in prior years have allowed the LVCVA to endure the recent revenue shortfalls without negatively affecting our mission. Flexibility in the organization allowed a shift of resources from Operations to supplement Marketing campaigns to drive more immediate travel to the destination. The previously staged components of the MPEP also allowed management the flexibility to suspend projects much earlier than would have been capable were the projects consolidated. This budget meets short terms needs, while incorporating a long-term perspective. The broad organizational goals outlined in the Vision were critical factors in the budget development. We will continue to monitor local and national economic conditions during the upcoming budget year. As fluctuations in revenues occur, we will preserve the flexibility to adjust expenditures as necessary. Facilitation of the budget process and the development of a budget document is a major undertaking. The team effort reflects the collaborative spirit within our organization. I would like to thank the departments and the Board of Directors for their efforts, support and feedback during the budget process. Lastly, I would like to thank the budget staff. They did a great job coordinating the organization-wide efforts on current year budget adjustments, FY 2010 budget and capital plan development, forecast updates, and document production. I also congratulate them on receiving the Government Finance Officer’s Distinguished Budget Presentation Award. Sincerely, Rossi Ralenkotter President / CEO V II DISTINGUISHED BUDGET PRESENTATION AWARD The Government Finance Officers Association of the United States and Canada (GFOA) presented an award of Distinguished Budget Presentation to the Las Vegas Convention and Visitors Authority for its annual budget for the fiscal year beginning July 1, 2008. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, an operations guide, a financial plan, and a communications device. The award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award. 1 LVCVA ORGANIZATIONAL CHART BOARD OF DIRECTORS LEGAL COUNSEL EXECUTIVE HUMAN RESOURCES PUBLIC AFFAIRS FINANCE OPERATIONS FACILITIES INFORMATION TECHNOLOGY SAFETY & SECURITY CUSTOMER EXPERIENCE PROJECT DEVELOPMENT MARKETING MARKETING & ADVERTISING SALES & SERVICE 2 BOARD OF DIRECTORS AND EXECUTIVE OFFICERS The Las Vegas Convention and Visitors Authority (LVCVA) is governed by a Board of Directors consisting of fourteen members. Eight members are elected officials from either Clark County or one of the incorporated cities therein. The Las Vegas Chamber of Commerce (CC) and the Nevada Resort Association (NRA) nominate three each of the remaining six members. Current members of the Board, along with terms of office, are as follows: Elected Members: Mayor Oscar Goodman, Chair Representing City of Las Vegas Term: July 1999 – June 2011 Mayor James Gibson, Secretary/Treasurer Representing City of Henderson Term: July 1997 – June 2009 Commissioner Tom Collins Representing Clark County Term: January 2005 – December 2012 Mayor Susan Holecheck Representing City of Mesquite Term: August 2007 - June 2011 Mayor Michael Montandon Representing City of North Las Vegas Term: July 2003 - June 2009 Councilman Mike Pacini Representing City of Boulder City Term: July 2003 – June 2009 Councilman Gary Reese Representing City of Las Vegas Term: February 2009 – June 2011 Commissioner Lawrence Weekly Representing Clark County Term: January 2009 – December 2012 Appointed Members: Mr. Keith Smith, Vice-Chair Representing resort hotel business (NRA) Term: April 2005 – June 2010 Mr. Charles Bowling Representing central business district (NRA) Term: July 2005 – June 2009 Mr. Scott M. Nielson Representing resort hotel business (NRA) Term: August 2007 – June 2009 Mr. Tom Jenkin Representing resort hotel business (CC) Term: December 2003 – June 2009 Ms. Kara Kelley Representing other commercial interests (CC) Term: July 2005 – June 2009 Mr. Andrew Pascal Representing tourism (CC) Term: July 2006 – June 2010 The terms of appointment for the eight elected officials are coterminous with their terms of office. The six remaining members serve a 2-year term but can be reappointed to additional 2-year terms. 3 BOARD OF DIRECTORS AND EXECUTIVE OFFICERS The Board serves as a policymaking body and employs a president to serve as chief executive officer. The LVCVA executive committee consists of: Rossi Ralenkotter Terry Jicinsky Cathy Tull Vince Alberta John Bischoff Chris Meyer Mark Olson Luke Puschnig Brad Rodgers Brenda Siddall Vacant Vacant President and CEO Senior Vice President, Operations Senior Vice President, Marketing Vice President, Strategic Planning Vice President, Public Affairs Vice President, International Brand Strategy Vice President, Convention Sales Vice President, Human Resources Vice President, Legal Counsel Vice President, Information Technology Vice President, Finance Vice President, Facilities Vice President, Resort Ind. & Business Relations 4 HISTORY OF THE LAS VEGAS CONVENTION AND VISITORS AUTHORITY Las Vegas has long been a favorite vacation destination for millions of tourists. In the early 1950s, however, community leaders realized the cyclical nature of tourism caused a significant decline in the number of visitors during the weekdays, throughout the summer months, and over the holiday season. In order to attract more visitors to the area during slow periods, a new market was needed - convention travelers. This idea became the seed that blossomed into the development of the Las Vegas Convention Center, established by the Nevada Legislature in 1955 as the Clark County Fair and Recreation Board. Its function was to operate the Las Vegas Convention Center and promote Southern Nevada as a convention-tourism destination. Original construction of the Las Vegas Convention Center began in 1957. It consisted of a rotunda, 18 meeting rooms and 90,000 square feet of exhibit space. Official opening ceremonies took place in April 1959, when the World Congress of Flight became the first convention to meet at the Las Vegas Convention Center. Resolutions passed by the Board of Directors on June 27, 1967 and March 19, 1974 led to the renaming of the Clark County Fair and Recreation Board to the current Las Vegas Convention and Visitors Authority. During FY 2002, the Las Vegas Convention Center completed one of its largest expansions, which included a two-story exhibit hall addition. It now contains more than 3.2 million square feet of exhibit hall and meeting room space. The Convention Center contains 16 exhibit halls, 144 meeting rooms, restaurants, a business center, warehouses and administrative offices. The LVCVA also operates Cashman Center, which opened in 1983. It is a multi-purpose facility built with a 10,000-seat baseball stadium, 1,922-seat theatre, 98,100 square feet of exhibit space and 12 meeting rooms. On August 11, 1998, the Board approved a name change from Cashman Field Center to Cashman Center. During the ensuing years, the function of the LVCVA has evolved into the following mission: To attract visitors by promoting Las Vegas as the world’s most desirable destination for leisure and business travel. The LVCVA’s primary source of revenue is provided by a tax imposed on hotels, motels, and other transient lodging establishments in Clark County. The rate levied varies from 12% to 13% for resort hotels and 10% to 12% for non-resort hotels depending on the establishment’s jurisdiction (see page 120 or room tax rate breakdown by jurisdiction). The division of room tax, as of July 1, 2009, is presented below: Resort Hotels State County Clark County Taxing of TransporSchool Entity Nevada tation District 2 3/8 - 3 3/8% 0-2% 1% 1 5/8% Other Hotels / Motels State County Clark County Taxing of TransporSchool Entity Nevada tation District 0-2% 3 3/8% 1% 1 5/8% LVCVA 4-5% LVCVA 2-4% The LVCVA is empowered by the Nevada state legislature to: Provide for the levy of ad valorem taxes by the Board of County Commissioners, Acquire real property through the exercise of the power of eminent domain by the Board of County Commissioners, and Issue general obligation bonds in the name of and on behalf of the County. 5 FACILITIES OF THE LAS VEGAS CONVENTION AND VISITORS AUTHORITY LAS VEGAS CONVENTION CENTER The Las Vegas Convention Center is one of the most modern and functional facilities in the world a 3.2 million square foot facility located within a short distance of more than 100,000 guest rooms. In addition to more than two million square feet of exhibit space, 144 meeting rooms (more than 241,000 square feet) handle seating capacities ranging from 20 to 2,500. A grand lobby and registration area (more than 225,000 square feet) efficiently link existing exhibit halls with new exhibit and meeting rooms, allowing simultaneous set-up, break-down and exhibiting of multiple events. 6 FACILITIES OF THE LAS VEGAS CONVENTION AND VISITORS AUTHORITY CASHMAN CENTER Cashman Center is a multi-use facility encompassing 483,000 square feet on a 55-acre site near downtown Las Vegas. The facility includes approximately 98,100 square feet of exhibit space, 12 meeting rooms, a 1,922 seat state-of-the-art theatre, 2,700 spaces for parking, and a 10,000 seat baseball stadium which is the home of the Las Vegas 51s, the AAA affiliate of the Toronto Blue Jays. Each segment of the facility is capable of functioning independently or in any combination for conventions and trade shows, business/group meetings, theatrical presentations, and sporting events. 7 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT FINANCIAL STRUCTURE Nevada Revised Statutes govern most of the LVCVA’s activities, including financial structure, purchasing procedures, budgeting, debt, and investments. Accounting and budgeting for a governmental organization is somewhat different from profit-making businesses in that governmental organizations use funds. A fund is a separate accounting entity with its own assets, liabilities, revenues and expenditures. The LVCVA has four major funds, the General Fund, Special Revenue Fund, Capital Funds and Debt Service Funds. The LVCVA budgets its governmental funds, which include the general fund, special revenue fund, capital projects funds, and the debt service funds, based on the modified accrual basis of accounting. Under this method, revenues (income) are recognized, and any related receivable is recorded, when they become both measurable and available to finance expenditures. Room tax, the primary source of LVCVA revenue, is recognized at the time it is received and held for disbursement by the collecting governmental entity. Interest and facilities rental revenues are recognized when earned. Expenditures (expenses) are recognized when the liability is incurred, except for unmatured principal and interest on long-term debt which is recognized when due. Definitions for each fund group are provided in the glossary. All LVCVA funds are presented in the comprehensive annual financial report (CAFR) on the basis of generally accepted accounting principles (GAAP) and conform to the manner that the LVCVA prepares its budget (i.e. modified accrual basis). Encumbrances are sometimes viewed as an extension of the formal budget integration even though those amounts were adopted in the previous year’s budget. They consist of purchase orders, contracts and other commitments for expenditures of monies that are recorded in the accounting system in order to reserve the portion of the applicable appropriation. At fiscal year end, outstanding encumbrances are reported as reservations of fund balance and are reappropiated in the next fiscal year, since they are not considered expenditures or liabilities. STRUCTURE OF THE BUDGET DOCUMENT The goal of this budget document is to provide not only comprehensive information about estimated revenues and expenditures but also the policies, goals, financial structure, operations, and an organizational framework that show how the LVCVA will work towards its mission for fiscal year 2010. A main objective is to communicate to the readers (i.e. the Board of Directors, management, other organizational units and the public) in a manner that is clear, concise and understandable. The LVCVA budget is comprised of eight main sections: Budget Message, Budget Structure and Policy, General Fund, Special Revenue Fund, Capital Fund, Debt Service Fund, Personnel Allocation, and Statistical Data. BUDGET MESSAGE and BUDGET STRUCTURE and POLICY These sections provide a general overview of the LVCVA. It includes the president’s budget message, this reader’s guide, and condensed summaries of the budget. The budget structure and policy section contains a brief historical view of the LVCVA, along with its financial structure, various policies, budget procedures and fund balance analysis. GENERAL FUND The operating budget (i.e. general fund), beginning on page 20 presents budgetary information for revenues, followed by the functions of general government, marketing, operations, special events and grants. The emphasis is on the nature of the tasks to be undertaken by the organization. This section identifies the purpose of each organizational unit, its responsibilities, and goals for the ensuing fiscal year, selected activity measures, and prior year achievements. Appropriations are summarized in major categories of salaries, employee benefits, and services and supplies. Also included is the number of fulltime employees and capital outlay related to the division. 8 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT STRUCTURE OF THE BUDGET DOCUMENT (continued) GENERAL FUND (continued) For financial reporting and budgeting purposes, the LVCVA has classified its expenditures by functions, activities, and organizational units. The function classification arranges related activities, providing information on the overall purposes or objectives of expenditures. Activities are similar endeavors or groupings of organizational units performing a specific and distinguishable type of work. FUNCTIONS General Government ACTIVITIES Board of Directors Executive Human Resources Public Affairs Finance Marketing & Advertising Sales and Services ORGANIZATIONAL UNITS Board of Directors Executive, Internal Audit, Legal, Board Office, Human Resources Media Relations, News Bureau Finance, Purchasing, Materials Management Advertising, Internet Marketing & Research, Sports Marketing Convention Center Sales, Convention Sales Diversity Marketing, Destination Services Convention Services, International Sales Leisure Sales Customer Experience, Client Services, Engineering, Facility Projects Customer Experience Project Development Security, Physical Security, Traffic Information Technology Marketing Operations Facilities Customer Experience Project Development Security Information Technology The organizational chart shown on page 2 is closely related to each unit’s financial classification. In general, divisions relate to functions, departments relate to activities, and sections relate to organizational units. Special events and grants are unrelated to the organizational structure. Functions are the basic unit of the operating budget. Within each function, activities and organizational units are discussed in a narrative format. Also included within this discussion is a more detailed organization chart. SPECIAL REVENUE FUND The special revenue fund on page 72 was used to segregate the financial resources and expenditures related to the Vegas Uncork’d event. In FY 2009, the Las Vegas Convention and Visitors Authority acquired the lead production responsibility and ownership of this culinary event. CAPITAL FUND The capital fund budget, starting on page 73 includes a capital project and purchases listing and the fiveyear capital plan, which is reviewed and updated annually. This section explains the capital projects review and selection process, and includes a description of major projects and estimated impacts on the operating budget. There are five separate capital project funds being presented: Capital Improvement and Replacement Fund, Extraordinary Repair, Maintenance, and Improvement Fund, the Master Plan Enhancement Program Fund, the Land Acquisition Fund, and the Nevada Department of Transportation (NDOT) Project Fund. DEBT SERVICE FUND The debt service fund budget on page 89 provides not only a historical perspective concerning the LVCVA’s past bond issues, but also a review of current and proposed bond obligations, the bond issuance process and debt limit and capacity. 9 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT STRUCTURE OF THE BUDGET DOCUMENT (continued) PERSONNEL ALLOCATION Information on personnel requests, including justifications, authorized positions by organizational unit, and wage schedules is located in the personnel allocation section, beginning on page 98. STATISTICAL DATA Statistical data starts on page 107. It contains information on demographics for Clark County, visitor analyses, principal room taxpayers, and a room tax schedule, along with ten-year schedules of facility usage for the Convention Center and Cashman Center and general fund revenues and expenditures. NEW POLICIES/SIGNIFICANT EVENTS The Board of Directors acted upon the following items during fiscal year 2009 (month of adoption is shown in parenthesis): Authorized the sale of general obligation bonds in the amount of $30 million for road projects along Interstate 15. As authorized by Nevada Revised Statute 244A.637, the LVCVA issued bonds to provide funding for the Nevada Department of Transportation (NDOT). (July 2008) Entered into a Memorandum of Understanding regarding the City of Las Vegas’ efforts to redevelop the neighbor around and including Cashman Center. This memorandum provides that the LVCVA will cooperate and help the City of Las Vegas find alternative uses for the property. (August 2008) Following Nevada Revised Statue 354.612, the Board, by resolution, established a special revenue fund for special event marketing programs. (November 2008) Suspended portions of the Master Plan Enhancement Program. Components of the program which have not been started are being deferred allowing the LVCVA not to take on additional debt during a period of declining revenues. (March 2009) Due to the national and global economic downturn, room tax revenues decreased significantly. The FY 2009 room tax revenue projections decreased from $224 million to $178 million. These budget reductions were brought before the board three times. (February, April & May 2009) FINANCIAL MANAGEMENT POLICIES During each stage of the budget preparation process, consideration is given to the policies and goals established by the Board and Executive Management that directly relate to the budget and financial planning. The financial policies are divided into the following categories: Operating Management, Capital Management, Debt Management, Reserve/Fund Balance, and Financial Reporting. OPERATING MANAGEMENT Projections used to balance revenues to expenditures will be prepared for a five-year period and updated annually. Conservative but realistic revenue projections will be prepared to assess the limits of budget appropriations. If projections are too high, under-realized revenues could cause budget cuts mid-fiscal year. 10 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT FINANCIAL MANAGEMENT POLICIES (continued) Operating expenditures will be funded with current revenues. For FY 10, current budgeted revenues of $228.9 million fund operating expenditures of $195.4 million. The LVCVA is required by law to submit a balanced budget each year to the State of Nevada for approval. This is defined as a budget in which proposed revenues and other financing sources are equal to or exceed proposed expenditures. Investments of cash funds will be maintained in accordance with the Board-approved investment policy and state statute. The primary objectives of this policy are to minimize risk, ensure that cash is available when it is needed, and ensure a competitive rate of return while complying with the laws of the State of Nevada – in that order. Interest earnings on investments in the capital and debt service funds will be transferred into the general fund, except for earnings on the proceeds from construction financing (i.e. bonds, commercial paper). The Board authorizes adjustments to the full-time position roster, currently at 572 positions. All requests for new positions must contain a justification and evaluate total costs including benefits and capital outlay. Temporary employees are used only to augment regular staffing on a temporary or intermittent basis. Staffing is discussed in the personnel allocation section, page 98. There are no new position requests for FY 2010. The current collective bargaining agreement with Service Employees International Union Local 1107, along with additional LVCVA personnel policies, direct such items as annual pay increases, personal time off (PTO) accruals, and pension plan contributions. All are taken into account in the preparation of the budget. This agreement expired June 30, 2008 and at the time of budget preparation negotiations are still taking place. CAPITAL MANAGEMENT A five-year capital improvement plan will be updated annually. It is presented to the Board of Directors with the annual budget and is adopted at the same time. The capital improvement plan must include a list of proposed capital improvements or purchases with cost estimates, methods of financing (i.e. room taxes, use of facilities revenue or debt issue), and any estimated income or cost associated with the constructed facilities. Only projects or purchases costing over $20,000 in one fiscal year or included in a multi-year equipment replacement program appear in the plan. A listing of the five-year capital plan projects is included in this budget book. The detailed five-year capital plan is a separate document published along with the annual budget. A balance of pay-as-you-go capital improvements versus financing will be evaluated taking into account the various economic factors. Nevada Administrative Code 354.750 requires that local governments perform a physical inventory, every two years. Each item subject to the inventory must be assigned an identifying number and be labeled as belonging to the LVCVA. This same code sets the guidelines for the establishment of capitalization thresholds by resolution. 11 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT FINANCIAL MANAGEMENT POLICIES (continued) DEBT MANAGEMENT The LVCVA will actively seek to maintain, and if possible, improve our current bond ratings in order to minimize borrowing costs resulting in lower interest rates. Debt issuance is governed by Nevada state law. The LVCVA’s Board of Directors is empowered to issue general obligation bonds; however, state statute requires that these bonds be issued in the name of the County. Although state statute allows the LVCVA to use property taxes for debt service, only net pledged revenues derived from room taxes and use of facilities revenue have ever been used. No ad valorem property tax revenues are allocated to the LVCVA for any purpose and this practice will continue. The LVCVA is required to file an indebtedness report, which includes a capital improvement plan, with the Debt Management Commission prior to August 1, regardless if new debt is being contemplated or not. The specifics of the reports can be found on page 89. RESERVE/FUND BALANCE A minimum unreserved fund balance of between 4.0% and 8.3% of budgeted general fund operating expenditures will be maintained. Our proposed FY 2010 unreserved fund balance is 7.2%. Reserves will be sufficient to pay principal and interest on the outstanding bond issues due on July 1. A contingency reserve of $100,000 will be funded for the discretionary use of the Board of Directors. However, use of these funds should be utilized only after the availability of all other budget sources are examined. The LVCVA is required by an inter-local agreement with Clark County to provide funding for a 13th month premium to the Clark County Self-Funded insurance program, in case of more claims being paid-out versus premiums collected. FINANCIAL REPORTING The LVCVA’s accounting and financial reporting systems will be maintained in conformance with generally accepted accounting principles (GAAP) and standards of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). An annual audit will be performed by an independent public accounting firm, with an audit opinion to be included in the LVCVA’s published Comprehensive Annual Financial Report (CAFR). Financial systems will be maintained to monitor revenues, expenditures and program performance (i.e. special events and grants) on an on-going basis. 12 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT MARKETING POLICIES Filling the available hotel and motel rooms becomes more challenging each year. Nationally, the spread of gaming across the nation has lessened Las Vegas’ monopoly on the industry. We used to be the “only game in town”; now we have to be the “best game in town.” The past 15 years has seen tremendous expansion and growth of resort properties in the Las Vegas metropolitan area. This has driven the number of hotel rooms from 76,000 in 1993 to the current estimated 152,000. Some of the marketing policies that have been tailored to meet these challenges include: Stay abreast of current market conditions and travel trends in order to tailor marketing strategy to achieve maximum impact. Use national advertising to stimulate interest in Las Vegas for tourism and as a convention destination. Target market segments, such as international and diversity, to attract visitors with varied demographic profiles. Conduct market research to measure the local economic impact of tourism, monitor tourist characteristics and test new messages for key target audiences. Identify and promote special events that will attract previously untapped market segments. FACILITY POLICIES The Las Vegas Convention Center is one of the largest meeting facilities in the nation, with more than 3.2 million square feet. In FY 08, the Center hosted 83 conventions, public events, and meetings. Over 6.2 million delegates attended trade shows and conventions in Clark County. The goal to “have a show in the building, another one moving in and one moving out” is closer to being realized than ever. Reasonable rates and the finest facilities in the country are the secret of our success. Policies that guide us toward this goal include: Maintain a competitive edge in the facility rate structure. Even with the newly adopted rate changes going into effect in FY 2010 and FY 2013, the Las Vegas Convention Center moves only from 17th to 13th in a comparison of national convention center rental rates. This ranking presumes that no other convention centers raise their rates in the interim. Create an outstanding experience for every visitor via the appearance and the amenities found in the facilities and provide excellent customer service. Prevent deterioration of maintenance programs. buildings and equipment through scheduled preventive Pursue aggressive energy and water conservation programs; thereby reducing operating costs. COMMUNITY POLICIES Since the first general obligation bonds were issued in 1957, the LVCVA has maintained a history of supporting the community through grants. The Board has established several grant programs including the following: Apportion annual recreation grants to Clark County and the incorporated cities within (Las Vegas, North Las Vegas, Henderson, Boulder City and Mesquite) for capital improvements to recreational facilities (i.e. parks, pools, community centers). 13 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT COMMUNITY POLICIES (continued) Award grants to local non-profit chamber of commerce, Clark County and its incorporated cities, for the development, promotion and increase of tourism within Clark County. Return a collection fee (up to 10% of total room tax and gaming fees received by the LVCVA) to the collecting entities (i.e. Clark County and its incorporated cities). The amount of fees paid to the collecting entities that exceed the reasonable costs incurred in collecting the room taxes and gaming fees must be used for the operations and maintenance of recreation programs or facilities. BUDGET PROCESS An annual budget is developed to meet the needs and the goals of the organization based on the Board’s priorities and long-range plans and to comply with Nevada Revised Statutes. It should also serve as a management and control tool by measuring actual performance against budget standards, focus attention on future operations and plans, and improve communication of goals, objectives and plans. Below are the summarized highlights in preparing the annual budget. The budgetary controls and budget calendar follow, indicating the deadlines to meet the legal mandates of the State of Nevada. 1. Revenue Estimates and Projection Updates - The process begins with the Finance Department updating the five year forecast and preparing preliminary revenue projections taking into consideration national, state and local economic indicators and analyses of the LVCVA’s major revenue sources. Executive management meets to review the information, update strategic plans and determine preliminary budget guidelines. 2. Budget Training Sessions - Budget preparation manuals are distributed by Finance to all departmental budget preparers at budget training sessions. The manual contains instructions for accessing and using the computerized budget system (OLB), preparing narratives, goals and activity measures, requesting new personnel and justifying capital requests. 3. Zero Based Budgeting – The LVCVA uses a zero based budget process. Departments build their budgets from the ground up, justifying groups of related expenditures. Consideration is given to any additional budget guidance as given by executive management. 4. Goals, Objectives and Performance Measurements - Departments are required to develop goals, objectives and activity measures to show what services are going to be provided. The goals must complement the organization and divisions’ mission statements and goals. 5. Tentative Budget Adoption - The tentative budget document is presented to the Board of Directors at a public hearing. It is then filed with the Nevada Department of Taxation and the County Clerk as required by Nevada Revised Statues, usually on or before April 15th. 6. Budget Book Development - Since the financial and narrative information is completed by this point, the Finance Department prepares the budget book which is compromised of the operating, capital and debt service budgets. 7. Public Hearing and Final Budget Adoption – After April 15 and before the third Thursday in May, the public has the opportunity to review the tentative budget document and submit any comments for inclusion on the agenda of the public hearing. The hearing provides the public an opportunity to comment on the proposed budget to the Board of Directors. 14 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT BUDGETARY CONTROLS Some of the significant controls pertaining to the budget are as follows: The budget process for the operating (general fund) and capital funds is decentralized; all departments participate in the process and input budget amounts and justifications into the computerized on-line budget system. Annual budgets for the upcoming fiscal year (July 1 through June 30) are adopted for all funds. These final budgets are integrated on July 1 with the LVCVA’s accounting system. Each fund in the budget must be in balance; total revenues including other financing sources plus beginning fund balance must equal total expenditures including other financing uses plus proposed ending fund balance. The statutory level of budgetary control is at the function level; however, in reality, control is maintained at the line item level through the use of a purchase order and encumbrance system. An encumbrance is recorded in the accounting system when a purchase order is issued. At fiscal year end, outstanding encumbrances are reported as reservations of fund balance and are reappropiated in the next fiscal year via the budget augmentation process, since they are not considered expenditures or liabilities. The LVCVA is currently using a “zero-based” budget method. Each department must build their budget from the ground up justifying each group of related expenditures. Departments can request additional funding for new positions, equipment or operating expenses to expand existing or for new programs or initiatives. Budgetary performance is measured by line item budget variance reports. Departments have the ability to run the report themselves at anytime. Budget variance reports are linked to the accounting system and when run provide real time data. Budget variance reports are distributed to the Board on a monthly basis. A capital expenditure versus budget report by project number is issued monthly as well. BUDGET TRANSFERS There are three types of transfers of budget appropriations that are permitted by state law. 1) Transfers within the same function (i.e. General Government, Marketing, Operations, Special Events and Grants) and same fund (i.e. general fund, capital fund). Only the President needs to approve them. 2) Transfers between different functions but within the same fund. The President can approve and the Board is advised of the action at the next regular meeting where it is recorded in the official minutes. 3) Transfers between different funds require prior approval of the Board. The Department of Taxation is notified of these transfers by means of filing the tentative budget, which contains current year budget revisions. BUDGET AUGMENTATION Adjustments to the budget are accomplished through an augmentation process. It requires adoption by a majority vote of the Board of Directors at a regular meeting to increase appropriations above levels originally approved and the filing of designated forms with the Nevada Department of Taxation. This formal resolution procedure adheres to the process prescribed by Nevada Revised Statutes. 15 READER`S GUIDE TO THE LVCVA BUDGET DOCUMENT BUDGET CALENDAR Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct 11/1- Finance prepares preliminary revenue estimates and debt service requirements. President 11/30 approves budgetary guidelines to disseminate to budget teams. Pro-forma statements prepared. Budget training and information and goal setting sessions held. Open OLB 12/15(OnLine Budget), the computerized budget system to budget preparers. Budget 1/31 teams prepare tentative budget requests and meet with senior vice presidents to review. Finance prepares salary and benefits budget. 2/42/20 Senior vice presidents review final budget submissions. All budget submissions must be completed. 2/23- Tentative budget document is prepared for executive review 3/13 process. President, senior vice presidents and others review budget requests. 3/16- Final draft of proposed budget prepared by Finance. 3/20 3/23 Final draft of proposed budget distributed to executive management. All goals, activity measures, prior year achievements and any changes to text in budget document due to Finance. Last day to make changes to tentative budget. Tentative FY 2010 budget submitted to Department of Taxation for compliance review. Budget to Print Shop for printing and binding. 3/30 4/15 4/275/1 5/11 5/12 Public notice published. Tentative budget and budget augmentation presented to the Board of Directors at a public hearing. 5/21 Public hearing and adoption of the final FY 2010 budget. 6/1 Final FY 2010 budget submitted to Department of Taxation. 7/18/20 Submission of FY 2010 budget to GFOA for budget award. Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul 16 SUMMARY OF ALL FUNDS FY 2010 BUDGET ALL FUNDS SPECIAL GENERAL FUND REVENUES: Room Taxes and Gaming Fees Use of Facilities Interest Miscellaneous Total Revenues EXPENDITURES: General Government Marketing Advertising Operations Community Support Special Events Other Capital Outlay Debt Service: Principal Interest Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In Operating Transfers Out Proceeds from Sale of Debt Proceeds from Sale of Fixed Assets Total Other Financing Source (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES RESERVE FOR CONTINGENCY FUND BALANCE, BEGINNING FUND BALANCE, ENDING (1,106,829) 675,000 15,786,141 14,004,312 101,500 3,000 104,500 1,141,200 54,285,524 55,426,724 1,615,057 44,780,799 46,395,856 1,750,928 675,000 114,855,465 115,931,393 1,160,125 (35,787,965) 7,000 (34,620,840) 800,000 800,000 (750,000) 274,000,000 273,250,000 34,987,965 (410,125) 34,577,840 36,948,090 (36,948,090) 274,000,000 7,000 274,007,000 33,514,011 (698,500) (272,108,800) (32,962,783) (272,256,072) 195,411,789 2,098,500 274,134,800 13,580,000 19,792,908 33,372,908 13,580,000 19,792,908 505,017,997 11,737,400 30,991,300 86,525,300 39,475,400 18,945,000 7,707,389 30,000 2,098,500 274,134,800 11,737,400 30,991,300 86,525,300 39,475,400 18,945,000 7,707,389 2,128,500 274,134,800 178,950,000 48,983,800 985,000 7,000 228,925,800 1,400,000 1,400,000 2,025,000 1,000 2,026,000 410,125 410,125 178,950,000 48,983,800 3,420,125 1,408,000 232,761,925 REVENUE FUND CAPITAL PROJECTS FUNDS DEBT SERVICE FUNDS TOTAL ALL FUNDS 17 SUMMARY OF ALL FUNDS COMPARISON TO PRIOR YEARS TOTAL - ALL FUNDS REVISED ACTUAL FY 06 REVENUES: Room Taxes and Gaming Fees Use of Facilities Interest Miscellaneous Total Revenues EXPENDITURES: General Government Marketing Advertising Operations Community Support Special Events Other Capital Outlay Debt Service: Principal Interest Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Operating Transfers In Operating Transfers Out Refunding Escrow Proceeds of Sale of Debt Debt Premium Debt Issuance Costs Proceeds from Sale of Fixed Assets Total Other Financing Source (Uses) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING USES RESERVE FOR CONTINGENCY FUND BALANCE, BEGINNING FUND BALANCE, ENDING (10,124,959) 108,609,551 98,484,592 41,394,491 98,484,592 139,879,083 51,296,847 139,879,083 191,175,930 (76,220,465) 100,000 191,175,930 114,855,465 1,750,928 675,000 114,855,465 115,931,393 79,275,085 (79,275,085) (2,242) 29,843 27,601 62,393,370 (62,393,370) (40,796,517) 69,200,000 2,051,229 (323,813) 70,374 30,201,273 115,000,000 911,342 (1,053,215) 14,129 114,872,256 67,760,884 (67,760,884) 60,997,484 (60,997,484) 281,455,000 15,000 281,470,000 36,948,090 (36,948,090) 274,000,000 7,000 274,007,000 (10,152,560) 11,193,217 (63,575,409) (357,690,465) (272,256,072) 11,725,000 11,498,269 264,421,852 11,050,000 13,341,084 260,860,198 11,605,000 12,384,130 351,452,654 13,340,000 21,795,136 590,890,865 13,580,000 19,792,908 505,017,997 7,429,631 31,990,838 82,923,473 36,890,096 24,431,488 9,816,705 3,774 47,712,578 7,799,028 33,079,359 84,713,300 41,269,630 24,872,455 13,543,716 746 31,190,881 9,192,348 33,908,754 88,074,185 43,940,270 26,673,198 11,967,338 245,660 113,461,771 13,416,206 31,987,648 89,821,417 39,386,797 6,790,326 20,340,000 2,027,000 351,986,335 11,737,400 30,991,300 86,525,300 39,475,400 18,945,000 7,707,389 2,128,500 274,134,800 202,050,435 48,359,639 3,800,709 58,509 254,269,292 215,205,408 50,916,320 5,776,566 155,122 272,053,416 222,584,976 57,689,079 6,599,151 1,004,038 287,877,245 179,950,000 46,640,400 5,414,000 1,196,000 233,200,400 178,950,000 48,983,800 3,420,125 1,408,000 232,761,925 ACTUAL FY 07 ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY 10 18 SUMMARY OF ALL FUNDS FUND BALANCE ANALYSIS Nevada Revised Statutes 354.433 defines Fund Balance as the excess of assets over liabilities in a governmental fund. Put another way, fund balance represents the net difference between total financial resources and total appropriated uses. Fund balances provide a financial cushion against anticipated changes. While changes may occur from year to year, maintaining proper fund balances over the long term is an important component of sound financial management and a significant factor in bond ratings. Fund balances will vary by fund. Total FY 2010 ending fund balance for all funds is projected to be $115,931,393. This is comprised of: $14 million in the General Fund, $100,000 in the Special Revenue Fund, $55.4 million in the Capital Funds, and $46.4 million in the Debt Service Funds. General Fund – Beginning fund balance for FY10 is projected to be $15,786,141. Fund balance is the amount of unencumbered cash that ensures services could be provided for a short time if commitments exceeded revenues. Because all room tax received in July is accrued back to June 30, 2009, it is already part of ending fund balance. Most facility rental revenue received in July is earned in June and therefore it, too, is a part of ending fund balance. The first "new" money we receive is in the middle of August. Therefore, the LVCVA operates for four to six weeks off of beginning fund balance. This is used to cover expenditures (i.e. payroll, grants and supplies and services) for at least two to four weeks. Capital Fund – Fund balance in the capital fund is used as a supplement to capital projects if necessary. The Master Plan Enhancement Program was approved for a total of $737 million in February 2006, with an additional $153 million approved in May 2007. The board passed a resolution allowing for the sale of revenue bonds, commercial paper or other short-term floating rate securities or any combination thereof in the maximum amount of $822 million with the remainder ($68 million) of the funding from capital reserves. Capital reserves, unless spent, roll each fiscal year through fund balance, which accounts for fluctuations. Due to current economic conditions, components of the Master Plan Enhancement Program have been suspended through the first quarter of calendar year 2010. At that time, the economy will be reassessed along with the LVCVA’s capacity to resume the renovation project. Debt Service – Fund balance in the debt service funds is used as a cushion for timely debt payments. Since components of the Master Plan Enhancement Program that had not been started were suspended, it deferred the need for the LVCVA to take on additional debt. The obligations of the debt service funds are met by transferring funds adequate to make the principal and interest payments on the various issues. 19 GENERAL FUND SUMMARY The general fund is the general operating fund of the LVCVA, accounting for most financial resources not specifically accounted for in another fund. General fund revenues include room taxes and gaming fees, use of facilities, other fees and charges, and interest earnings. The LVCVA has classified its expenditures by functions, activities, and organization units (see table on page 9). General fund expenditures are those that are made in the normal operations of the LVCVA. REVISED ACTUAL FY 06 REVENUES: Room Taxes and Gaming Fees Use of Facilities Other Fees and Charges Interest and Other Total Revenues EXPENDITURES: General Government Marketing Advertising Operations Special Events Community Support Other Total Expenditures Excess of Revenues over Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In: Capital Projects Funds Debt Service Funds Operating Transfers Out: Special Revenue Funds Capital Projects Funds Debt Service Funds Proceeds from Sale of Fixed Assets Total Other Financing Sources (Uses) Reserve for Contingency FUND BALANCE, BEGINNING FUND BALANCE, ENDING Total Capital Outlay Total Full-Time Personnel (77,124,210) 47,028,001 29,590,307 47,712,578 513 (56,290,139) 29,590,307 37,140,544 31,190,881 537 (59,330,113) 37,140,544 45,727,619 113,461,771 574 (56,604,484) 100,000 45,727,619 15,786,141 351,986,335 572 (34,620,840) 675,000 15,786,141 14,004,312 274,134,800 572 (38.8%) 575.0% (65.5%) (11.3%) (22.1%) 0.0% 29,843 70,374 14,129 15,000 7,000 (53.3%) (54,258,700) (23,955,869) (33,000,000) (25,829,289) (27,374,200) (36,178,363) (800,000) (8,405,305) (49,603,179) (800,000) (34,987,965) 0.0% (100.0%) (29.5%) 548,112 512,404 1,803,873 664,903 3,383,350 824,971 1,500,000 689,000 750,000 410,125 (50.0%) (40.5%) 59,686,516 63,840,376 67,917,188 26,763,006 33,514,011 25.2% 7,429,631 31,990,838 82,923,473 36,890,096 9,816,705 24,431,488 3,774 193,486,005 7,799,028 33,079,359 84,713,300 41,269,630 13,543,716 24,872,455 746 205,278,234 9,192,348 33,908,754 88,074,185 43,940,270 11,967,338 26,673,198 245,660 214,001,753 13,416,206 31,987,648 89,821,417 39,386,797 6,790,326 20,340,000 40,000 201,782,394 11,737,400 30,991,300 86,525,300 39,475,400 7,707,389 18,945,000 30,000 195,411,789 (12.5%) (3.1%) (3.7%) 0.2% 13.5% (6.9%) (25.0%) (3.2%) 202,050,435 44,698,675 3,660,964 2,762,447 253,172,521 215,205,408 45,504,500 5,411,821 2,996,881 269,118,610 222,584,976 53,094,858 4,594,221 1,644,887 281,918,942 179,950,000 43,514,700 3,125,700 1,955,000 228,545,400 178,950,000 46,566,000 2,417,800 992,000 228,925,800 (0.6%) 7.0% (22.6%) (49.3%) 0.2% ACTUAL FY 07 ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY 10 % CHANGE 20 GENERAL FUND SUMMARY REVENUES Revenues for FY 2010 total $228.9 million, an increase of $400,000 over FY 2009. This slight increase is due to an increase in the cost of rental space per net square foot at the Las Vegas Convention Center. Room taxes, the major source of revenue, are expected to decrease less than 1% due to the slowing economy. Gaming fees are expected to remain flat at $1,950,000. Use of facilities revenue represents approximately 20.3% of total revenues. Building usage, which is based on actual leases confirmed and signed, as well as parking lot rental, is projected to increase 7%, primarily due to an increase in the cost of rental space. Other fees and charges is expected to decrease 22.6% primarily from the loss of funding through the Nevada Commission on Tourism which supplemented the international sales effort. In addition, there is a lower rental rate in effect for our business services partner. FY 2010 GENERAL FUND REVENUES Other* 3% Use of Facilities LVCC 19% Room Taxes 78% *Other includes Gaming Fees, Interest/Other and Other Fees and Charges as alone these represent less than 1% of the revenue budget EXPENDITURES General fund expenditures are divided into three main categories: salaries and wages, employee benefits, and services and supplies. Salaries and wages represent 17.1% of total general fund expenditures. Included in this amount, however, are temporary salaries and overtime of $2,303,000. Employee benefits are 35% of regular salaries budget of $33,605,300. On a division level, salaries and wages make up 46.7% of the General Government budget and 47.1% of the Operations budget. In the Marketing Division, salaries and wages account for only 8.1%, whereas, sales, advertising, and promotion represent 89.2% of their budget. Total expenditures are $195,411,789, which is 3.2% less than the revised FY 2009 budget. The General Government and Marketing Divisions, as well as the Advertising section costs have been lowered in response to the projected decrease in revenue levels. Operations Division expenditures are anticipated to stay flat. The decrease of $1.3 million in special events is due to lower collection allocation, which is a direct result of decreased room tax revenue projections, as well as funding for the various grant programs being suspended. 21 GENERAL FUND SUMMARY FY 2010 GENERAL FUND EXPENDITURES Marketing 16% Advertising 44% General Government 6% Community Support & Other 10% Special Events 4% Operations 20% OTHER FINANCING SOURCES (USES) These are usually comprised of operating transfers in (i.e. interest earned in other funds) and transfers out (i.e. funding for other funds), along with sale of fixed assets. An operating transfer is a legally authorized transfer from a fund receiving revenue to the fund through which the resources are to be expended. FUND BALANCE It is the current policy of the LVCVA to maintain an ending fund balance between 4.0% and 8.3% of budgeted expenditures. The projected ending fund balance of $14,004,312, which is 7.2%, meets this requirement. CAPITAL OUTLAY Capital outlay includes all projects accounted for in the capital projects and replacement fund (see pages 7388) for additional details). The total amount shown includes capital expenditures for furnishings, equipment, improvements or additions to land and buildings financed by general fund revenues. In each division’s budget analysis, the amount includes only furnishings and equipment. Two exceptions are: (1) all computer-related items are accounted for in the Information Technology Department’s (Operations Division) capital budget; and (2) all building, land and leasehold improvements are coordinated by the Engineering departments (Operations Division). For FY 2010 there is no transfer to the Capital Fund. Because there is a limited number of proposed capital projects and purchases, the fund balance will be used. None of these projects are expected to have an impact on the general fund operations. TOTAL FULL-TIME PERSONNEL No new full positions were requested this fiscal year. This results in the total number of authorized positions to remain at 572. For additional information concerning personnel allocation, see pages 98-106. 22 GENERAL FUND SUMMARY FY 2010 EXPENDITURES BY DIVISION Salaries & Wages 47% Employee Benefits 16% GENERAL GOVERNMENT Services & Supplies 37% Salaries & Wages 47% Employee Benefits 17% OPERATIONS Services & Supplies 36% Advertising 73% Salaries & Wages 8% Employee Benefits 3% Services & Supplies 16% MARKETING 23 REVENUE GENERAL FUND SOURCES OF PROPOSED REVENUES Room Taxes 78% Use of Facilities LVCC 19% Other* 2% Other Fees and Charges 1% *Other includes gaming fees, interest and use of facilities – Cashman Center. MAJOR REVENUE SOURCES 1999 - 2008 ACTUAL 2009 - 2010 PROJECTED Millions 240 220 200 180 160 140 120 100 80 60 40 20 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Charges for Services Room Taxes Charges for Services include use of facilities revenue for both facilities and other fees and charges. 24 REVENUE REVENUE SUMMARY Total general fund revenues for FY 2010 are $228.9 million, which is flat compared to FY09 revised budget. However, this is a 17.4% decrease from original FY09 budget. Revenue components are room taxes and gaming fees, use of facilities, other fees and charges, and interest and other. REVENUES AND OTHER FINANCING SOURCES Room Taxes & Gaming Fees Use of Facilities Other Fees and Charges Interest and Other Total Revenues Other Financing Sources REVISED BUDGET FY 09 179,950,000 43,514,700 3,125,700 1,955,000 228,545,400 2,204,000 230,749,400 PROPOSED BUDGET % FY 10 CHANGE 178,950,000 (0.6%) 46,566,000 7.0% 2,417,800 (22.6%) 992,000 (49.3%) 228,925,800 0.2% 1,167,125 (47.0%) 230,092,925 (0.3%) ACTUAL FY 06 202,050,435 44,698,675 3,660,964 2,762,447 253,172,521 1,090,359 254,262,880 ACTUAL FY 07 215,205,408 45,504,500 5,411,820 2,996,881 269,118,609 2,539,150 271,657,759 ACTUAL FY 08 222,584,976 53,094,858 4,594,221 1,644,887 281,918,942 4,222,450 286,141,392 Primary Revenue Trends Millions 250 200 150 100 50 Actual FY 06 Actual FY 07 Use of Facilities Actual FY 08 Revised Budget Proposed FY 09 Budget FY 10 Room Taxes & Gaming Fees Room tax revenue is projected to decrease slightly, less than 1% in anticipation of decreased room rate and occupancy rates. Based on the varied opening dates of the new properties throughout fiscal year 2010, revenue is projected based on a weighted net gain of approximately 4,000 rooms with the anticipated completion of Fountainebleau and portions of the City Center project. Room occupancy rate is projected to decline to 80%. Despite the sharp fall in occupancy, the greater Las Vegas area consistently exceeds that in other major resort destinations. The most volatile factor in calculating room taxes is average daily rate (ADR). The taxable ADR is budgeted to decrease 14.1% during FY 2009 and dropping an additional 2.2% in FY 2010 to $81.13. Use of facilities revenue projections are based on actual leases confirmed and signed. The rental income related to the Las Vegas Convention Center is expected to increase 7%, due to an increase in rental rates at the facility. An excerpt of rental rates per facility is included in the statistical data section, page 113. Under other fees and charges, the 22% decrease is due a loss of funding for the International Sales efforts from the Nevada Commission on Tourism as well as a lower rental rate for our business services partner. A ten-year historical revenue schedule is located in the statistical data section (pages 107-108). 25 REVENUE ROOM TAXES The LVCVA’s primary source of revenues, approximately 78%, is from a tax levied on hotels, motels, and other lodging establishments throughout Clark County and the incorporated cities therein. The incorporated cities are Las Vegas, North Las Vegas, Henderson, Boulder City, and Mesquite. The rate of tax levied varies from 12% to 13% for resort hotels and 10% to 12% for non-resort hotels depending on the establishment’s jurisdiction (see page 120 for room tax rate breakdown by jurisdiction). The rate of taxes can only be increased by action of the Nevada State Legislature, this occurred during the 2009 legislative session. The room tax rate for counties whose population is over 300,000 was increased by 3% (not to exceed a total of 13%). In general, the tax for resort hotel room rentals will be distributed as follows, beginning July 1, 2009: 4% - 5% 1 5/8% 0% - 2% 1% 3/8% 2% - 3% LVCVA - General Fund Clark County School District - Capital Projects City/County (collecting entities jurisdiction) - General Fund Clark County - County transportation tax State of Nevada - Promotion of tourism State of Nevada – Education and other state programs The LVCVA’s portion of room tax is generally 1% less on non-resort room rentals. The total tax on rooms averages approximately 12%. It is projected that the total tax on rooms collected county-wide will be approximately $442,500,000. The LVCVA retains only 35% of the total room tax collected in Clark County ($177,000,000 less $20,400,000) which is returned to the entities in the form of grants and collection allocation). Currently, 10% of the total room and gaming taxes collected for the LVCVA are returned to the county and the cities. The division of this collection allocation is set forth in an agreement between the various entities and may be designated by the individual entities for any purpose. The distribution to the county and its incorporated cities is based upon the governor-certified population figures as prepared by the state demographer. Collection allocation is discussed further on page 71. Projected County-Wide Room Tax The remaining 65% is split as follows: $43,500,000 to collecting jurisdictions $37,000,000 to Clark County for transportation projects Other Entities 65% LVCVA 35% $13,875,000 to the State of Nevada for the promotion of tourism $60,125,000 to the Clark County School District for capital project construction $18,700,000 to other entities from LVCVA grants and collection allocation $8,700,000 for Nevada Department of Transportation funding $111,000,000 to the State of Nevada for education and other state programs 26 REVENUE ROOM TAXES (continued) The table below presents a breakdown of the unrestricted room taxes received from the County and the incorporated cities. Projected room taxes decrease by <1% from revised FY 2009 budget and more than 21% compared to original FY 2009 budget. ROOM TAX BY JURISDICTION ACTUAL FY 06 181,759,541 11,754,615 653,373 4,704,029 164,099 1,051,170 200,086,827 ACTUAL FY 07 194,442,571 11,913,846 707,710 5,024,084 161,231 1,006,634 213,256,076 6.6% ACTUAL 2005 146,605 2.7% 89.2% ACTUAL 2006 145,948 (0.4%) 89.7% ACTUAL FY 08 201,377,390 12,486,791 691,809 5,084,425 114,099 978,614 220,733,128 3.5% ACTUAL 2007 146,372 0.3% 90.4% REVISED BUDGET FY 09 162,387,800 10,166,500 548,200 4,030,700 100,100 766,700 178,000,000 (19.4%) ACTUAL 2008 153,165 4.6% 86.0% PROPOSED BUDGET FY 10 161,479,200 10,012,800 554,700 4,077,100 91,500 784,700 177,000,000 (0.6%) PROJECTED 2009 157,165 2.6% 80.0% Clark County Las Vegas North Las Vegas Henderson Boulder City Mesquite % Change Calendar Year Hotel Rooms % Growth Occupancy Rate Source: Las Vegas Convention and Visitors Authority - Finance Department Note: Number of hotel rooms is for all of Clark County. Most visitors to Las Vegas are unaware that the fabled “Las Vegas Strip” is not within the boundaries of the incorporated city of Las Vegas. That fact accounts for the disparity in room taxes with 91% of the budgeted room taxes from Clark County. The average rate of growth in room tax revenue has been 10% over the past decade. Factors considered in projecting room taxes are: Number of available hotel rooms (see statistical data section page 118) There are approximately 152,000 hotel and motel rooms in the county from 316 properties; 70% of the properties are non-gaming in nature. Not included in the 152,000 rooms, is the 7,660 timeshare-unit inventory. In FY 2010, the destination will see a net gain of approximately 4,000 rooms with the anticipated completion of Fountainebleau and portions of the City Center project as well as renovations and closures of aging properties. Blended occupancy rates (see statistical data section page 119) It is a combined rate from the Las Vegas, Mesquite and Laughlin properties, which participate in our monthly survey. Blended average daily room rate is based upon rates from revenue generating rooms at Las Vegas, Mesquite and Laughlin hotel, motel and timeshare properties. National and international economic conditions and events. Monitor such domestic economic indicators as: consumer and business capital spending, unemployment and interest rates, the airline transportation market, crude oil prices. 27 REVENUE GAMING FEES Gaming fees are quarterly license fees imposed on operators of games based on the number of table games and slot machines in operation (see table below). These fees were originally established in 1957 and have remained unchanged. Boulder City does not allow gaming; therefore, no gaming fees. QUARTERLY FEE PER GAME OR SLOT MACHINE Casinos having 6 or more games Casinos having 2 to 5 games Casinos having fewer than 2 games Slot machines, more than 12 within one establishment Slot machines, fewer than 12 in one establishment Clark County, Cities of North Las Vegas, Henderson, and Mesquite $40.00 25.00 10.00 2.50 1.00 City of Las Vegas $12.00 7.50 3.00 0.75 0.25 Historically, gaming fees provide only 1.0% of the total revenue for the LVCVA. Gaming fees are difficult to predict because of the following factors: Constant layout reconfigurations by existing casinos. (Example: removal of gaming tables to place slot machines and vice-versa). Construction or closure of gaming establishments (includes not only hotel casino properties but also neighborhood bars, convenience stores, and other licensed gaming establishments). Gaming fees are anticipated to remain stable from FY2009 to FY2010. GAMING FEE BY JURISDICTION ACTUAL FY 06 1,516,002 111,388 133,690 166,362 36,166 1,963,608 ACTUAL FY 07 1,482,601 103,509 119,151 183,599 60,472 1,949,332 (0.7%) ACTUAL FY 08 1,389,473 111,533 133,688 171,096 46,057 1,851,848 (5.0%) REVISED PROPOSED BUDGET BUDGET FY 09 FY 10 1,483,000 1,463,100 104,000 117,400 119,000 140,800 184,000 180,200 60,000 48,500 1,950,000 1,950,000 5.3% 0.0% Clark County Las Vegas North Las Vegas Henderson Mesquite % Change 28 REVENUE USE OF FACILITIES The LVCVA owns and operates two facilities, the Las Vegas Convention Center and Cashman Center. These facilities are not intended to be self-supporting, but rather to generate visitors to the Las Vegas area. These visitors, in turn, generate room tax revenues while contributing to the overall economy. Facility operations are anticipated to generate 20.3% of total revenues. The average rate of growth has been 15% for the Convention Center and 5.6% for Cashman Center over the past decade. This is attributable to a heightened emphasis on selling the facilities, raising rental rates, and an increase in the available space at the Las Vegas Convention Center at various intervals. CONVENTION CENTER USE OF FACILITIES 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 18,190,420 18,981,696 22,968,460 28,068,973 30,076,198 32,469,177 40,305,355 42,583,037 43,197,430 50,848,050 42,036,000 44,233,700 * Projected CASHMAN CENTER USE OF FACILITIES 1,701,391 1,961,242 2,044,647 1,712,856 2,063,847 2,158,587 2,055,355 2,115,638 2,307,070 2,246,808 1,478,700 2,332,300 % INCREASE 22.9% 15.3% 4.3% (16.2%) 20.5% 4.6% (4.8%) 2.9% 9.0% (2.6%) (34.2%) 57.7% % INCREASE 37.5% 4.3% 21.0% 22.2% 7.2% 8.0% 24.1% 5.7% 1.4% 17.7% (17.3%) 5.2% Use of Facilities revenues are generated through a variety of rental charges (i.e. halls, meeting rooms, equipment, and parking lots, along with concessions and contractor services’ commissions). When the North Hall expansion came on-line, the first full rental year, FY 1999, experienced considerable growth. The revenue spikes in Use of Facilities in FY 1999, FY 2002, FY 2005 and FY 2008 are due to holding CONAGG/CON-Expo, the world’s largest construction show, in those years. At Cashman Center use of facilities revenue decreased in FY 2009 due to the specially negotiated rates to bring the United States Bowling Congress to Las Vegas. Use of Facilities revenues are projected to be $44,233,700 for the Las Vegas Convention Center and $2,332,300 for Cashman Center. These projections are based on the following: Below are rental rates for the Las Vegas Convention Center (for excerpt, see page 114). As new clients are obtained and older clients renew agreements, these lease agreements will come under the new rates. There are still a few multi-year agreements outstanding, which are being honored at the older rates. HISTORY OF RENTAL RATES – LAS VEGAS CONVENTION CENTER 5 cents per net square foot 15 cents per net square foot 20 cents per net square foot 25 cents per net square foot 29 cents per net square foot 34 cents per net square foot 1959-1988 1988-1998 1998-2001 2002 - June 2009 Starting July 1, 2009 Starting July 1, 2012 Analysis of actual bookings, signed lease agreements and prior experience, such as cyclical shows, that hold their meetings and tradeshows every number of predetermined years, or for three to five years consecutively. 29 REVENUE OTHER FEES AND CHARGES Other Fees and Charges are comprised of a variety of revenue sources. The majority is derived from the independent services that are not directly related to the rental of facilities, but rather services that can be supplied separately. Examples of such independent services are: conventions using LVCVA registration personnel or housing services. Also included are revenues from rental and commission agreements, reimbursements from participating properties in tradeshows, and special event revenue sharing arrangements. ACTUAL FY 06 3,660,964 ACTUAL FY 07 5,411,821 47.8% ACTUAL FY 08 4,594,221 (15.1%) REVISED PROPOSED BUDGET BUDGET FY 09 FY 10 3,125,700 2,417,800 (32.0%) (22.6%) Other Fees and Charges % Change Historically, Other Fees and Charges account for approximately 1% of total revenues. Revenue is anticipated to decrease due to a loss of funding for the International Sales efforts from the Nevada Commission on Tourism as well as a lower rental rate for our business services partner. INTEREST AND OTHER Interest and Other is comprised of interest earnings and discounts earned on investments and represents less than 1% of total revenues. Interest earnings are generated not only from cash balances invested in government guaranteed securities but are also earned on the room taxes which are collected and distributed by Clark County. All cash balances are invested daily. ACTUAL FY 06 2,757,487 ACTUAL FY 07 2,992,187 8.5% 4,695 (5.3%) ACTUAL FY 08 1,639,755 (45.2%) 5,132 9.3% REVISED PROPOSED BUDGET BUDGET FY 09 FY 10 1,950,000 985,000 18.9% (49.5%) 5,000 (2.6%) 7,000 40.0% Interest % Change Other % Change 4,960 It is difficult to project interest earnings because of their dependency on the size of the portfolio, fluctuations in interest rates, and availability of policy-approved securities. For the FY 2010 budget, total Interest and Other are estimated to be $985,000 and $7,000 respectively. OTHER FINANCING SOURCES Typically, Other Financing Sources accounts for operating transfers in from other funds (i.e. interest earnings from the capital replacement and improvement and debt service funds) and sale of fixed assets, but it can also include proceeds of sale of bonds. For FY 2010, interest earnings from other funds are estimated to be $1,160,125 and proceeds from the sale of fixed assets are anticipated to be $7,000. 30 GENERAL GOVERNMENT The general government function includes the Board of Directors along with the Executive, Human Resources, Public Affairs, and Finance departments. The Executive Department is responsible for the general administration of the LVCVA and is not only comprised of the offices of the President, Senior Vice Presidents, but also Internal Audit, Legal Counsel and Board-related activities. BOARD OF DIRECTORS 14 members LEGAL COUNSEL FTE 2 EXECUTIVE FTE 15 HUMAN RESOURCES FTE 10 PUBLIC AFFAIRS FTE 18 FINANCE FTE 42 31 GENERAL GOVERNMENT FY 2010 EXPENDITURES Executive 27% Finance 44% Board of Directors 3% Human Resources 11% Public Affairs 15% * Executive includes the offices of the President, Senior Vice Presidents, Legal, and Internal Audit. COMPARISON OF ACTUAL TO BUDGET FY 06 - FY 07 - FY 08 - FY 09 - FY 10 Millions 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Salaries Actual FY 06 Revised FY 09 Benefits Actual FY 07 Proposed FY 10 Services & Supplies Actual FY 08 **In FY 2009, the Finance department was moved from the Operations Division to General Government. 32 GENERAL GOVERNMENT BUDGET ANALYSIS No new positions have been requested in FY 2010. During FY 2009, the Finance and Purchasing departments were merged and transferred to the General Government division. No capital item requests (i.e. furniture and equipment) have been made this fiscal year. Any requests would have been accounted for in the capital improvement and replacement fund (see page 80). Computer-related items (i.e. computers, printers, software, scanners) are accounted for in Information Technology’s capital budget (Operations Division). These requests total $20,000. ACTUAL FY 06 2,748,635 884,078 3,796,918 7,429,631 63,354 37 ACTUAL FY 07 3,214,096 1,000,423 3,584,509 7,799,028 38,957 41 ACTUAL FY 08 3,803,256 1,178,681 4,210,412 9,192,348 26,809 45 EXPENDITURES BY CATEGORY Salaries & Wages Employee Benefits Services & Supplies Capital Outlay Full-time Personnel REVISED BUDGET FY 09 6,233,757 2,072,300 5,110,149 13,416,206 29,417 87 PROPOSED BUDGET % FY 10 CHANGE 5,476,800 (12.1%) 1,930,800 (6.8%) 4,329,800 (15.3%) 11,737,400 (12.5%) (100.0%) 87 0.0% Due to economic conditions and projected decreases in revenues for FY 2010, expenditures in all areas have been reduced. The decrease in Salaries and Benefits sections is due to a hiring freeze, which has left 15 positions vacant. 33 GENERAL GOVERNMENT BOARD OF DIRECTORS The general government function includes the Board of Directors along with the Executive, Human Resources, Public Affairs and Finance departments. The Board of Directors is comprised of 14 members representing Clark County, the incorporated cities within, and various segments of industry. The Board’s primary function is to formulate policies to guide the LVCVA in fulfilling its mission to attract visitors by promoting Las Vegas as the world's most desirable destination for leisure and business travel. For additional information regarding the Board of Directors, such as members and terms of office, see page 3. EXECUTIVE The Executive Department is responsible for the general administration of the LVCVA and is not only comprised of the offices of the President, Senior Vice Presidents and Board-related activities, but also Internal Audit and Legal Counsel. Executive management meets daily with employees, hotel CEOs, community leaders, and convention association presidents to discuss any potential problems, as well as changes in the trends of the travel and convention industries. Internal Audit is responsible for determining whether organizational units are performing their planning, accounting, custodial or control activities in compliance with management instructions, applicable policies and procedures and in a manner consistent with both LVCVA objectives and high standards of administrative practice. Legal Counsel meets with other divisions to ensure compliance with local government, state and federal laws, assists in preparation of proposed legislation, and conducts lobbying activities, acts as general counsel to the LVCVA Board of Directors, and drafts and approves legal documents (i.e. contracts, bid proposals). GOALS Partner with the resort industry to increase visitor volume and room nights while maintaining an effective average daily rate. (Executive Management) Implement the fifth-year of the of the five-year vision plan. (Executive Management) Coordinate all elements of marketing and operations to brand the destination for increased exposure and visitor volume. (Executive Management) 34 GENERAL GOVERNMENT PUBLIC AFFAIRS Public Affairs is responsible for a broad spectrum of communication activities with a variety of stakeholders. The primary goal of the department is to generate positive news coverage of the Las Vegas destination. The News Bureau operates as part of the department and lends support by providing video and photography of current and historical events. The Public Affairs department is also responsible for educating the public about the benefits the LVCVA provides the community, both directly and indirectly. This department also develops communication programs designed to keep employees informed of LVCVA activities. The Public Affairs department continually implements communication plans and strategies to promote leisure and business travel to the destination. GOALS Increase community awareness of the benefits and impacts of the travel and tourism industry for Southern Nevada. Improve return on investment of international media familiarization tours through enhanced strategic planning and coordination with international offices. Apply social media platforms to distribute the message of the Las Vegas brand by increasing awareness of destination attractions and events. Produce and distribute LVCVA Newsletter electronically for efficiency and effectiveness. ACTIVITY MEASURES Actual FY 08 1,076 77 4 28,000 84,863/10 3 6 211 Est. FY 09 1,220 85 6 30,800 90,000/85 10 200 Est. FY 10 1,250 90 7 32,000 95,000/11 0 12 200 Media inquiries coordinated News releases generated Video news releases distributed Online press kits page views News Bureau photos distributed/distributed via wire Community displays Speaking engagements PRIOR YEAR ACHIEVEMENTS Developed new public relations strategies to increase awareness of the destination in key domestic markets. Increased the number of public relations placements in the three major international markets: United Kingdom, Canada and Mexico. Increased distribution of News Bureau photos internationally by developing relationships with wire services overseas and through increased communication with LVCVA International Offices. Enhanced strategic return on investment for public relations elements of integrated marketing initiatives. Developed and implemented the following strategic plans and campaigns: o o o o To make the community aware of the 50-year anniversary of the Las Vegas Convention and Visitors Authority and the Las Vegas Convention Center. To highlight the enhancement program of the Las Vegas Convention Center. To highlight the 25th anniversary of Mesquite. To emphasize the value of the meetings and convention industry in Las Vegas. 35 GENERAL GOVERNMENT HUMAN RESOURCES Human Resources is responsible for development, promotion and implementation of Authority–wide policies and procedures, along with development of various employee and service-oriented programs. This department provides advice, guidance and support to Authority-wide initiatives, issues, priorities, and goals, and is not limited to employee services, cultural diversity, and health and wellness. Services provided include: recruitment, staffing, and employment; learning and professional development; affirmative action; employee/labor relations, collective bargaining negotiation, contract interpretation; compensation program administration, including evaluation and classification; administration of salary and benefit programs; the administration of employment terms and conditions and employee health, wellness and morale programs. GOALS Promote a healthy and productive working environment through an innovative corporate culture. Design the Las Vegas Authority Academy to be the umbrella of centralized professional development courses. Administered by the Human Resources department, learning programs consist of new hire orientation, customer service programs, leadership training, and an online learning catalog of over 800 professional development classes. Reduce Workers Compensation claims and costs though a partnership with our safety program. Improve communication and cooperation with the Service Employees International Union (SEIU) by holding monthly meetings with the Employee Management Relations Committee, comprised of union stewards and members of management. Enhance the LVCVA’s image by becoming a presence in the Las Vegas community through participation in community activities, such as Bring Your Child to Work Day, LV Marathon, and Santa Run. ACTIVITY MEASURES Actual FY 08 402 644 2,610 263 12 492 149 Est. FY 09 122 250 1,200 702 4 1,462 135 Est. FY 10 150 125 750 975 12 250 150 Authority Academy class attendance Employees processed (promotions, transfers, hiring & separations) Applicants processed Recognition program cards redeemed Employee Management Relations Committee Meetings Only Vegas…Because of Us Gathering meetings attendance Employees participating in Corporate Challenge PRIOR YEAR ACHIEVEMENTS Revised the oral board process by instituting approved interview questions, holding consistent timelines for filling positions, and implementing a more efficient job postings system. In addition, New Hire Orientation was updated and “On Boarding” techniques were introduced. Developed and executed the internal branding campaign, “Only Vegas…Because of Us” enculturation program through a series of “Gatherings” that showcased “a day in the life” of all departments. These educational sessions were hosted by the departments in order to create an awareness of how each contributes to the success of the LVCVA. 36 GENERAL GOVERNMENT HUMAN RESOURCES (continued) Partnered with and provided support to the Las Vegas Chamber of Commerce on the following programs: o o o o Customer Service Excellence Recognition Program (including the quarterly recognition ceremonies); Focus – Las Vegas; Leadership Las Vegas; and Chamber Business Council. Added four new programs to The Authority Academy: o Powerful Presentations - designed to give employees the opportunity to enhance their presentation skills and learn valuable techniques to polish their public speaking charisma; Coaching for Emerging Leaders - a three month individualized coaching series led by a professional business coach; Franklin Covey’s Seven Habits of Highly Effective People workshop - during which employees learn the key principles that underlie effective productive living and the seven habits based on these principles; and Edward DeBono’s Six Thinking Hats - a simple, effective technique that shows employees how to hold critical meetings with increased effectiveness and creativity. o o o Revised employee evaluation and performance processes and forms. Scheduled workshops to introduce the program to employees. Streamlined internal processes for Workers Compensation and Educational Assistance programs through the Human Resources Information System. Coordinated four financial seminars presented by the Nevada Federal Credit Union to the LVCVA employees. Contributed to the community through company-sponsored blood drives, and high school and college student internships. 37 GENERAL GOVERNMENT FINANCE The Finance department is comprised of Financial Resources, Financial Systems, Accounting, Payroll, Travel, Record Management, Purchasing and Materials Management activities. During fiscal year 2009, the Purchasing department was integrated into the Finance department. The Finance department received the following recognition in FY 2009: Government Finance Officers Association – Distinguished Budget Presentation Award - In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, an operations guide, a financial plan and a communications device. This is the twentieth consecutive receipt of this award. Government Finance Officers Association – Certificate of Achievement for Excellence in Financial Reporting – This prestigious national award recognizes conformance with the highest standards for the preparation of state and local government financial reports. This is the twenty-sixth consecutive receipt of this award. National Purchasing Institute – Achievement of Excellence in Public Procurement Award – This award recognizes achievement of organizational excellence in public procurement by demonstrating excellence in innovation, professionalism, productivity and leadership attributes. This is the fourteenth consecutive receipt of this award. FINANCE The mission of the Finance Department is to allocate the LVCVA’s financial resources in accordance with applicable policies and laws, to safeguard the LVCVA’s assets, and to provide accurate and timely financial information and assistance. The Finance Department maintains a general accounting system for the LVCVA to ensure accountability in compliance with legal provisions and in accordance with generally accepted accounting principles. Financial Resources is responsible for cash management, debt management, capital assets and investment of the LVCVA’s funds within the guidelines of Nevada Revised Statutes and the LVCVA’s investment policy. Additional responsibilities include preparation of the LVCVA’s comprehensive annual financial report (CAFR). The travel function oversees all travel arrangements for LVCVA staff, FAMs, and contest winners. Financial Systems section oversees the preparation and production of the annual budget, administration of the grant programs, the LVCVA records management program and supports all computerized financial systems (accounting, payroll, time & attendance, and imaging systems). The Accounting section is responsible for the maintaining the general ledger, processing accounts payable, accounts receivable and payroll, producing monthly expenditure/budget reports, and handling project accounting. Over 2,400 line items are monitored to ensure proper posting of journal entries, cash receipts, client invoices, budget transfers, purchase orders and invoices. Payroll processes the LVCVA’s bi-weekly payroll for over 500 full-time employees and over 300 intermittent and temporary employees. Additional duties include payment of voluntary and involuntary deductions, various bonus programs, federal/state taxes, and retirement contributions. 38 GENERAL GOVERNMENT FINANCE (continued) PURCHASING The purchasing and materials management functions are the main components of the Purchasing section of the Finance Department. It is with great pride that this team fosters the requirements of all procurement within the LVCVA, under local, county and state regulations. Our goal is to cultivate knowledge and necessity while promoting internal and external customer service to meet inter-department goals and objectives. The Purchasing section works closely with all areas of the LVCVA in determining the proper quantities and quality of materials and supplies necessary to perform all functions. Following legal requirements, purchases which exceed an annual cost of $25,000 are put out to bid, promoting fair and open competition. Purchases between $25,000 and $50,000 are solicited to a minimum of two suppliers in accordance with state law. Bids are routinely sought on purchases below this amount in order to conserve public funds, as well as obtain the best product for the lowest possible price. An additional responsibility is the administration of contracts. This includes negotiating and managing contracts while monitoring deliverables, mediating, and assisting in dispute resolution, and conducting performance evaluations. This area also maintains insurance documentation to ensure proper requirements are satisfied and generates weekly and monthly status reports to review expiring contracts, reviews procurement card transactions, and provides status updates on professional service agreements. The Materials Management section is made up of three support areas: mailroom, copy center and distribution center. The mailroom is responsible for processing all outbound domestic and international mail and packages. Multiple times each day, mail is distributed throughout the Las Vegas Convention Center and twice daily to Cashman Center. Package and mail processing functions include U.S. mail processing, package and document shipping and daily deliveries internally and to local Las Vegas valley customers. On an “asneeded” basis, the mailroom will hand deliver Board of Director directives and post public records in designated areas throughout Las Vegas. The copy center provides a variety of services, including large volume print jobs, duplication, color copies, binding, lamination, folding, drilling, stapling, and typesetting. Output production includes items such as the annual budget, the Comprehensive Annual Financial Report, the News Bureau Linage/Entertainment Report and other documentation supporting the LVCVA’s mission. The distribution center is responsible for managing all brochures, promotional items and selected support materials. The principal objective is to act as a distribution center while processing package and bulk shipments worldwide. Responsibilities include receipt, storage, order filling, inventory management, surplus property management, and international and domestic shipping. The brochure room which operates as a fulfillment center for brochure requests worldwide is also part of the distribution centers operations. GOALS Finance Develop and introduce a new “Investor Relations” website to provide timely financial information and further improve communications with the financial and investors community by December 30, 2009. Execute at least two initiatives to improve current services or new service levels that provide effectiveness, timeliness or efficiency of service. Develop a new initiative that will contribute to the improved quality of financial decision-making. Develop and introduce at least two training and/or assistance programs that support other departments in achieving their mission, through understanding and effectively using financial services. 39 GENERAL GOVERNMENT FINANCE (continued) GOALS (continued) Purchasing Develop current candidates for succession by focusing on professional development and mentoring, while continuing to develop the Finance Department as a cohesive team. Conduct the annual Finance Department Performance Survey, address low rated items identified on the prior year’s survey and increase the “Satisfactory” and “Excellent” ratings above the prior year’s survey by 3%. Establish “Green” purchasing standards and develop a training program for LVCVA employees. Implement at least three value improvement initiatives that support the overall goals of the LVCVA. ACTIVITY MEASURES ACTUAL FY08 Finance Receive GFOA Budget Award (total years) Receive GFOA CAFR Award (total years) Receive GFOA Award for Popular Annual Report (total years) Full time/part time employees participating in direct deposit Percent of vendors receiving payment by EFT ( LVCVA’s uninsured bond rating (Moody’s) and (S&P) Maintain a rate of return on investments at no more than 50 basis points below the 6-month T-bill Forecast annual room taxes within a 5% accuracy Number of calendar days to complete audit and produce CAFR (not to exceed 65) Number of months that G/L closed within 8 business days Staff Turnover Rate (not to exceed 10%) Maintain at minimum a 3.0 debt service coverage ratio Purchasing Years received Achievement of Excellence in Public Procurement Award Maintain procurement diversity participation of not less than 20 as a percent of purchase orders issued Notify contract “owners” at least 30 days prior to contract expiration on 97% of all contracts 19 25 2 91%/59% 15% Aa3/A+ +40bp 2.8% 55 7 16.7% 7.84 EST. FY09 20 26 3 91%/60% 16% Aa3/A+ +25 bp 20% 65 8 8.7% 4.69 EST. FY10 21 27 4 91%/60% 18% Aa3/A+ +25 bp 5% 65 11 10% 5.0 13 29% 90% 14 9% 97% 15 12% 98% 40 GENERAL GOVERNMENT FINANCE (continued) PRIOR YEAR ACHIEVEMENTS Finance Received the Certificate of Achievement for Excellence in Financial Reporting award from the Government Finance Officers Association for the 26th consecutive year. Received the Distinguished Budget Presentation award from the Government Finance Officers Association for the 20th consecutive year. Received the Award for Outstanding Achievement in Popular Annual Financial Reporting from the Government Finance Officers Association for the 2nd time. Obtained an unqualified opinion on the annual audit. Updated the 5-year strategic business plan for the Finance department, reflecting additional sections added during the fiscal year, as well as additional performance measures. Improved procedures to review and reconcile month-end financial reporting to provide more accurate, reliable, and timely reporting. Developed and fielded a comprehensive performance survey covering each section of the Finance Department. Results will be used to identify our strengths and weaknesses, and to take advantage of opportunities to increase our excellence in customer service. Supported the LVCVA “green” initiative by implementing an electronic leave request process thereby reducing printouts and storage of the paper documents. Purchasing Conducted first ever CMAR (Contract Management At Risk) delivery method for three Master Plan Enhancement Projects. Increased minority/woman-owned participation by at least 3%. Reviewed processes and completed desk manuals for approximately 50% of Purchasing staff. Established an inventory system for Client Services - complete with inventory controls, reporting and distribution accountability. Implemented a property control system with Engineering at Cashman Center to support accountability of materials used. 41 MARKETING The Marketing Division encompasses two main functions responsible for increasing leisure travel visitors and convention and meetings attendance. These functions are Marketing and Advertising, and Sales and Services. MARKETING MARKETING and ADVERTISING SALES and SERVICES ADVERTISING FTE 2 INTERNATIONAL SALES FTE 8 CONVENTION CENTER SALES FTE 13 DESTINATION SERVICES FTE 10 LEISURE SALES FTE 17 INTERNET MKTG & RESEARCH FTE 7 INTERNATIONAL OFFICES (contracted) CONVENTION SERVICES FTE 16 REGISTRATION SERVICES FTE 4 DIVERSITY MARKETING FTE 4 SPORTS MARKETING FTE 2 CONVENTION SALES FTE 28 CALL CENTER FTE 23 VISITOR INFORMATION FTE 18 42 MARKETING FY 2010 EXPENDITURES Sales & Services 23% Marketing & Advertising 77% COMPARISON OF ACTUAL TO BUDGET FY 06 - FY 07 - FY 08 - FY 09 - FY 10 Millions 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Salaries Actual FY 06 Revised FY 09 Benefits Services & Supplies Actual FY 08 Advertising Actual FY 07 Proposed FY 10 43 MARKETING BUDGET ANALYSIS No positions have been requested for fiscal year 2010. Projecting lower than anticipated room tax revenue, services and supplies expenditures are being budgeted conservatively with no increase over FY 2009. Some market development initiatives being deferred until next year. Salaries and benefits funding is decreased due to 19 vacant positions being left unfilled because of the hiring freeze. Advertising is a vital part of bringing people to our destination and therefore is showing only a slight reduction in spending compared to FY 2009. ACTUAL FY 06 9,276,044 2,728,114 19,986,680 82,923,473 114,914,311 49,986 146 ACTUAL FY 07 9,695,994 2,946,690 20,436,675 84,713,300 117,792,659 188,252 150 ACTUAL FY 08 10,119,318 3,014,978 20,774,458 88,074,185 121,982,939 21,756 152 EXPENDITURES BY CATEGORY Salaries & Wages Employee Benefits Services & Supplies Advertising Capital Outlay Full-time Personnel REVISED BUDGET FY 09 10,280,800 3,167,700 18,539,148 89,821,417 121,809,065 7,750 152 PROPOSED BUDGET % FY 10 CHANGE 9,384,500 (8.7%) 3,063,700 (3.3%) 18,543,100 0.0% 86,525,300 (3.7%) 117,516,600 (3.5%) 9,500 22.6% 152 0.0% The Marketing Division’s budget includes $9,500 in capital item requests (i.e. office and visitor information center furniture, and equipment), which is accounted for in the capital improvement and replacement fund (see page 80). Computer-related items (i.e. computers, printers, software, scanners) are accounted for in Information Technology’s budget (Operations Division), however there are no requests this year. 44 MARKETING The Marketing Division encompasses two functions responsible for increasing leisure travel visitors and convention and meetings attendance. These functions are as follows: Marketing and Advertising Sales and Services The Marketing Division has developed the following goals: Market the destination by utilizing advertising, sales and special events, supported by research, internet programs and marketing/convention services, toward the goal of attracting visitors by promoting Las Vegas as the world's most desirable destination for leisure and business travel. Continue to serve Las Vegas’ traditional market segments while increasing emphasis on target markets, such as Canada and Mexico, and emerging markets, such as China, Russia, India and Brazil, trade show and convention, domestic Hispanic, African American and Asian segments, contemporary lifestyle and the gay and lesbian markets. 45 MARKETING MARKETING and ADVERTISING The Marketing functions: Advertising, Sports Marketing, and Internet Marketing and Research implement programs that focus on understanding and reaching new and existing markets while supporting the functions of Sales and Services. ADVERTISING The Advertising Department is responsible for promoting Las Vegas and Southern Nevada through a variety of mediums to the leisure and business traveler. The current economic climate will continue to pose challenges for both leisure and business travel. The LVCVA will maintain budgets in order to continue to market aggressively to address and overcome those challenges. SPORTS MARKETING Las Vegas has become one of the most recognizable brands in the U.S. and arguably the most desirable destination in the world. The city is now positioned to attract some of the world’s most exciting events. Las Vegas has played host to events crossing all segments of the sports and entertainment landscape, including NASCAR and NHRA racing, the National Finals Rodeo and the NBA All-Star Game. In addition, major artists representing stage, screen and music continue to make Las Vegas a must stop on their annual tours. The outlying areas of Mesquite, Primm and Laughlin also continue to host events such as Laughlin Rodeo Days, Primm 300 Off-Road Race, and the Mesquite Long Drive competition. These events continue to draw first-time visitors to these locations. Working with Las Vegas Events (LVE), the LVCVA’s positioning of Las Vegas as the event and entertainment capital of the world, continues to enhance the brand and drive occupancies during traditionally slower periods of the year. INTERNET MARKETING & RESEARCH The Internet Marketing and Research department oversees a broad range of functions that, while diverse in scope, share the common focus on understanding and exploiting information and technology to develop and support the LVCVA’s overall marketing strategy. The department’s wide range of research projects and programs tracks the dynamics of Las Vegas and Southern Nevada, as well as the nationwide competitive gaming and tourism industries. Among the research programs administered by the department are monthly executive summaries of tourism and convention indicators, annual visitor profile studies that track visitor demographics and behaviors, quarterly marketing bulletins, and a variety of programs to monitor local, national and global travel trends. The Internet Marketing function includes devising processes and procedures to ensure relevant and timely web content, responding to web site-related inquiries from the general public, reviewing the performance of the web sites, managing the Authority’s email marketing programs and optimizing results of email campaigns through tracking reports and analysis. In addition, the department acts as a liaison with the LVCVA’s advertising agency to incorporate appropriate content into branding and promotional campaigns on the LVCVA’s destination marketing web sites: VisitLasVegas.com, LVCVA.com, VisitLaughlin.com, VisitMesquite.com, VisitPrimm.com and VisitBoulderCity.com. 46 MARKETING MARKETING and ADVERTISING (continued) GOALS Advertising Implement tactical programs within the Take a Break USA strategic umbrella. Continue promotions to drive referrals and bookings to resort partner properties. Develop cooperative marketing programs to assist resort partners with targeting key feeder markets. Aggressively market the serious business side of Las Vegas to meeting planners and key decision makers. Develop strategic partnerships and sponsorships that drive visitation and room nights for the destination. Implement event driven marketing program to highlight resort property event programs. Sports Marketing Create one new major sports related initiative in conjunction with our current media promotions. Work with the National Hockey League to expand their 2010 awards programming. Expand the 2009 NBA Europe Live programming to include a United Kingdom media promotion promoting Las Vegas leading up to the 2009 games. Internet Marketing and Research Convert data collection for occupancy and ADR surveys from fax to electronic system. Explore and implement features to aggregate room rate and property rating information on VisitLasVegas.com. Implement re-configured consumer e-newsletter and e-blast program with enhanced segmentation, messaging and frequency based on user-defined parameters. Develop dedicated LVCVA web presence for mobile and smart phone devices. ACTIVITY MEASURES Actual FY 08 Sports Marketing Event Leads/Bookings Hospitality programs held Number of TV/radio events Internet Marketing and Research Statistical Reports and Publications produced Web site visits-combined LVCVA Sites– in millions Web site page views–combined LVCVA Sites– in millions Web site referrals-combined LVCVA sites – in millions 46/97 30 25 31 7.1 70.3 4.9 Est. FY 09 50/100 30 40 34 8.1 71.1 4.45 Est. FY 10 55/100 30 45 31 8.5 72.9 4.5 47 MARKETING MARKETING and ADVERTISING (continued) PRIOR YEAR ACHIEVEMENTS Advertising Launched new meetings brand campaign – Behind the Scenes Hero. Implemented a meetings/conventions strategic plan and campaign to counteract negative misperceptions of Las Vegas as a serious business destination – Open Letter, Weathering the Storm. Launched 3 retail campaigns to address economic downturn (based on research findings and adjusted as findings shifted). Vegas Right Now Crazy Times Vegas Bound Developed innovative “first of its kind” fully integrated campaign with Vegas Bound – brought entire town to Vegas, YouTube elements, webisodes, referral opportunities, etc. Developed new LGBT campaign – Take a Break message with landing page on vlv.com. Sports Marketing Booked the National Hockey League Awards Dinner and Draft for 2009-2011, the first time the event has been held in the Continental U.S. Worked with the City of Mesquite to secure the building of a major sports facility, the Desert Falls Sports Complex. It is scheduled to open in the fall of 2010 Managed the elements of the 2008 NBA Europe Live promotion, including client hospitality and oncourt presentation. Internet Marketing and Research Served on a pilot study group tasked with devising new international tourism metrics for Las Vegas based on credit card transaction data. Developed and implemented a Visitor Motivation study to assess visitor perceptions and behaviors during the national and global economic slowdown. Supported LVCVA "green" efforts by utilizing 452,000 fewer sheets of paper (the equivalent of 54 trees) by replacing hard copies of core research publications with electronically distributed versions. Developed and launched a re-configured VegasMeansBusiness.com web site to support sales, advertising, advocacy and PR efforts in response to the meetings crisis in the wake of TARPfunded companies holding meetings in Las Vegas and elsewhere. Integrated updated e-RFP and Meetings "Hot Dates" feature on LVCVA.com and CVBHotRates web site. Launched and devised procedures for new Digital Marketing Center to facilitate email marketing programs for Marketing and Sales departments. Expanded and updated special offers features on VisitLasVegas.com and VisitLaughlin.com to support urgent messaging to promote near-term travel to Las Vegas. Incorporated online booking feature on VisitMesquite.com. 48 MARKETING SALES and SERVICES The Marketing functions: Leisure Sales, Diversity Sales, Destination Services, Convention Sales and Services, and International Sales play an integral role in securing new and maintaining existing business visitors for the destination. These teams are strategic as well as targeted. They continue to position the Las Vegas brand to remain “top of mind” with industry professionals and competitive within the international and domestic leisure, meetings and trade show industries. The distinct yet equally important disciplines support the LVCVA’s mission to promote Las Vegas as the leading destination for business and leisure travel. LEISURE and DIVERSITY SALES – DESTINATION SERVICES The LVCVA’s Sales Teams dedicated to Leisure Sales, Diversity Sales and Destination Services promote Las Vegas to facilitators of leisure and business travel. Utilizing both traditional and new creative to stimulate booking of travel to Las Vegas, these teams primary responsibilities are to maintain existing business and create demand for new business for the destination. The Leisure Sales team’s main objective is to develop creative and targeted programs designed to motivate domestic and international purchase of travel packages to Las Vegas through wholesalers, consortiums, airlines, tour operators, online travel agencies and retail travel agencies. Additionally, the leisure sales staff continues to develop educational programs targeted to sellers of domestic and international travel for the purpose of keeping them informed on the ever-changing destination’s amenities and keeping Las Vegas top of mind for sales opportunities. Diversity Sales aggressively pursues leisure and convention business from the African American, Hispanic American, Asian American and Lesbian, Gay, Bisexual and Transgender (LGBT) markets. These lucrative markets represent a full 30% of the total visitor volume to Las Vegas and strategies and tactics that mirror the LVCVA’s overall marketing programs are in place to command Las Vegas’ share of these segments. Destination Services staff focus on the logistics of bringing visitors to Las Vegas and Clark County and ensuring that their experiences are pleasant and memorable. Employees in Marketing Services, Call Center Operations, Registration Services, and Visitor Information Centers deliver the Las Vegas brand by assisting with room reservations, providing convention staffing assistance, and offering a myriad of information about Southern Nevada to more than one million customers while giving administrative support to the varied sales and marketing activities. GOALS Leisure Sales Develop a nationwide booking incentive campaign with travel leaders. These campaigns will be designed to motivate their travel agents to book vacation packages to Las Vegas during need periods and also on as needed basis. MasterCard and American Express will be solicited to added valued components to enhance our marketing efforts. Conduct the Vegas Experience/Young Leaders in Travel conference in July 2009. This conference will be promoted via Travel Agent magazine and will include a social networking component to attract 150 travel agents under 40 years of age. Develop a national booking incentive with Luxury Travel Expo targeting fall travel periods and will tie in American Express Travel network. Organize and execute “Laughlin Day” events for a minimum of four active adult communities in the Greater Phoenix, Las Vegas or Southern California areas. (Laughlin) Created a “Laughlin Zone” for a minimum of two events in Las Vegas (i.e. NASCAR, Bike Fest, outdoor concerts). (Laughlin) Create a comprehensive booklet of sporting and special event venues and opportunities by October 1, 2009 for distribution at TEAMS and to be direct mailed to other know planners of sports and event travel. (Mesquite) 49 MARKETING SALES and SERVICES (continued) GOALS (continued) Leisure Sales (continued) Create a meeting/group travel planner loyalty or reward program for booking group business in Mesquite by October 1, 2009 to stimulate winter room utilization. (Mesquite) Diversity Sales Identify and solicit 15 major minority and LGBT annual conferences with attendance of 1,500+. This targeted outreach will also result in ancillary board meetings and regional conferences while increasing visibility and enhancing Las Vegas’ credibility as a viable destination for emerging market meetings. Develop LGBT and Hispanic booking incentives with ten wholesale partners and three consortia to book business during the summer months. Conduct a FAM of 50 Hispanic travel agents and meeting planners during Hispanic Heritage month, September 2009. Destination Services Support the LVCVA’s Green Initiative by transitioning from document mailing to electronic distribution thus saving paper and reducing postage costs. (Marketing Services) Develop hotel concierge outreach program to increase awareness of Call Center services by visiting 4 hotel properties monthly. (Call Center) Increase the number of new clients by 20% over FY 2009. (Registration) Re-open the Nevada Welcome Center at Primm to meet the needs of travelers on I-15. (Visitor Information Centers) ACTIVITY MEASURES Actual FY 08 Leisure Sales LVCVA networking events produced Industry specific familiarization tours held Vegas Certified Travel Agents conferred Travel industry conventions hosted Airline liaison meetings held Leads generated (Laughlin/Mesquite) Outside sales calls completed (Laughlin/Mesquite) Trade Shows attended (Laughlin) Familiarization tours (Laughlin/Mesquite) Events held(Laughlin/Mesquite) Diversity Sales Direct Mail Campaigns (Diversity) Room Nights Generated from Bookings (Diversity) New Accounts (Diversity) Destination Services Leads processed (Marketing Services) Accounts managed in ELVIS (Marketing Services) Meetings and conventions supported – (Registration Services) Incoming calls managed – (Call Center) Las Vegas Territory visitors assisted – (Visitor Information Centers) 50 Est. FY 09 37 9 3,800 7 12 175/65 85/50 10/9 14/6 12/6 5 90,000 83 3,063 43,315 277 163,206 223,552 Est. FY 10 39 11 4,000 7 12 200/70 100/60 12/10 15/7 16/7 7 100,000 100 3,500 43,500 291 150,000 225,000 35 7 3,232 7 12 198/60 96/43 19/8 12/5 24/5 1 50,771 55 3,740 43,576 283 201,385 248,040 MARKETING SALES and SERVICES (continued) PRIOR YEAR ACHIEVEMENTS Leisure Sales Conducted a travel agent booking incentive, tied to the annual Luxury Travel Expo, which resulted in over 4,000 attendees. Booked the National Tour Association annual conference that will bring 4,000 tour operators, media and suppliers to Las Vegas in 2011. Booked the Arizona Sunbelt Chapter of Meeting Professionals International Summer Educational Forum for July 2009 bringing 28 meeting planners and 52 suppliers to Laughlin. (Laughlin) Completed four community presentations on the roles and responsibilities of the LVCVA and Laughlin Visitors Bureau in support of the President/CEO’s goals. (Laughlin) Secured 10th Annual Spotlight On The Southwest Motor Coach/Tour Operator Conference. (Mesquite) Negotiated successfully with Mammoth Marathons to produce an annual event in Mesquite beginning November 2009. (Mesquite) Assisted in all efforts to promote Mesquite's 25th Anniversary to include a multi-faceted advertising campaign, the creation of a four-color poster, the development of an Armed Forces Weekend of Events, and the sponsoring and hosting of a veterans appreciation party on May 16, 2009. (Mesquite) Diversity Sales Increased bookings from minority and LGBT meetings and conventions by 53.5%. Booked the annual conference of the National Council of LaRaza (the nation’s largest Hispanic civil rights organization), bringing 10,000 attendees to the destination in 2012. Created a 12-page newsletter “Las Vegas Means Business” and mailed it to over 2,000 travel agents and meeting planners specializing in LGBT travel and meetings. Destination Services Implemented the Digital Marketing Center which enabled more timely communication with our hotel partners and provided an electronic system for invitations with response mechanism for sales events. (Marketing Services) Implemented an online reservation program for Mesquite properties accessible through VisitMesquite.com. (Call Center) Implemented hotel awareness campaign of services available for hotel meetings customers. (Registration) Improved visibility of all visitor information centers through installation of new signage on the exterior and interior of the facilities. (Visitor Information Centers) 51 MARKETING SALES and SERVICES (continued) CONVENTION SALES and SERVICES The Convention Sales, Convention Center Sales and Convention Services teams are directly aligned to provide the users of the Cashman Center and the Las Vegas Convention Center a superior customer experience. Convention Sales teams promote Las Vegas to meeting planners and associations. This is done by creating an environment of trust, care, and communication during all aspects of the trade show/event sales and services cycle. The Las Vegas Convention and Visitors Authority has established itself as the world’s leading trade show/event experience provider. Convention Center Sales brings the art of sales to a new level. Even when looking at a full calendar they consistently deliver new business to the Las Vegas market place. Through the use of six vertical markets and a keen eye toward maximizing the use of convention space, this team delivers a diversified base of business for all of Las Vegas to enjoy. The Convention Services team at the Las Vegas Convention Center and at Cashman Center continues to provide the industries bench mark for service standards. Superior customer care leads to years of repeat business. Committed convention service managers quickly adapt to all challenges that the world’s leading convention center presents while relishing the fact that our clients are extremely satisfied at the end of their event. Convention Sales executives aggressively solicit association, corporate and incentive business for the Las Vegas area. They secure business through targeted face to face marketing, creative sales programs and the deployment of highly skilled sales executives that service vertical market segments. These vertical markets are identified along medical, technology, construction, incentive, pharmaceutical, insurance, financial and association sectors. Using a state of the art Customer Relationship Management system and using advanced strategic account methodologies, the convention sales team is able to engage customers in the most efficient manner for the destination. GOALS Convention Sales Provide consistent and timely leads to the Las Vegas hotel community. Increase customer contact by increasing bookings for meetings business in the Las Vegas area. Deploy broad based convention attendance promotion services to increase participation at business events in the Las Vegas area. Execute the Meetings/Convention Industry Strategic plan. Convention Services Work with the Clark County Fire and Building Departments, and other local convention facilities, to review and develop county-wide standardized policies and regulations that pertain to trade shows in Clark County. Maintain an average customer satisfaction rating of 4.5 for Convention Services Managers based on the Show Management Survey. Work with LVCVA Legal Counsel to institute master leases for local government entities that book numerous events in both Cashman Center and the Las Vegas Convention Center. Beta test and implement the new program for show invoicing in conjunction with ITD. 52 MARKETING SALES and SERVICES (continued) ACTIVITY MEASURES Actual FY 08 Convention Sales LVCVA networking events produced Industry events attended Leads/bookings generated Convention attendance promotion services deployed Industry trade shows exhibited Convention Services Space blocks processed (LVCC/Cashman) New leases generated (LVCC/Cashman) Revised leases processed (LVCC/Cashman) Booking orders processed (LVCC/Cashman) Conventions/events (LVCC/Cashman) PRIOR YEAR ACHIEVEMENTS Convention Sales Expanded the use of convention attendance promotion services for the benefit of our customers by 300%. Implemented critical sales programs for our Las Vegas area hotel partners to find new business. Drove new and incremental convention business to the Las Vegas hotel community through concentrated sales efforts. Deployed a new meetings industry tool for the business travel community vegasmeansbusiness.com. Convention Services Coordinated 83 conventions and trade shows at the Las Vegas Convention Center and 277 public events, trade shows and meetings at Cashman Center. Developed and implemented new leasing and insurance procedures that have resulted in 100% insurance compliance and timely execution of building leases. Conducted 24 one-on-one meetings and conference calls to clients to inform them of impacts to their shows related to the Master Plan Enhancement Project. 85 225 3,100/2,812 11 30 186/239 160/294 316/144 789/404 83/277 Est. FY 09 90 225 3,200/2,90 0 43 30 383/200 100/120 285/75 700/200 90/141 Est. FY 10 102 230 3,300/2,950 55 31 385/225 125/200 300/125 725/300 80/225 53 MARKETING SALES and SERVICES (continued) INTERNATIONAL SALES The International Brand Strategy and International Sales department were created to develop and implement a consistent and coherent international brand strategy for Las Vegas. The key strategic elements of that strategy include: • • • • • Expanding the global reach of the Las Vegas brand. Achieving a mix of a regionalization strategy with a country-specific strategy throughout the world. Implementing regionalization brand strategy across the European Union, Australia/New Zealand/Southeast Asia, South America and Russia/Eastern Europe. Enhancing our country-specific strategy in the major markets of Canada, Mexico and the United Kingdom, and the primary markets of Japan and South Korea. Establishing the Las Vegas brand in the emerging markets of China, Russia, India and Brazil. GOALS Identify and seize current international travel and tourism bright spots, and respond to changing global economic uncertainties. Partner with McCarran Airport to complete a joint, comprehensive airline strategy to increase airline seats to Las Vegas (by scheduled airline carrier or charter, by direct or one-stop service, short or long term etc.) and to support increasing passenger load factors from around the world. Prioritize budget dollars across regions, and in countries, based on realistic projections of increased visitation to Las Vegas. Initiate direct consumer advertising in the major markets of Canada, Mexico and the United Kingdom. Achieve integrated travel and trade promotions with selected international partners in all primary markets. Launch specific LV branding initiatives to ensure proper brand presence for Las Vegas in the emerging markets. Establish key international performance indicators (KPI’s) that effectively transition from simply reporting activity to actually measuring productivity. PRIOR YEAR ACHIEVEMENTS In the absence of established key performance indicators (a goal for FY 2010 noted above), the following is a representative sample of global activities reported that were completed last year: • • • Developed numerous booking incentive programs that generated 15-33% increases in our partners year-over-year sales in major markets (of Canada, Mexico and the UK). Organized, coordinated and hosted seven major Sales Missions to Canada, Mexico, the United Kingdom, Europe, Australia, China and Brazil. Branded Las Vegas across our major, primary and emerging markets by exhibiting at a significant number of international tradeshows, the most in our history. 54 OPERATIONS The Operations Division has the overall responsibility for the operation and maintenance of the Las Vegas Convention Center and Cashman Center. Additional activities are Customer Experience, Project Development, Safety and Security and Information Technology. OPERATIONS FACILITIES SECURITY FTE 39 CLIENT SERVICES FTE 126 TRAFFIC FTE 17 PHYSICAL SECURITY FTE 17 ENGINEERING FTE 113 PROJECT DEVELOPMENT FTE 4 INFORMATION TECHNOLOGY FTE 15 CUSTOMER EXPERIENCE FTE 2 55 OPERATIONS FY 2010 EXPENDITURES Client Services 24% Other 2% ITD 5% Security 17% Engineering 52% *Other includes Project Development and Customer Experience as those departments, when taken separately, account for less the 5% of the expenditures. COMPARISON OF ACTUAL TO BUDGET FY 06 - FY 07 - FY 08 - FY 09 - FY 10 Millions 25 20 15 10 5 0 Salaries Actual FY 06 Revised FY 09 Benefits Actual FY 07 Proposed FY 10 Services & Supplies Actual FY 08 56 OPERATIONS BUDGET ANALYSIS No new budget positions have been requested for FY 2010. Capital item requests (i.e. furniture and equipment) totaled $38,800, which is accounted for in the capital improvement and replacement fund (see page 80). All computer-related budget requests (i.e. computers, printers, software, scanners, and network servers) are accounted for in Information Technology’s capital budget. Operation’s requests total $265,500; other divisions’ requests total $20,000. REVISED BUDGET FY 09 18,944,100 6,943,400 13,499,297 39,386,797 1,169,000 333 PROPOSED BUDGET % FY 10 CHANGE 18,596,900 (1.8%) 6,719,500 (3.2%) 14,159,000 4.9% 39,475,400 0.2% 324,300 (72.3%) 333 0.0% ACTUAL FY 06 18,115,761 6,242,792 12,531,543 36,890,096 1,962,742 330 ACTUAL FY 07 20,183,998 6,897,932 14,187,700 41,269,630 2,536,075 346 ACTUAL FY 08 21,843,127 7,337,491 14,759,652 43,940,270 2,237,767 377 EXPENDITURES BY CATEGORY Salaries & Wages Employee Benefits Services & Supplies Capital Outlay Full-time Personnel Of the services and supplies budget, approximately $9 million is devoted to utilities (64%), and $1.8 (12.7%) million is for repair and maintenance, which accounts for the increase in the services and supplies budget. Due to projected decreases in room tax revenue, a hiring freeze has been implemented resulting in lower costs for salaries and benefits. There are currently 16 positions vacant in the Operations division. 57 OPERATIONS The Operations Division has the overall responsibility for the operation and maintenance of the Las Vegas Convention Center and Cashman Center. Additional activities are Customer Experience, Project Development, Safety and Security and Information Technology. To fulfill the LVCVA mission, the following goals have been created: Raise the division’s customer service excellence to new levels through the introduction of new service initiatives enhancing our visitors’ destination experience. Introduce initiatives to promote and implement “Living the Brand” through employee development, partner education and stakeholder outreach to ensure a consistent understanding and delivery of the LVCVA brand promise. Continue to implement processes that enhance our “Housing the Brand” experience including Master Plan Enhancement Program communication to event managers and attendees, capital projects and implementation of a comprehensive preventative maintenance program. Work collaboratively with other LVCVA Divisions to support their mission critical objectives and to develop shared goals to improve the overall customer experience. Fully develop the LVCVA’s commitment to sustainability including the establishment of green operating procedures, increased energy measurement & efficiencies and staff education in LEED (Leadership in Energy & Environmental Design) certification. Establish a platform of key performance measures to be used to measure the division’s overall success at year end. 58 OPERATIONS CUSTOMER EXPERIENCE The Customer Experience Department was established in 2006 to head-up the LVCVA’s efforts to address the specific needs of our attendee and exhibitor customer base. Globally, Customer Experience is responsible for developing programs that deliver the LVCVA’s brand promise at both the Las Vegas Convention Center and Cashman Center. The brand promise is delivered to our attendees, exhibitors and show managers when they arrive on site for their event. Examples of brand promise delivery are clean facilities, reasonably priced food and beverage options, availability of appropriate business services, availability of up-to-date technology, ease of transportation to and from the facility, and helpful employees and stakeholders in the facility. Key functions include being a liaison among various departments in the Operations and Marketing divisions and to establish campus wide programs and initiatives that will improve our customers’ experience. In particular, direct responsibilities include delivery of our facility partners’ (i.e. ARAMARK, Smart City Networks, and FedEx Kinko’s) operational performance and quality of services. Additionally, the department reviews services delivered by our facility stakeholders such as general service contractors, exhibitor approved contractors, taxi and transportation companies, etc. Relative to the Master Plan Enhancement Program, Customer Experience’s role will focus on ensuring that physical improvements in the Las Vegas Convention Center (LVCC) are reflective of the key services the attendees and exhibitors need for a successful event. This includes those services and products currently offered at the LVCC and those that could be offered in the future enhanced facility. GOALS Improve results of the Customer Experience survey by 3-5% for internal partners, based on year-toyear comparisons. Expand the “Brand Promise” presentation and deliver presentation to key stakeholders such as internal partners, contractors, union members and hotel partners. Coordinate the inclusion of specific programs, features, and physical attributes that support a positive Customer Experience mindset. ACTIVITY MEASURES Actual FY 08 4.4 5 2 20 Est. FY 09 4.5 6 3 20 Est. FY 10 4.5 6 2 22 Customer Experience Survey results (overall satisfaction ratings from 1-5) Building partner goals to support the LVCVA Expansion of Bags to Go/Digital Departure Information locations Community/partner outreach presentations PRIOR YEAR ACHIEVEMENTS Through a partnership with McCarran International Airport, six flight departure monitors were installed in the Grand Concourse at the Las Vegas Convention Center, providing attendees and exhibitors real-time departure information for all outbound McCarran flights. Monitored and measured the results of the Customer Experience Survey to establish attendees’ needs and desires for services offered in a convention center setting both today and into the future. Information is shared with building partners to identify area of improvement and strategies for new initiatives. Made presentations to exhibitor appointed contractors, labor representatives, international facility operators and academic groups discussing customer experience initiatives. Continued to promote the mission of the “Green” Team to increase awareness of ongoing initiatives and to identify new ideas for conserving resources and encouraging sustainability. 59 OPERATIONS FACILITIES The Vice President of Facilities has direct responsibility for the operation and maintenance of the Las Vegas Convention Center and Cashman Center. This function oversees the Client Services and Engineering departments. LAS VEGAS CONVENTION CENTER The Las Vegas Convention Center, located adjacent to the Las Vegas Strip, currently encompasses approximately 3.2 million square feet with exhibit space of more than 2 million square feet and meeting space of more than 241,000 square feet. It includes 16 exhibit halls and 170 meeting rooms with seating capacities from 20 to 7,500. Parking for 5,200 cars is available on-site. See the diagram on page 6. CLIENT SERVICES Client Services is responsible for a myriad of daily show and building-related requirements as well as the overall cleanliness of the facility. These responsibilities include room set-up, production and sporting event set-up, equipment logistics, response to show manager requirements, restroom cleanliness, and tracking over $6 million dollars of equipment and supplies. In order to accomplish these activities, Client Services works closely with other internal departments, building partners, and contractors to assure our customers’ desired outcome is achieved. This teamwork and constant communication allows the department to schedule, plan, and allocate the necessary resources in a timely and efficient manner. GOALS Expand department review of various processes which have an opportunity for the reduction of recyclable material used, i.e. increased automation and discontinuing or combining forms. Re-establish succession program for various positions throughout the department to include enhancing areas of weakness and building upon strengths. Improve upon equipment use and maintenance in order to increase life span, as well as decrease downtime during times of need. Introduce an additional customer service initiative which will provide clients/visitors increased incentive for doing business with the LVCVA. ACTIVITY MEASURES Actual FY 08 55% 27% 1,190 32% 1,485 Est. FY 09 63% 29% 1,050 31% 2,200 Est. FY 10 65% 30% 1,000 31% 2,300 Recycle rate Building maintenance(% of labor hours used) Scheduled room changes Restroom support (% of labor-hours used) Work orders complete 60 OPERATIONS FACILITIES (continued) LAS VEGAS CONVENTION CENTER (continued) CLIENT SERVICES (continued) PRIOR YEAR ACHIEVEMENTS Completed in-depth customer service training program for all staff members. Established quarterly town hall meetings, informing employees of current topics such as economic conditions and event information. Achieved a 63% average for overall recycle activities at the LVCVA. Developed and implemented various training modules on safety and equipment, some of which can be used by other departments. Fine tuned multiple processes such as shared shift reports, revamping and retraining for restroom inspections and redesigned areas of coverage for managers/supervisors. Increased use of environmental friendly products. Out of 30,000 gallons of chemicals, 93% are now “green”. 61 OPERATIONS FACILITIES (continued) LAS VEGAS CONVENTION CENTER (continued) ENGINEERING The Engineering section encompasses the activities of heating, ventilation, and air conditioning (HVAC), plumbing, electrical, carpentry, painting, welding/fleet/folding walls, communications, voice systems, computerized maintenance management system (1CALL), grounds, and graphics. The section’s primary objective and responsibility is to maintain and operate all building operating systems and building components to a level that minimizes customer disruption and supports customers’ needs. Engineering continuously pursues new technology that improves building efficiencies without compromising the comfort or quality that today’s customer expects of the Las Vegas Convention Center. Engineering staff handles preventative maintenance in all areas, from maintaining 5,800 doors, including freight doors, and fleet vehicles to resolving HVAC and lighting issues, not only at the Las Vegas Convention Center, but also at the five outlying visitor information centers. GOALS Complete energy efficiency performance analysis for working towards LEED-O&M (Operations and Maintenance) certification. Host quarterly open-forum town halls for Engineering staff and management to address topics of concern to LVCVA and the department by January 30, 2010. Implement customer service training through Human Resources that is tailored to day-to-day issues and concerns faced by Engineering Supervisors. ACTIVITY MEASURES Actual FY 08 1,800 141 35,000 351 1,496 446,000 816 750 73 46 110 Est. FY 09 2,000 145 65,000 450 1,523 535,200 979 750 79 60 110 Est. FY 10 2,100 149 50,000 630 1,100 758,200 1,088 900 79 78 117 5,200 doors maintained/preventative maintenance repairs Fleet vehicle and carts repaired/maintained 275,000 bulbs and lamps maintained Maintenance of 900 plumbing fixtures Cable drops and podium sets 892,000 square feet of ceiling components 1,088 restroom partition doors and door hooks Over 1,500 electrical power panels and disconnects to maintain/ preventative maintenance repairs 113 bathrooms maintained 92 freight doors 138 air handlers maintained PRIOR YEAR ACHIEVEMENTS Enhanced the building damage process in order to ensure proper billing and invoicing as well as placing more accountability on building partners and show decorators. Completed the lighting upgrade in the food preparation area of the kitchens and concession stands as required by the Southern Nevada Health District. Upgraded MAXIMO software enhancing the ability to provide timely communication to internal customers within the LVCVA, as well as greatly simplifying the process needed to report work requests for the employees. 62 OPERATIONS FACILITIES (continued) CASHMAN CENTER Cashman Center is located on 51 acres near downtown Las Vegas just off the 515 interstate and Las Vegas Boulevard. This facility provides an outdoor sports stadium that seats 10,000 fans and is home to a Triple A baseball franchise, the Las Vegas 51s. There is a state-of-the-art theater that will accommodate 1,922 patrons, with seating on the main floor and balcony areas. The campus contains twelve meeting rooms with approximately 13,000 square feet of space and two exhibit halls with 98,100 square feet of space for small conventions, seminars, receptions and other events. See the schematic on page 7. Due to the size of Cashman Center compared to the Las Vegas Convention Center, the Client Services and Engineering departments have been combined in this narrative. The goals, activity measures and achievements listed below encompass both of these areas. GOALS Implement new initiatives focusing on elevating the customer experience. Identify and implement two new programs to promote team building across all departments by May 1, 2010, Develop and revise policies and procedures to improve sustainability, conservation and succession planning before June 1, 2010, ACTIVITY MEASURES Actual FY 08 8,643/864. 3 115 10,060 14,857 12,073 Est. FY 09 7,000/70 0 85 15,000 14,000 11,500 Est. FY 10 8,500/85 0 40 7,500 15,000 12,000 Work orders completed/work orders per skilled craftsman Number of energy efficient lighting fixtures converted Landscape converted to desert landscaping (sq. feet) Restroom support (labor hours) Show/Event support (labor hours) PRIOR YEAR ACHIEVEMENTS Reduced kilowatt hours (kWh) from 4.7 million to 4.1 million, resulting in lower utility costs. Installed stone monument signs at Las Vegas Boulevard and Washington Street entrances. Converted 10,060 square feet of grass to desert landscape saving an estimated 500,000 gallons of water annually. Implemented a recycling program for all events. 63 OPERATIONS PROJECT DEVELOPMENT The Project Development department is responsible for overseeing all construction projects from conceptual design through the permitting, construction, commissioning and final acceptance process. This department coordinates the work of the architects, engineers and construction firms for projects ranging from minor renovations and demolition projects to implementing the Master Plan Enhancement Program (MPEP). This department is dedicated to making the Las Vegas Convention Center the best convention center in the world. To achieve this, Facility Projects personnel seek out potential property acquisitions and work closely with LVCVA departments in order to identify strategic capital improvement projects. GOALS Communicate daily with the office of the Senior VP of Operations informing and apprising of any Master Plan Enhancement Program (MPEP) construction related situations which may affect the LVCVA. Complete non-suspended MPEP projects #10, #11, #4C, and chiller installation on time and within budget. All projects not suspended will be completed in the event that the MPEP does not resume. Meet with the MPEP communication committee and prepare monthly construction updates to post on the construction website for employees, circulate to LVCVA building partners, and convey to clients through Construction Show Managers. Meet regularly with Clark County personnel to discuss the status of the work completed on the current MPEP projects as well as the future MPEP construction projects in preparation for the MPEP resumption. ACTIVITY MEASURES Actual FY 08 MPEP Design and Construction plan packages reviewed and approved Construction pay applications reviewed and submitted Involvement, support, and management of projects at LVCC and/or Cashman Center PRIOR YEAR ACHIEVEMENTS Monitored and managed the Master Architect Professional Services Agreement that was formed with a group of local architects from various firms to facilitate the design of individual Master Plan Enhancement Program (MPEP) projects. Gathered data in preparation for audits, prepared and tracked responses and implemented recommendations made by the contracted construction auditing firm. Reorganized the Project Development department to allow a stronger focus on the Master Plan Enhancement Program and various strategic property acquisitions. This led to the formation of the Facility Projects Department which is responsible for small construction projects in and around the Las Vegas Convention Center and Cashman Center. 27 38 13 Est. FY 09 7 83 30 Est. FY 10 4 23 25 64 OPERATIONS SECURITY The LVCVA Security Department consists of three sections and over 200 full and part-time staff. The sections include Security, Traffic and Physical Security. The Security section is responsible for calls for service within the LVCC and is the only section with a 24/7 presence at Cashman. In addition, the Security section is responsible for administration of the nursing/first aid program, K-9 unit, and executive protection. The Traffic section consists of bike officers, perimeter security and traffic control. Perimeter Security is a relatively new component that monitors freight areas and assists in ensuring all vehicular traffic coming on property is authorized. Traffic control includes paid parking which generates revenue for the organization. The bike officers respond to calls for service all around the exterior of both the LVCC and Cashman Center. The Physical Security section consists of the control center staff, the safety office, investigators and life systems. The section is responsible for monitoring and maintaining all technologies utilized by the department to ensure the facility and all occupants are safe. Technologies include surveillance, fire systems and access control. Over the past several years, Security has added additional bike officers, a K9 unit, initiated the perimeter program, and restructured to combine safety and the control center under a single section. Over the next several years the department intends to expand the perimeter program and utilize additional technologies gained in the Master Plan Enhancement Program to help in the early detection of potential hazards and/or threats. GOALS Develop a communication structure to foster improved working relationships with the Facilities Department. Shift resources to augment the Perimeter Security program, which was an overwhelming success during FY 2009. Implement short-term improvements focusing on pedestrian and vehicle controls throughout the LVCC campus. Work with Clark County Fire Dept. to establish and communicate trade show industry guidelines to resort corridor partners as they relate to changes in newly adopted fire codes. Develop customer service initiatives utilizing empowerment and training of staff to reduce costs and provide superior service delivery. As board members of the non-profit Southern Nevada Tourist Safety Association, work with the new LVMPD Convention Center Area Command to reformat the annual international conference to multiple smaller community-based training opportunities. Initiate the next phase of Security department “green” initiatives, targeting increased employee participation, potential financial return on investments and community involvement. ACTIVITY MEASURES Actual FY 08 48% 2,032 3,932 $2,339,892 2,517 Est. FY 09 49% 4,500 3,200 $2,000,000 1,964 Est. FY 10 52% 5,500 3,000 $2,115,000 1,500 Lost/Found – percentage of items returned to owner Photo ID badges created for building workers First aid room contacts (patients treated) Paid Parking revenue Special event hours worked 65 OPERATIONS SECURITY (continued) PRIOR YEAR ACHIEVEMENTS Expanded the Perimeter Security program (30 part time employees) to include security support for three full-facility shows. This group provided freight yard coverage, which reduced the overall contract security expenditure for several events. Improved working relationships between official service contractors (i.e. GES, Freeman, etc.) and the exhibitor appointed contractors (EACs) by developing “work rules” such as equipment drop off and storage areas, parking, etc. The Security K9 team participated in more than 25 formal training session, comprising 89 hours of proficiency training. The team also attended certification training for National Association of Professional Canine Handlers. Developed fire watch training program for contract security. Worked with Clark County Fire Department to develop guidelines for multi-level outdoor structures. Modified process of issuing badges to EACs resulting in improved compliance and meeting insurance requirements. 66 OPERATIONS INFORMATION TECHNOLOGY The Information Technology Department (ITD) functions as the LVCVA’s technology support element. ITD has committed to advancing the LVCVA’s goals and objectives in a fiscally responsible manner through continuous innovation, leadership and guidance while improving service quality and applying necessary technical skills. Our mission will be accomplished through the focused and dedicated efforts of our Administrative, Support Services, Systems Maintenance and Software Development teams. Responsibilities include: maintaining all LVCVA hardware, software, networks and systems; developing new support tools, automation systems, databases and applications; establishing automation policies and procedures; Help Desk operations; and identifying cost-effective technology applications. ITD’s fiscal year focus will be to efficiently and effectively operate under current economic conditions. GOALS Provide technology support to LVCVA departments with economic realities in mind. Implement additional customer service initiatives. Support organizational “green” initiatives. Enhance Facility Digital Signage. Complete installation of new analog/digital telecommunication’s switch. ACTIVITY MEASURES Actual FY 08 186,00 0 99.75% 25.3 6.3 6.1 Est. FY 09 184,500 99.80% 14.3 3.9 4.3 Est. FY 10 180,00 0 99.90% 18 5 6 In-House Training Cost Savings (dollars) Server availability (%) Call completion time (avg. hours) Call testing/delay time (avg. hours) Call resolution time (avg. hours) PRIOR YEAR ACHIEVEMENTS Provided technology design support to the MPEP. Incorporated new directional signage technology in the LVCC. Integrated the LVCVA leads process with New Market’s Meeting Broker product. Developed new Purchasing website. Completed infrastructure to support new off-site Public Affairs facility. Completed initial server virtualization project. Implemented new disk-to-disk backup system. 67 SPECIAL EVENTS FY 2010 EXPENDITURES Special Events LVCVA 18% Special Events LVE 71% Salaries & Benefits 11% COMPARISON OF ACTUAL TO BUDGET FY 06 - FY 07 - FY 08 - FY 09 - FY 10 Millions 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Salaries & Benefits Actual FY 06 Revised FY 09 Special Events - LVE Actual FY 07 Proposed FY 10 Special Events - LVCVA Actual FY 08 68 SPECIAL EVENTS BUDGET ANALYSIS Nearly $6.3 million in funding will be provided to Las Vegas Events (LVE). In addition to the LVCVA’s contribution, LVE will use a portion of the earnings they have built up over several years to fund several events. The $1.4 million in supplemental special events funding will support our strategic objectives to increase travel to the destination. New events include partnerships with NASCAR and the National Hockey League. ACTUAL FY 06 793,823 7,547,882 1,475,000 9,816,705 ACTUAL FY 07 837,561 6,937,584 5,768,571 13,543,716 ACTUAL EXPENDITURES FY 08 BY CATEGORY 871,381 Salaries & Benefits - LVE 5,854,233 Special Events - LVE 5,241,724 Special Events - LVCVA 11,967,338 REVISED BUDGET FY 09 921,755 4,418,571 1,450,000 6,790,326 PROPOSED BUDGET % FY 10 CHANGE 837,876 (9.1%) 5,409,513 22.4% 1,460,000 0.7% 7,707,389 13.5% SPECIAL EVENTS Throughout the years, the LVCVA has sponsored and promoted special events through grants and sponsorships. The LVCVA has been instrumental in bringing many inaugural events and securing repeat performances to Las Vegas and Clark County. Prior to fiscal year 2000, special events were funded by a 5/8 of one percent portion of the restricted room tax. It was redirected to the school district for school construction by the legislature. Room taxes and use of facilities revenues now provide funding for these grants. These developments have resulted in guidelines regarding special event funding with items such as media exposure, visitor volume, and incremental room nights generated being more heavily reviewed. Also, special events that promote the brand of Las Vegas as well as targeting key visitor demographics are critical when determining event levels of funding. In 1983, the LVCVA began partnering with Las Vegas Events Inc. (LVE) to promote and encourage special events that will in turn stimulate tourism, and provide media exposure for Southern Nevada. Events sponsored range from rodeo (i.e. National Finals Rodeo) to golf (i.e. Mesquite Long Drive Championship) and from auto races (i.e. Laughlin Desert Challenge Off Road Race, NHRA Drag Races) to music events (i.e. Las Vegas City of Lights Jazz Festival). In FY07, special events sponsored directly by the LVCVA were transferred into this section from the community support/grants section. 69 GRANTS & OTHER FY 2010 EXPENDITURES Collection Allocation 94% Grants & Other 6% COMPARISON OF ACTUAL TO BUDGET FY 06 - FY 07 - FY 08 - FY 09 - FY 10 (as of 11/30/08) Millions 25 20 15 10 5 0 Collection Allocation Actual FY 06 Revised FY 09 Actual FY 07 Proposed FY 10 Grants Actual FY 08 70 GRANTS & OTHER BUDGET ANALYSIS There have never been any positions or capital outlay budgeted for this section. Collection allocation increases and decreases proportionally with room taxes, as it is based on a percentage of the amount of room taxes and gaming fees collected. Due to economic conditions, funding for the grant programs has been significantly reduced. The only grant being budgeted is a contractual grant to the City of Henderson. Reserve for contingency contains funding not only for contingencies but also to fund payroll related items: new positions, authorized but unfilled positions, retirements, education benefits and self-funded insurance premiums. Due to a hiring freeze, the funding for unfilled positions has been eliminated. However, limited funding for retirements, education and insurance premiums is still included. EXPENDITURES ACTUAL BY CATEGORY AND FY 08 OTHER FINANCING SOURCES 22,258,498 Collection Allocation 4,414,700 Grants 245,660 Other 26,918,858 63,552,563 Other Financing Uses Reserve for Contingency 90,471,421 REVISED BUDGET FY 09 17,995,000 2,345,000 40,000 20,380,000 58,808,484 100,000 79,288,484 PROPOSED BUDGET FY 10 17,895,000 1,050,000 30,000 18,975,000 35,787,965 675,000 55,437,965 ACTUAL FY 06 20,205,044 4,226,444 3,774 24,435,262 78,214,569 102,649,831 ACTUAL FY 07 21,520,541 3,351,915 746 24,873,202 58,829,289 83,702,491 % CHANGE (0.6%) (55.2%) (25.0%) (6.9%) (39.1%) 575.0% (30.1%) GRANTS & OTHER Historically, the LVCVA has always supported the community through recreational and promotional grants. Presently, 10% of the total room taxes and gaming fees collected are returned to the county and the cities. The division of this collection allocation is set forth in an agreement between the various entities and may be designated by the individual entities for any purpose. The distribution to the county and its incorporated cities is mainly based upon the governor-certified population figures as prepared by the state demographer. The newly adopted agreement maintained the reimbursement allocation up to the level as paid in FY 2007 (“Baseline”). Reimbursement above the baseline will be paid to the entity that collected the increase. The reimbursement formula will be phased in over the next five years. Grant programs are discretionary in nature and due to declining revenue there is no funding in FY 2010. Recreation grant funds are intended exclusively to develop, improve and enhance the recreational facilities within Clark County and the incorporated cities within. Funds awarded under the Tourism Destination and Event Grant Program are to be used to develop, promote and increase tourism to and within Clark County, Nevada. Eligible entities include Clark County, the incorporated cities within and the non-profit chambers of commerce, including those that represent nationalities, ethnicities and cultures in Clark County. Projects eligible for funding include special event staging and promotional materials. Reserve for contingency contains funding for payroll suspense, retirements, education benefits, self insurance premiums and contingency. Payroll suspense is used to fund new positions and unfilled authorized positions. If any new positions are requested, they are discussed in the personnel allocation section and included in the full-time personnel count in each division’s proposed budget. If approved, funds are transferred to the divisions’ salary and benefits accounts semi-annually. “Other Financing Uses” is comprised of operating transfers out which represents appropriations for capital outlay and debt service as discussed in the following capital fund and debt service fund sections. 71 SPECIAL REVENUE FUND The LVCVA has one special revenue fund – for Vegas Uncork’d. A special revenue fund (SRF) is a governmental fund type used to account for monies received from specific revenue sources and restricted to expenditures for specific programs. This fund is used to account for all revenues and expenditures relating to this annual event. Vegas Uncork’d held its inaugural event in May 2007 as a partnership between the LVCVA and Bon Appetit magazine with the goal of promoting and adding credibility to Las Vegas’ culinary scene. The event is a platform for Las Vegas resort partners to showcase their restaurants, celebrity chefs, nightclubs and property amenities. In collaboration with hotel partners, the event is positioned to target the “diehard foodies”. This four day event takes place over Mother’s Day weekend in May. A primary goal of the event is to generate earned media through public relations and media coverage in the restaurant and cooking-oriented media channels. The target is to sell between 4,500-5,000 tickets resulting in non-gaming economic impact of $3.2 to $3.5 million. REVISED FY 2009 BUDGET Revenues Ticket Revenue Property Contribution Sponsorship Revenue Miscellaneous Total Revenues Other Financing Sources Total Revenue and Other Financing Sources Expenditures Culinary Pro-Am Grand Tasting General Production Individual Event Support Marketing Support Media Miscellaneous Public Relations Sponsorship Fees Ticket Commission/Processing Fees Total Expenditures Operating Transfers Out Total Expenditures and Other Financing Uses Revs Over (Under) Exps Fund Balance, Beginning Fund Balance, Ending PROPOSED FY 2010 BUDGET 350,000 350,000 700,000 1,400,000 800,000 2,200,000 49,000 177,000 280,000 250,000 275,000 750,000 130,000 60,000 75,000 52,500 2,098,500 2,098,500 101,500 3,000 104,500 % INCREASE FY10/09 15% 8% 27% -100% 18% 0% 11% 0% 18% 4% 18% -22% 0% 40% 20% 21% 100% 6% 0% 6% 3283% 100% 3383% BUDGET ANALYSIS Although this event is in its third year of existence, FY 2009 is the first year that the Las Vegas Convention and Visitors Authority had the lead production responsibility and ownership of the event. Revenue is anticipated to increase 18% overall for the FY 2010 event. The main reasons are a projected increase in attendance as the event matures and a focus on garnering more corporate sponsorships. Expenses are projected to rise 6% overall. This is attributable to the increase in expenditures relating to the grand tasting event, individual event support and public relations. As the avenues of ticket purchasing are made available, the additional cost of ticket commission and processing fees is also incurred. 305,000 325,000 550,000 10,000 1,190,000 800,000 1,990,000 49,000 150,000 269,000 211,000 353,000 750,000 93,000 50,000 62,000 1,987,000 1,987,000 3,000 3,000 72 CAPITAL PROJECTS FUNDS SUMMARY The capital projects funds are used to account for the acquisition of capital assets and the construction of new facilities or improvements. For FY 10, the LVCVA will have three active capital project funds: Capital Improvement and Replacement Fund, the Master Plan Enhancement Program Fund and Nevada Department of Transportation Fund. Each of these funds is discussed on the following pages. The schedule below includes all capital project funds. REVISED ACTUAL FY 07 REVENUES: Interest M iscellaneous Contracted Reserve $ 2,119,476 150,427 31,000,000 33,269,903 $ 4,134,425 343,073 655,834 115,000,000 911,342 121,044,674 $ 2,775,000 1,000 281,455,000 284,231,000 $ 2,025,000 1,000 274,000,000 276,026,000 (27%) 0% 0% (3%) 0% (3%) ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY 10 % CHANGE Proceeds from Debt Issuance Bond Premium Total Revenues EXPENDITURES: Aramark Capital Expenditures Leasehold Improvements Land & Improvements Buildings Capital Improvement Program Construction in Progress Furniture & Equipment General Government M arketing Operations Debt Issuance Costs Total Expenditures 1,468 6,203,419 1,097,986 16,370 20,710,412 38,957 188,252 2,536,075 397,941 31,190,881 655,834 24,524 51,874,233 1,194,567 1,116,966 56,309,316 26,809 21,756 2,237,767 1,043,215 114,504,987 23,600 1,290,300 1,273,400 10,412,252 336,618,878 29,417 7,750 1,200,738 1,130,000 351,986,335 30,000 385,000 1,756,000 2,730,000 268,900,000 * 9,500 324,300 274,134,800 0% 27% (70%) 38% (74%) (20%) (100%) 23% (73%) (100%) (22%) Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In Operating Transfers Out Total Other Financing Source (Uses) 31,196,127 23,990,850 6,905,305 (750,000) (111%) 33,000,000 (1,803,873) 27,374,200 (3,383,350) 8,405,305 (1,500,000) (750,000) (100%) (50%) 2,079,023 6,539,687 (67,755,335) 1,891,200 (103%) EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES FUND BALANCE, BEGINNING FUND BALANCE, 51,329,867 84,605,016 115,135,553 54,285,523 (53%) 33,275,149 30,530,537 (60,850,030) 1,141,200 (102%) ENDING $ 84,605,016 $ 115,135,553 $ 54,285,523 $ 55,426,723 2% * In FY 2010, comprised of projects from the Master Plan Enhancement Program and Nevada Department of Transportation Funds. 73 CAPITAL IMPROVEMENT AND REPLACEMENT FUND The Capital Improvement and Replacement Fund is used to account for capital expenditures for furniture, equipment, construction work-in-progress, land, buildings, and improvements to land, buildings and leaseholds. In FY 2002, capital assets became depreciable per GASB Statement 34’s “Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments.” This means that the LVCVA allocates the cost of tangible property over a period of time, rather than expensing the entire cost in one year. Generally, at the end of an asset’s useful life, the net value of the asset (original cost less accumulated depreciation) will equal the salvage value of the asset. The requirement for maintaining controls over fixed assets is found in the Nevada Revised Statutes and Nevada Administrative Code. The latter spells out the following inventory guidelines: (1) The governing body of every local government shall take an inventory at least once every two years of all its equipment and other personal property that constitute fixed assets. (2) Each item of property subject to the inventory must be assigned an identifying number and be labeled as belonging to the local government. CAPITALIZATION THRESHOLD Nevada Administrative Code 354.750 sets guidelines for the establishment of capitalization thresholds by resolution. This same code requires that every local government perform an inventory every two years. The LVCVA established a three-level system for determining the cost at which items should be classified as a capital asset. Each of these categories assumes the following: the item is generally tangible in nature (computer software is the major exception); the item has a useful life greater than one year; the item is not a repair part or supply item; and the original cost is greater than the capitalization threshold. High Risk: $500 – An item meeting two or more of the following criteria: easily convertible to personal use or cash; easily removed from LVCVA property without detection; or not assigned to any individual. Examples: computers, tools, cameras, vacuums. Low Risk: $3,000 - An item meeting two or more of the following criteria: specialized equipment not easily convertible to personal use or cash; not easily removed from LVCVA property without detection; or under departmental inventory control. Examples: trucks, carts, permanent sound equipment. No Risk: $20,000 – Defined as those assets that are not moveable. No risk assets would include land and buildings. Bulk Inventory Assets: Exceptions to the capitalization threshold are made for bulk inventory purchases. Typical bulk purchases include tables and chairs, podiums, barricades, trash receptacles and amplifiers. While individually costing less than $500, these items will be combined and capitalized as a group of assets. BUDGET PROCESS Planning for capital acquisitions is a continuous process throughout the year. Individual employees originate proposals for acquiring new and replacement equipment and furniture. If the supervisor agrees with the proposal, it is added to the section’s capital requests. During the budget process, each organizational unit submits its requests to acquire equipment and furniture. These requests must be justified as replacements for existing items that have failed or become obsolete or as new acquisitions that will enhance and improve the efficiency and/or effectiveness of the LVCVA’s operations. All requests are reviewed and discussed during the executive budget review process. The acquisitions that survive this process are consolidated into the final budget. Some are moved to subsequent years for future consideration. 74 CAPITAL IMPROVEMENT AND REPLACEMENT FUND BUDGET PROCESS (continued) Factors that can influence an increase or decrease in the land and building improvement accounts are: As the Las Vegas Convention Center is expanded, the older parts of the facility are updated and modernized. Due to the number of shows and events using the exhibit halls and meeting rooms, projects must wait for an open time frame before proceeding. Implementation of segments of the long-term master plan. National and international events, such as economic downturns, can determine if capital improvement projects will be deferred until future years. The LVCVA uses the construction work–in-progress account to fund various on-site improvements that have been on the drawing board, in some cases for years. Capital land and building improvement project requests have a similar, although more involved, budget process. The capital improvement program is described on page 78. These expenditures are funded from current operations. IMPACT ON GENERAL FUND Capital projects can have an impact on the LVCVA’s operating budget in several ways. Costs impacted by acquiring or replacing equipment and constructing additional exhibit space include required personnel levels, maintenance expenses and utility charges. Some of the capital projects are multi-year programs, and the fiscal impact can be spread across many fiscal years. Building and land improvements are listed on pages 78-79. Included is a description of the project and any quantifiable impacts on the general fund. The majority of the furniture/fixtures and equipment purchases are for replacement due to damage, obsolescence or theft. When repairing damaged equipment is no longer cost-effective, it is replaced. However, depending on the type of equipment, many departments cannibalize damaged equipment for parts, thereby reducing repair costs. BUDGET ANALYSIS Capital projects and purchases are usually funded with a transfer to the Capital Improvement and Replacement Fund from the operating budget. However, there are no scheduled transfers for FY 2010 as reserves are adequate to fund capital requirements. The decrease in expenditures is due to fewer capital projects being funded. Due to current economic conditions only those necessary capital projects are being completed. Also, the Master Plan Enhancement Program has been postponed through the first quarter of calendar year 2010. The capital improvement program account is the LVCVA’s pay-as-you–go capital plan for funding expansion and land acquisition that is not related to the Master Plan Enhancement Program. In FY 2010 there are two projects totaling $2.7 million. A summarized capital building and land improvement listing is included. It is followed by a description of major projects and impacts on the general fund. A capital furniture and equipment listing by organizational unit is also featured. 75 CAPITAL IMPROVEMENT AND REPLACEMENT FUND CAPITAL IMPROVEMENT AND REPLACEMENT FUND REVISED ACTUAL FY 07 REVENUES: Interest Miscellaneous Contracted Reserve Total Revenues EXPENDITURES: Aramark Capital Expense Leasehold Improvements Land & Improvements Buildings Capital Improvement Program Construction in Progress Furniture & Equipment General Government Marketing Operations Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In Operating Transfers Out Total Other Financing Source (Uses) 31,196,127 23,990,850 6,905,305 (750,000) (111%) 33,000,000 (1,803,873) 27,374,200 (3,383,350) 8,405,305 (1,500,000) (750,000) (100%) (50%) (9,690,536) (15,918,137) (80,689,111) (4,483,800) (94%) 38,957 188,252 2,536,075 11,497,080 26,809 21,756 2,237,767 20,209,773 29,417 7,750 1,200,738 82,190,111 9,500 324,300 5,234,800 (100%) 23% (73%) (94%) 1,414,552 13,164,579 67,952,654 (100%) 16,370 1,116,966 10,412,252 1,468 6,203,419 1,097,986 655,834 24,524 1,766,971 1,194,567 23,600 1,290,300 1,273,400 30,000 385,000 1,756,000 2,730,000 (74%) 0% 27% (70%) 38% $ 1,803,873 2,671 1,806,544 $ 3,360,126 275,676 655,834 4,291,636 $ 1,500,000 1,000 1,501,000 $ 750,000 1,000 751,000 (50%) 0% 0% (50%) ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY 10 % CHANGE EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES FUND BALANCE, BEGINNING FUND BALANCE, 49,834,173 71,339,764 79,412,477 5,628,671 (93%) 21,505,591 8,072,713 (73,783,806) (5,233,800) (93%) ENDING $ 71,339,764 $ 79,412,477 $ 5,628,671 $ 394,871 (93%) 76 CAPITAL IMPROVEMENT AND REPLACEMENT FUND The summary below represents capital projects and purchases by organizational unit. A more detailed listing follows it. EXPENDITURE SUMMARY IMPROVEMENTS Building Improvements Land and Land Improvements Capital Improvement Program Leasehold Improvements FURNITURE /FIXTURES & EQUIPMENT Marketing Visitor Information Centers Operations Facilities Client Services – LVCC Engineering – LVCC Physical Security Traffic Information Technology $1,756,000 385,000 2,730,000 30,000 9,500 18,900 5,700 10,700 3,500 285,500 $5,234,800 Project numbers listed on the following three pages encompass a range of projects from FY 2006 to FY 2009. This includes projects that have expenses in prior years but also funding in the new budget year as well as projects which have been canceled in prior years and received funding in the new budget year. This flow from year to year allows us to better track the entire cost of a project. 77 CAPITAL IMPROVEMENT AND REPLACEMENT FUND CONVENTION CENTER BUILDING IMPROVEMENTS Building improvements include such projects as additions, expansions or renovations to current buildings, and upgrades or replacements of equipment attached to the buildings. Projects numbers flow from year to year which allows us better tracking of the entire cost of a project. BUDGET FY 2010 $270,000 500,000 40,000 215,000 24,000 28,500 $1,077,500 00000.10.001 00000.10.002 00000.10.003 00000.08.014 00000.10.004 00000.10.005 Air Wall Repair/Replacement (North Hall) Building Enhancements Exhaust Fan Replacement (Kitchen) Expansion Joint Replacement (South Hall 3 and 4) Replace Boiler Pump #1 VFD Variable Frequency Drive Installation (Air Handler 83 & 56) LAND IMPROVEMENTS Land improvements are defined as land attachments of a permanent nature, other than buildings and include such items as roads, bridges, tunnels, walks, parking lots, etc. BUDGET FY 2010 $385,000 $385,000 00000.08.074 Orange Lot Block Wall MAJOR PROJECTS FOR FY 2010 AIR WALL REPLACEMENT (NORTH HALL) – The air walls in North Hall 1 and 2 have sustained substantial damage over the past three years. Repairs are impossible on a number of the panels and must be replaced. The walls are original to the North Hall; built in 1997. EXPANSION JOINTS (SOUTH HALL) – Expansion joints sustain constant damage from show move-in and move-out. Joints should be replaced with heavier units, properly installed in floor to eliminate the problems. Damage to ramp and hall expansion joints has increased due to improper installation from original construction. ORANGE LOT BLOCK WALL – Enhancements to the orange lot have taken place during FY08 and FY09. The lot, on the corner of Joe W. Brown and Desert Inn Road, is a staging/parking area for Convention Center contractors. Without proper security the area is susceptible to theft and vandalism. A wall around the lot will provide that security. BUILDING ENHANCEMENTS – Given the small window of opportunity to begin projects between major shows, this project line item is used to fund the beginning of projects that may be completed in subsequent years. IMPACT ON OPERATING BUDGET The various building improvements are anticipated to reduce repair and maintenance costs and increase energy efficiency. However, none of these projects are expected to increase general fund expenditures, such as personnel. Expansion Joints (South Hall) – Replacement will reduce the number of man-hours used to repair constant damage. 78 CAPITAL IMPROVEMENT AND REPLACEMENT FUND CASHMAN CENTER BUILDING IMPROVEMENTS Building improvements include such projects as additions, expansions or renovations to current buildings, and upgrades or replacements of equipment attached to the buildings. BUDGET FY 2010 $50,000 628,500 $678,500 00000.10.006 00000.08.039 Kitchen remodel Central Plant Chillers MAJOR PROJECTS FOR FY 2010 CENTRAL PLANT CHILLERS – New chillers are environmentally friendly, more reliable, and more energy efficient. IMPACT ON OPERATING BUDGET The various building improvements are anticipated to reduce repair and maintenance costs and increase energy efficiency. However, none of these projects are expected to increase general fund expenditures, such as personnel. Replace Central Plant Chillers – Energy efficiency and saving on utility cost is an obvious reward in replacing this outdated system. CAPITAL IMPROVEMENT PROGRAM Projects under the Capital Improvement Program are generally grand in scope; with a cost over a million dollars. Such projects may take multiple years to complete and/or add significant value to the efficiency or effectiveness of the facility. BUDGET FY 2010 $2,595,000 135,000 $2,730,000 00000.10.008 00000.09.010 Fire Sprinkler Upgrade (Phase 2) Sewer Line Replacement (Central Hall 3) MAJOR PROJECTS FOR FY 2010 The various building improvements are anticipated to reduce repair and maintenance costs and increase energy efficiency. However, none of these projects are expected to increase general fund expenditures, such as personnel. FIRE SPRINKLER UPGRADE (PHASE 2) – Phase 1 was started in FY05 and included zones in the North and Central Halls. Phase 2 will continue with the balance of these halls. The system needs to be upgraded in order to provide density coverage of .03 gpm, an insurance and Clark County Fire Department requirement. 79 CAPITAL IMPROVEMENT AND REPLACEMENT FUND LEASEHOLD IMPROVEMENTS A lease is a contractual understanding between a lessor and a lessee that grants the lessee the right to use specific property, owned by the lessor for a specific period of time in return for stipulated, and generally periodic, cash payments. Long-term leases such as those that involve office space ordinarily provide that any improvements made to the leased property revert to the lessor at the end of the life of the lease. BUDGET FY 2010 $30,000 $30,000 00000.10.007 Office Renovation (Washington, DC Office) CAPITAL FURNITURE AND EQUIPMENT LISTING Departmental Furniture & Equipment FURNITURE/ FIXTURE GENERAL GOVERNMENT MARKETING MARKETING SERVICES PRIMM VISITORS INFORMATION CENTER 34230.10.001 34230.09.001 34230.09.002 OPERATIONS INFORMATION TECHNOLOGY 21000.10.001 21000.10.002 21000.10.003 21000.10.004 21000.08.011 21000.10.005 21000.10.006 21000.10.007 21000.10.008 Audit Automation Software Directional Signage Content E-mail Archiving Solution Upgrade Microsoft Software Assurance Agreement PC/Laptop Leasing Server Hardware Upgrades Software Licenses/Upgrades Spare Components Video Switcher $ 20,000 25,000 29,000 15,000 150,000 15,000 10,000 20,000 1,500 285,500 CLIENT SERVICES - LVCC 55020.10.001 55020.10.002 55020.10.003 55020.10.004 ENGINEERING 55041.10.001 PHYSICAL SECURITY 55058.10.001 55058.10.002 TRAFFIC 55059.10.001 Parking Lot Exit Signs 3,500 3,500 Emergency Signage Identification Card Printer (Color) 3,400 7,300 10,700 Lithonia Lighting Upgrade 5,700 5,700 Carpet Extraction Tool Sanitech Steam Cleaning System Upright Vacuums (6) Water Coolers 7,600 5,600 3,000 2,700 18,900 Security Surveillance Video System Meeting Table & Chairs Shelving & Brochure Rack $ 2,500 2,000 5,000 9,500 EQUIPMENT 80 MASTER PLAN ENHANCEMENT PROGRAM FUND In February 2006, the LVCVA was given board approval in the amount of $737 million for the enhancement of the Las Vegas Convention Center. In May 2007 the board approved an increase of $153 million. The enhancement includes construction of a Las Vegas Metropolitan Police (LVMPD) substation and connecting the existing buildings, adding meeting rooms, and upgrading building and technology systems at the LVCC. The LVCVA will not incur any personnel and operating expenditures related to the operations of the LVMPD substation. The LVCVA’s contribution was the construction of the facility. The Master Plan Enhancement Program (MPEP) fund is used to account for the proceeds of the commercial paper issue and all construction related costs. The funding of the plan includes the usage of $68 million in cash reserves and the debt issuance of $822 million via the issuance of commercial paper. Construction began in late 2007 on the Las Vegas Metropolitan Police Substation, it opened in October 2008. Due to current economic conditions and diminishing revenue streams the Master Plan Enhancement Program has been suspended through the first quarter of 2010. The only projects to be completed are those that are already in progress such as the utility line relocations and data command center. The construction budget for FY 2010 is as follows: REVISED ACTUAL FY 07 REVENUES: Interest Other Proceeds from Debt Total Revenues EXPENDITURES: Debt Issuance Construction in Progress Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures FUND BALANCE, BEGINNING FUND BALANCE, 11,689,216 34,081,852 34,581,852 1% 11,689,216 22,392,636 500,000 (4,650,000) (1,030%) 397,941 19,295,860 19,693,801 48,471 43,144,737 43,193,208 500,000 255,000,000 255,500,000 4,900,000 4,900,000 (100%) (98%) (98%) $ 235,261 147,757 31,000,000 31,383,017 $ 518,447 67,397 65,000,000 65,585,844 $ 1,000,000 255,000,000 256,000,000 $ 250,000 250,000 (75%) 0% (100%) (100%) ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY 10 % CHANGE ENDING $ 11,689,216 $ 34,081,852 $ 34,581,852 $ 29,931,852 0% 81 EXTRAORDINARY MAINTENANCE, REPAIR OR IMPROVEMENT FUND Originally, Nevada Revised Statute 354.6105 required that local governments establish a fund for the extraordinary maintenance, repair or improvement of capital projects. The statute has since been amended and the fund is now a recommendation. Such expenditures are defined as expenses ordinarily incurred not more than once every five years to maintain a local governmental facility or capital project in a fit operating condition. Funding is to be 1/2 of 1% of the total amount of the bonds sold for each capital project. In FY 97, the LVCVA transferred the required funds relating to the 8/96 bond issue from the general fund in order to establish this fund. Additional funding was transferred for the 11/99 bond issue in FY 2000. All funds are anticipated to be spent on building improvements by June 30, 2009. REVISED ACTUAL FY 07 REVENUES: Interest OTHER FINANCING SOURCES (USES): Operating Transfer In Total Other Financing Sources (Uses) EXPENDITURES Construction in Progress OTHER FINANCING SOURCES (USES): Operating Transfer Out Total Other Financing Sources (Uses) $ $ $ 1,666,224 $ 80,342 $ 65,188 $ 25,000 ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY 10 $ % CHANGE (100%) - 0% 0% $ - 100% - 0% 0% EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES FUND BALANCE, BEGINNING FUND BALANCE, 1,495,694 1,576,036 1,641,224 (100%) 80,342 65,188 (1,641,224) (100%) ENDING $ 1,576,036 $ 1,641,224 $ - $ - 0% 82 LAND ACQUISITION FUND This fund was established and expenses incurred during FY 2008. This fund accounts for the expenditures used to purchase the 8.44 acre site where the Blue Harbor Apartment complex stood. The issuance of these revenue bonds is accounted for in the debt service section. REVISED ACTUAL FY 07 REVENUES: Interest Other Proceeds from Debt Bond Premium Total Revenues EXPENDITURES: Debt Issuance Construction in Progress Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures FUND BALANCE, BEGINNING FUND BALANCE, 994,744 50,107,262 51,102,006 $ $ 190,664 50,000,000 911,342 51,102,006 $ BUDGET FY 08 PROPOSED BUDGET FY 09 $ PROPOSED BUDGET FY 10 % CHANGE 0% 0% 0% 0% 0% - - 0% 0% 0% - - 0% - - 0% ENDING $ - $ - $ - $ - 0% 83 NEVADA DEPARTMENT OF TRANSPORTATION FUND As authorized by Nevada Revised Statute 244A.637, the LVCVA will issue bonds to provide funding to the Nevada Department of Transportation (NDOT) for road projects along Interstate 15. A legislative mandate requires the LVCVA to contribute the lesser of $20,000,000 a year for a period of 30 years for debt service or a total of $300,000,000 in principal to the NDOT for projects in Clark County. This fund accounts for the expenditures of funds to the Nevada Department of Transportation. The principal and interest on outstanding debt is accounted for in the debt service section. REVISED ACTUAL FY 07 REVENUES: Interest Other Proceeds from Debt Bond Premium Total Revenues EXPENDITURES: Debt Issuance Construction in Progress Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures FUND BALANCE, BEGINNING FUND BALANCE, $ $ $ BUDGET FY 08 PROPOSED BUDGET FY 09 250,000 26,455,000 26,705,000 $ PROPOSED BUDGET FY 10 1,025,000 274,000,000 275,025,000 % CHANGE 310% 936% 0% 0% 930% 630,000 12,000,000 12,630,000 264,000,000 264,000,000 (100%) 2,100% 1,990% 14,075,000 11,025,000 (22%) - 14,075,000 100% ENDING $ - $ - $ 14,075,000 $ 25,100,000 78% In July 2008, the first project that commercial paper was issued for was Interstate-15 Express Lane Project. 84 FIVE-YEAR CAPITAL IMPROVEMENT PLAN A capital improvement plan (CIP) is a financial planning and management tool that lists proposed capital projects and capital acquisitions for a rolling five-year period. This multi-year document identifies and prioritizes the need for the improvements and acquisitions and coordinates their funding and optimal time frames for completion. It is also a process that provides order and continuity to the repair, replacement, construction or expansion of the LVCVA’s facilities. The LVCVA prepared a five-year capital improvement plan for fiscal years 2010 – 2014. It includes not only all planned capital acquisitions or projects expected to cost $20,000 or more in one fiscal year, but also multi-year equipment replacements and additions regardless of estimated individual cost. Projects and equipment estimated to be less than $20,000 are included in the capital project and equipment listing on pages 78-80. The first year projects (FY 2009) operating impacts have already been discussed on pages 78-79. If there are any impacts on the operating budgets for FY 2011 – 2014, they will be noted below the project name. Nevada Revised Statute 350.013 requires that capital improvement plans be submitted to the Nevada State Department of Taxation and the County Clerk with the entity’s Debt Management Policy and Indebtedness Report on August 1. BUDGET PROCESS In conjunction with the review and update of departmental objectives and preparation of the departmental annual budget, each department is required to identify and submit individual capital project requests to their respective senior vice president. Departments are urged to carefully assess their equipment necessities and planned improvement programs to determine the full five-year needs in an effort to encourage long-range planning instead of short-term, stop-gap, or “emergency” repairs or rehabilitation work. For each project/acquisition, the submitter must provide a description, justification, documentation, and amount of funding that is expected to be needed. In addition, any effects that the project will have on future annual operating budgets must be identified and quantified if possible. Based on the individual project details, summaries of capital funding needs over the next five years can be prepared and sources of funding identified. The Finance Department then compiles a preliminary listing of capital projects and acquisitions for the executive review process. It is during this review process that project recommendations are accepted, deferred to later years, or changed either in time frame or funding. Year one of the plan (budget year) is submitted to the Board of Directors for their acceptance and approval in the operating budget. Any projects or purchases that may have an impact on the operating budget will be footnoted and quantified if possible. A more detailed five-year capital improvement plan is published as a separate document. 85 FIVE-YEAR CAPITAL IMPROVEMENT PLAN FY 10 FY 11 FY 12 FY 13 FY 14 CONVENTION CENTER Land Improvements Orange Lot Block Wall Fertilizer Bypass Valves Replacement Grand Plaza Oak Tree Planters Tree Removal (Cherry/Olive) Underground Water Valve Replacement Monorail Walkway Strucutures Joe W. Brown Landscaping/Fencing Blue Lot South Light Pole Replacement Silver Lot 2 Landscaping Replace Concrete Walkways Gold Lot Seal Coat Orange Lot Renovation $ 385,000 $ 3,800 4,000 8,500 43,000 100,000 460,000 5,300 24,500 100,000 160,000 298,000 2,595,000 3,000,000 50,000 845,000 855,000 2,500,000 2,500,000 500,000 3,000,000 334,000 1,000,000 1,000,000 4,200,000 5,000,000 1,000,000 500,000 3,600,000 5,000,000 $ 5,000,000 $ 100,000 $ 2,500 Capital Improvement Program LVCC Fire Sprinkler System Retrofit Project Phase 2 Northeast Meeting Rooms Outer Stairs 820 Desert Inn Road (Turn Lane & Paving) 536 Sierra Vista Lot Improvements Lithonia Lighting (North/Central Halls) FF&E - Public Areas Data Telecom Cabling (North Halls) Gold Lot Enhancements Art Allowance Exhibit Hall Concrete Replacement (C-2) Restroom Renovation - South Hall Building Improvements Master Plan Enhancement (PM/CM, Architect, Insurance, Permits, Regulatory Allowances) (A) 14,216,464 4,900,000 39,355,802 33,368,140 22,810,481 Central Hall Restrooms, Data Center and Freight Door (A) Desert Inn Meeting Rooms (A) (A) (A) 143,842,117 211,864,057 74,477,092 75,752,456 31,260,834 13,970,476 Grand Concourse/Silver Lots (A) 50,593,641 2,470,323 5,376,217 (A) North Lobby & Meeting Room Renovation Gas & Power Relocation Campus Wide Technology Packages Campus Wide Fire Alarm Systems Campus Wide Signs & Graphics (A) (A) 2,448,804 199,342 133,951 11,049,747 554,744 1,531,751 6,156,276 412,875 1,690,031 Replace Boiler Pump #1 VFD 83&56) Replace Kitchen Exhaust Fans Sewer Line Replacement (C-3) Expansion Joint Replacement (S-3/4) Air Wall Repair/Replacement (North Hall) Building Enhancements Call Center Renovation 24,000 28,500 40,000 135,000 215,000 270,000 500,000 10,500 2,500,000 86 FIVE-YEAR CAPITAL IMPROVEMENT PLAN FY 10 FY 11 FY 12 FY 13 FY 14 CONVENTION CENTER Building Improvements (continued) Air Conditioning Unit (Communications) Construct Wall in Halls C3 to C4.1 Awnings & Power Receptacles Air Conditioning Unit (Carpenter Shop) Rebuild Columns in C-1 Hall Column Retrofit (Sprinkler Connection) Albany 3000 Rapid Roll Doors Vertical Metal Gray Siding Repair Overhead Door Replacement (C-2) Grand Concourse Signage (East Entrance) Grand Concourse Lighting (East Entrance) Grand Concourse Canopy (East Entrance) 3333 Cambridge $ 31,000 75,000 $ 17,200 28,000 30,000 95,000 150,000 150,000 175,000 $ 8,000 10,000 50,000 80,000 $ (B) $ 73,000 Furniture & Equipment Capital Computer Miscellaneous Equipment 285,500 48,300 500,000 250,000 500,000 250,000 750,000 250,000 750,000 250,000 Barricades (150) Forklift Carpet Extractor Stair Sets & Skirting Chevrolet Truck Handheld Radios (51) Chairs Tables Scrubber 27,000 14,000 16,500 43,000 31,000 220,000 72,800 89,000 28,200 58,000 30,000 75,000 198,000 54,900 39,000 35,100 71,000 138,000 CASHMAN CENTER Land Improvements Landscape Curbing Fire Suppression System for Berm Water Main Line Replacement Scoreboard Backlighting Parking Lot C Reseal Baseball Field Renovation Block Wall Repair Grounds Storage Replace Readerboards Theatre Plaza Remodel Replace Concrete Walkways and Curbing 8,500 20,000 54,000 88,000 235,000 1,500,000 55,000 64,500 500,000 50,000 34,000 50,000 628,500 10,000 25,000 42,000 60,000 150,000 550,000 75,000 Building Improvements Cashman Kitchen Remodel Central Plant Chillers Wash Rack Covers Automated Logic Installation Floor Tile Replacement (Tunnel Hallway) Call Center Carpet Replacement 87 FIVE-YEAR CAPITAL IMPROVEMENT PLAN FY 10 FY 11 FY 12 FY 13 FY 14 CASHMAN CENTER Building Improvements (continued) Stadium Speaker Replacement Freight Door Repair Stadium Concrete Repair Boiler Replacement Stadium Ticket Office Remodel Hydraulic Stage Lift Compactor Room Remodel Wayfinding Signage Installation Perimeter Door Replacement Speaker Replacement - Exhibit Halls Lithonia Lighting System Installation Meeting Room Folding Wall Replacement Exhibit/Meeting Room Restroom Remodel Transformer Purchase Roof Replacement Secondary Water Supply Installation Restroom Sink Replacement (Theater) Cart Storage Area Meeting Room Carpet Replacement $60,000 70,000 180,000 408,500 10,000 15,000 35,000 50,000 100,000 120,000 145,000 400,000 50,000 66,000 100,000 412,700 10,000 15,000 400,000 16,000 20,000 27,000 (B) $205,000 $200,000 $ 150,000 375,000 350,000 3,500,000 Furniture & Equipment Electric Carts Light Towers (2) Forklift Miscellaneous Equipment 21,000 75,000 7,000 20,000 7,000 8,500 27,500 Sweeper Tables Barricades (150) Chevrolet Truck Gas Carts Scrubber Carpet Extractor Turnstiles 35,000 65,000 88,000 28,000 28,000 36,000 40,000 75,000 35,000 20,000 30,000 26,000 15,000 REGIONAL OFFICE Leasehold Improvements Washington Sales Office Renovation $30,000 TOTAL – FIVE YEAR CAPITAL PLAN $10,134,800 $17,200,600 $137,498,644 $491,101,448 $158,849,929 (A) Funded by commercial paper - projects total $180M; projected CP draws are $255M (B) Miscellaneous Equipment - anything less than $10K has been combined for ease of reporting - see published Capital Improvement Plan document for full detail descriptions/and in FY10 project list. 88 DEBT SERVICE FUNDS SUMMARY Three of the LVCVA’s outstanding debt obligations are general obligation bonds of Clark County, acting by and through the LVCVA. There is one proposed general obligation bond issuance pending for January 2010. They are primarily secured by ad valorem taxes and are additionally secured by net pledged revenues of the LVCVA, represented basically by room taxes. The LVCVA has never resorted to the use of property taxes for debt service, using only net pledged revenues derived from operations. In fact, no ad valorem property tax revenues are allocated to the LVCVA for any purpose. No change in this practice is contemplated. Three of LVCVA’s obligations are LVCVA revenue bonds, which are secured by room taxes and the facilities revenue generated by the LVCVA. The other obligation is commercial paper. The LVCVA’s Board of Directors approved an $822,000,000 debt issuance, which will initially be issued via commercial paper. The purpose of the debt issue is for construction of enhancements (i.e. improving connectivity between the various halls, upgrade building and technology systems) to the existing Las Vegas Convention Center complete with a police substation, and a fire station. The issuance began in FY 2007 and will continue until the end of the program. The LVCVA issued $16 million in Commercial Paper during FY 2007, and $80 million in FY 2008, however there is no commercial paper issuance contemplated in FY 2010 due to the suspension of the MPEP program. The timing and specific amounts of individual issues have not yet been determined. As authorized by Nevada Revised Statute 244A.637 the LVCVA will issue bonds to provide funding for the Nevada Department of Transportation (NDOT). A legislative mandate requires the LVCVA to contribute the lesser of $20,000,000 a year for a period of 30 years for debt service or a total of $300,000,000 in principal to the NDOT for projects in Clark County. The initial issuance of $26,455,000 was completed in August 2008. The remaining balance of $273,545,000 is anticipated to be issued in February 2010. Including the new issuance, the LVCVA will have seven outstanding bond issues, and one outstanding commercial paper issue. Original Issue 36,200,000 150,000,000 118,745,000 38,200,000 50,000,000 26,455,000 273,545,000 822,000,000 SemiAnnual Interest 4.7 - 5.1% 4.8 – 6% 3.0-5.25% 4.0-5.5% 4.0-6.0% 4.0-5.0”% Unknown Variable Final Maturity FY 2027 FY 2013 FY 2020 FY 2022 FY 2038 FY 2038 Unknown Variable Outstanding Principal at 6/30/09 24,955,000 31,725,000 116,960,000 36,400,000 49,330,000 26,455,000 To be issued 96,000,000 Obligation Name and Type 4/1/98 Refunding Bonds (G.O.) 11/99 Building Bonds (Revenue) 3/05 Refunding Bonds (Revenue) 05/07 Refunding Bonds (G.O) 10/07 Land (Revenue) 08/08 NDOT (G.O) 01/10 NDOT (Proposed G.O) Commercial Paper** **See explanation of commercial paper above. Quarterly transfers from the general fund are made to fund interest payments due on January 1 and principal and interest due on July 1. These funds are invested in the interim, and interest earned on the investments is transferred back to the general fund. The budgeted ending fund balances of the debt service funds are sufficient to pay principal and interest due on the first day (July 1) of the next fiscal year. However, the commercial paper interest payments are variable and subjective to maturity date. The funds are invested in the interim. BOND ISSUE PROCESS As a governmental entity, the LVCVA must follow Nevada Revised Statute 350.013. This statute requires filing several reports with the Debt Management Commission prior to August 1 of each year regardless if new debt is being contemplated or not. These reports include a complete statement of current general obligation debt and a report of current debt and retirement schedules, a complete statement of general obligation debt contemplated, the entity’s debt management policy, and a five-year capital improvement plan. 89 DEBT SERVICE FUNDS SUMMARY The debt management policy must contain the following discussions: A discussion of ability to afford existing general obligation debt, authorized future general obligation debt and proposed future general obligation debt; A discussion of capacity to incur authorized and proposed future general obligation debt without exceeding the applicable debt limit; A discussion of general obligation debt that is payable from property taxes per capita as compared with such debt of other municipalities in this state; A discussion of general obligation debt that is payable from property taxes as a percentage of assessed valuation of all taxable property within the boundaries of the municipality; Policy regarding the manner in which the municipality expects to sell the debt; A discussion of sources of money projected to be available to pay existing general obligation debt, authorized future general obligation debt and proposed future general obligation debt; and A discussion of its operational costs and revenue sources, for the ensuing five fiscal years, associated with each project included in its plan for capital improvement. 90 DEBT SERVICE FUNDS SUMMARY TOTAL DEBT SERVICE FUNDS REVISED ACTUAL FY 07 REVENUES: Interest Bond Premium Total Revenues EXPENDITURES: Principal Interest Refunding Bond Escrow Bond Issuance Cost Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In Proceeds from Sale of Bonds Operating Transfers Out Total Other Financing Source (Uses) 63,364,386 35,353,392 48,914,179 34,577,840 (29%) 26,924,594 38,200,000 (1,760,208) 36,178,363 (824,971) 49,603,179 (689,000) 34,987,965 (410,125) (29%) 0% (40%) (62,795,282) (23,174,159) (34,446,136) (32,962,783) (4%) 11,050,000 13,341,084 40,796,517 323,813 65,511,413 11,605,000 12,384,130 10,000 23,999,130 13,340,000 21,795,136 35,135,136 13,580,000 19,792,908 33,372,908 2% (9%) 0% 0% (5%) $ 664,903 2,051,229 2,716,132 $ 824,971 824,971 $ 689,000 689,000 $ 410,125 410,125 (40%) 0% (40%) ACTUAL FY 08 BUDGET FY 09 PROPOSED BUDGET FY10 % CHANGE EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES FUND BALANCE, BEGINNING FUND BALANCE, ENDING $ 18,133,523 $ 30,312,756 $ 44,780,799 $ 46,395,856 48% 17,564,418 18,133,523 30,312,756 44,780,799 48% 569,105 12,179,233 14,468,043 1,615,057 (89%) 91 DEBT SERVICE FUNDS SUMMARY Since the LVCVA’s establishment in 1959, room taxes have provided sufficient funding for debt service with no effect on operations. The economic forecast does not indicate any reversal of this 48-year trend. Annual bonded debt service requirements (not including commercial paper issues) through the year 2040: FYE 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 6/30/2025 6/30/2026 6/30/2027 6/30/2028 6/30/2029 6/30/2030 6/30/2031 6/30/2032 6/30/2033 6/30/2034 6/30/2035 6/30/2036 6/30/2037 6/30/2038 6/30/2039 Principal (in $) 13,340,000 13,580,000 14,310,000 15,100,000 15,980,000 16,815,000 17,705,000 18,615,000 19,585,000 20,570,000 21,615,000 22,735,000 5,680,000 5,950,000 6,520,000 6,840,000 7,715,000 7,520,000 7,900,000 2,805,000 2,940,000 3,095,000 3,250,000 3,415,000 3,590,000 3,775,000 3,970,000 4,175,000 4,385,000 4,610,000 1,620,000 Interest (in $) 14,113,347 14,032,908 13,300,883 12,497,601 11,668,245 10,831,414 9,941,076 9,004,214 8,035,839 7,040,920 6,011,589 4,928,389 4,251,020 3,992,810 3,694,674 3,372,829 3,030,341 2,663,196 2,273,738 2,005,150 1,863,931 1,715,581 1,558,250 1,391,625 1,216,500 1,032,375 838,750 635,125 421,125 196,250 40,500 Total (in $) 27,453,347 27,612,908 27,610,883 27,597,601 27,648,245 27,646,414 27,646,076 27,619,214 27,620,839 27,610,920 27,626,589 27,663,389 9,931,020 9,942,810 10,214,674 10,212,829 10,205,341 10,183,196 10,173,738 4,810,150 4,803,931 4,810,581 4,808,250 4,806,625 4,806,500 4,807,375 4,808,750 4,810,125 4,806,125 4,806,250 1,660,500 The LVCVA’s bonds issued through Clark County are rated “AA+” by Standard and Poor’s and “Aa1” by Moody’s. LVCVA’s separate bond rating is “A+” issued by Standard and Poor’s and “Aa3” issued by Moody’s for the 11/99 and 3/05 bond issues and 11/07 bond issue is rated “AA+ by Standard and Poor’s and “Aa1” by Moody’s. 92 DEBT SERVICE FUNDS SUMMARY INDIVIDUAL FY 2010 DEBT SERVICE FUNDS 4/98 BOND FUND REVENUES: Interest Total Revenues EXPENDITURES: Principal Interest Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures $ 5,000 5,000 70,000 1,258,731 1,328,731 (1,323,731) $ 11/99 BOND FUND 71,000 71,000 9,990,000 1,526,050 11,516,050 (11,445,050) 11,806,325 (71,000) 11,735,325 2005 REFUNDING FUND $ 23,000 23,000 155,000 5,968,894 6,123,894 (6,100,894) 6,126,375 (23,000) 6,103,375 MASTER PLAN BOND FUND $ 226,000 226,000 5,760,000 5,760,000 (5,534,000) (226,000) (226,000) OTHER FINANCING SOURCES (USES): Operating Transfers In 1,331,981 Operating Transfers Out (5,000) Total Other Financing Source (Uses) 1,326,981 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES 3,250 FUND BALANCE, BEGINNING FUND BALANCE, ENDING $ 700,241 703,491 290,275 10,890,388 $ 11,180,663 $ 2,481 3,140,707 3,143,188 $ (5,760,000) 24,456,061 18,696,061 05/07 REFUNDING FUND REVENUES: Interest Total Revenues EXPENDITURES: Principal Interest Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES): Operating Transfers In Operating Transfers Out Total Other Financing Source (Uses) $ 20,000 20,000 2,060,000 1,666,563 3,726,563 (3,706,563) 3,780,363 (20,000) 3,760,363 11/07 LAND PURCHASE FUND $ 15,000 15,000 865,000 2,391,985 3,256,985 (3,241,985) 3,271,035 (15,000) 3,256,035 $ 08/08 NDOT FUND 7,000 7,000 440,000 1,220,685 1,660,685 (1,653,685) 1,671,885 (7,000) 1,664,885 $ 01/10 NDOT FUND 43,125 43,125 43,125 7,000,000 (43,125) 6,956,875 EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES 53,800 FUND BALANCE, BEGINNING FUND BALANCE, ENDING $ 2,913,881 2,967,681 $ 14,050 2,073,968 2,088,018 $ 11,200 605,554 616,754 $ 7,000,000 7,000,000 93 DEBT LIMITS AND CAPACITY DEBT CAPACITY CLARK COUNTY, NEVADA AS OF JUNE 30, 2008 Approximate Assessed Valuation (1) Bonded Debt Limit (2) Statutory Debt Limitation Less: Amount of Debt Applicable to Debt Limit Total General Obligation Indebtedness Available Las Vegas Convention & Visitors Authority $ 108,649,925,840 5% 5,432,496,292 73,775,000 (3) $ 5,358,721,292 Clark County $ 108,649,925,840 10% 10,864,992,584 1,132,450,000 (4) $ 9,732,542,584 (1) This is the net total assessed value for the secured and estimated unsecured property for Clark County, Nevada for FY 2008. It includes the assessed valuation of the redevelopment agencies. These values are included for purposes of calculating the debt limit but are not subject to County taxation for the retirement of general obligation bonded indebtedness. This valuation is used to determine the LVCVA’s debt margin since our debt is issued in the name of the County as described below. (2) State statute requires debt issued by the LVCVA to be issued in the name of the County. The LVCVA’s Board of Directors is empowered to issue general obligation bonds, which are secured by the full faith and credit of the County and are additionally secured by a pledge of revenues derived by the LVCVA. Nevada Revised Statute (NRS) 244A.653 states that the County may not become indebted in excess of 5 percent of the total last assessed valuation of taxable County property for the issuance of general obligation bonds designated for County recreational purposes. This requirement applies to the LVCVA. NRS 244A.059 limits the aggregate principal amount of the County’s general obligation debt to 10 percent of the County’s total reported assessed valuation. (3) The LVCVA’s Outstanding General Obligation indebtedness is comprised of the following general obligation bonds: Bond name 4/98 Refunding Bonds 5/07 Refunding Bonds 8/08 NDOT Bonds Principal Outstanding $24,955,000 36,400,000 23,455,000 $84,810,000 (4) Clark County’s Outstanding General Obligation Indebtedness includes general obligation bonds, general obligation revenue bonds, notes, and medium-term obligations. 94 DEBT SERVICE - BOND COVERAGE The LVCVA’s bonds constitute direct and general obligations of Clark County (except for the 11/99 and the 2005 Refunding Series bonds). They are additionally secured by a pledge of revenues consisting of gross revenues derived from the operation and use of facilities, plus room and gaming taxes (gross pledged revenues), less operating and maintenance expenses of the facilities and collection allocation. Gross pledged revenues also include interest income and miscellaneous fees and charges in the general fund. Operating and maintenance expenditures include general government, operations and collection allocation. Also included are those marketing expenditures related only to the sales effort of the Las Vegas Convention Center and Cashman Center (i.e. Destination Services, Registration Services, Call Center, Convention Services and Sales). GROSS PLEDGED REVENUES 169,111,399 160,456,123 168,352,694 193,181,748 224,770,552 253,172,521 269,118,610 281,918,943 240,545,400 240,925,800 OPERATING AND MAINTENANCE EXPENDITURES 55,663,691 57,726,592 60,312,786 64,156,519 70,377,960 72,285,528 79,106,745 83,851,743 83,523,265 79,089,600 NET PLEDGED REVENUES 113,447,708 102,729,531 108,039,908 129,025,229 154,392,592 180,886,993 190,011,865 198,067,200 157,022,135 161,836,200 DEBT SERVICE PRINCIPAL AND INTEREST 28,365,893 26,134,645 26,129,201 25,237,306 24,477,555 23,223,269 24,391,084 23,989,130 35,135,136 33,372,908 DEBT SERVICE COVERAGE 4.00x 3.93x 4.13x 5.11x 6.31x 7.79x 7.79x 8.26x 4.47x 4.85x FISCAL YEAR 2001 2002 2003 2004 2005 2006 2007 2008 2009(est) 2010 (bdgt) DEBT SERVICE AND NET PLEDGED REVENUES 2001 - 2008 ACTUAL 2009 - 2010 PROJECTED Millions 200 190 180 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 NET PLEDGED REVENUES DEBT SERVICE 2008 2009 (est) 2010 (bdgt) 95 DEBT SERVICE - HISTORICAL PERSPECTIVE Certain outstanding general obligation (limited tax) bonds have been defeased in prior years by placing the proceeds of new refunding bonds in irrevocable trusts to provide for all future debt service payments on the old bonds. These trust accounts and the related defeased bonds are not included in the LVCVA’s budget or financial statements. Information regarding the defeased bonds is provided below: DEFEASED AMOUNT OUTSTANDING AT 6/30/07 $23,430,000 117,775,000 TRUST ACCOUNT 98A Escrow 3/05 Escrow BOND ISSUE 8/1/96 11/99 The schedule below presents a historical record of all debt issued by the LVCVA since it was established, including those bonds defeased by advance refunding. The LVCVA’s Board of Directors has approved a resolution to refund bonds during the latter part of FY 2007 which will result in an estimated savings of $4.5 million over the next 15 years. As of the time of this budget being prepared, the amounts have not been finalized. ORIGINAL ISSUE AMOUNT 4,500,000 1,000,000 4,790,000 7,500,000 6,960,000 12,000,000 DATE ISSUED 1/15/57 12/15/58 7/15/63 1/15/71 7/1/73 5/1/75 INTEREST RATE 5% 4-4.25% 3.5% 4.5-5% 4.5-5.3% 7-8% DATE RETIRED/ PURPOSE Original construction of Convention Center $500,000 for construction; $500,000 for recreation grants Refund 1/15/57 and 12/15/58 bonds East Hall expansion - $6,500,000; stadium construction - $1 million Refund 1/15/71 bonds East Hall and kitchen expansion; warehouse and meeting rooms annex construction Refund 5/1/75 bonds Cashman Center construction Purchase land; expansion of East Hall and cafeteria; construction of pedestrian bridge; $2.5 million for recreation grants Refund 7/73, 8/76, 7/80 and 10/80 bonds Refund portion of 12/1/82 bonds Expansion of Convention Center Purchase land; refund a portion of 6/1/88 bonds Expansion of Convention Center & Cashman Center, refund 6/1/86 bonds Refund a portion of 8/1/93 and 9/1/96 bonds Grant to the University of Nevada Las Vegas for the purpose of improvements to the Thomas and Mack Center and Sam Boyd Stadium Expansion of Convention Center Refund 8/93 Bonds Refund a portion of the 11/99 bonds STATUS Refunded by 7/15/63 bonds Refunded by 7/15/63 bonds Retired Refunded by 7/1/73 bonds Refunded by 12/1/82 bonds Refunded by 8/31/76 bonds DEFEASED 1/15/77 1/15/68 7/15/73 1/15/82 1/1/85 8/31/76 8/31/76 7/1/80 10/1/80 12,225,000 22,000,000 20,000,000 6.2-6.3% 7-8.5% 9% Refunded by 12/1/82 bonds Refunded by 12/1/82 bonds Refunded by 12/1/82 bonds 12/1/82 12/1/82 12/1/82 12/1/82 6/1/86 6/1/88 8/1/93 9/1/96 52,825,000 38,240,000 35,000,000 80,530,000 97,425,000 7-10.9% 5.9-8% 7-10% 4.8-5.2% 5.4-6% Retired Refunded by 9/1/96 bonds Partially refunded by 8/1/93 bonds Partially refunded by 98A and 5/03 Partially refunded by 98A and 5/07 Outstanding – Final payment date FY 2027 Retired 7/1/93 9/1/96 7/1/98 7/1/03 7/1/08 4/1/98A 4/1/98B 36,200,000 5,020,000 4.7-5.1% 4.5% Outstanding 7/1/03 11/99 5/03 3/05 150,000,000 35,075,000 118,745,000 4.8-6% 1.2-2.1% 3.0-5.25% Partially refunded by 3/05 – Final payment date FY 2013 Retired Outstanding – Final payment date FY 2020 Outstanding 7/1/08 Outstanding 96 DEBT SERVICE - HISTORICAL PERSPECTIVE ORIGINAL ISSUE AMOUNT 38,200,000 DATE ISSUED 05/07 INTEREST RATE 4.0-5.5% DATE RETIRED/ PURPOSE Refunded 8/96 Bonds STATUS Outstanding – Final payment date FY 2022 Outstanding – Final payment date FY 2038 Partially issued. Board authorized issuance of $822,000,000, ($680 million in Feb. 2006 and $142 million in May 2007). Outstanding – Final payment date FY 2038. Total NDOT bonds authorized $300,000,000 Partially issued. Board authorized issuance of $822,000,000, ($680 million in Feb. 2006 and $142 million in May 2007). Proposed – Final payment date FY 2039. Total NDOT bonds authorized $300,000,000 DEFEASED Outstanding 11/07 50,000,000 4.0-6.0% Purchase land Outstanding FY 2007 16,000,000 variable Issue commercial paper for the Las Vegas Convention Center’s Master Plan Enhancement Program Nevada Department of Transportation Partial 08/08 26,455,000 4.0-6.0% Outstanding FY 2008 80,000,000 variable Issue commercial paper for the Las Vegas Convention Center’s Master Plan Enhancement Program Nevada Department of Transportation Partial 02/10 273,545,000 Unknown Proposed 97 PERSONNEL ALLOCATION SUMMARY OF PERSONNEL REQUESTS BUDGET PROCESS In the early stages of the budget process, personnel requests along with detailed justifications and other supporting documentation are submitted. Budget meetings and further analysis result in a reduction of requests. Every effort is made to limit the number of new employees while ensuring efficient operation of the LVCVA. The positions are funded in payroll suspense and are not reflected in any division’s budget. Funds are transferred from the payroll suspense account to the appropriate budget as each position is filled. If any new positions had been requested, a summary of the justifications of each requested position along with proposed cost, which equals annual base salary plus employee benefits, would be presented below. However, due to the current economic climate the LVCVA has instituted a strategy of deferring any new requests for personnel until next fiscal year (FY 2011). . 98 PERSONNEL ALLOCATION SUMMARY OF AUTHORIZED POSITIONS by organizational unit/section FYE 6/30/06 GENERAL GOVERNMENT Executive Human Resources Public Affairs Finance* Purchasing and Contracts* Materials Management* 17 8 12 ---37 17 10 14 ---41 17 10 18 ---45 17 10 18 23 10 9 87 17 10 18 23 10 9 87 FYE 6/30/07 FYE 6/30/08 FYE 6/30/09 FYE 6/30/10 MARKETING Advertising Internet Marketing & Research Sports Marketing Convention Center Sales Convention Services Diversity Marketing Convention Sales Leisure Sales International Sales Destination Services Registration Services Call Center Visitor Information 2 6 2 12 15 2 30 17 2 10 4 26 18 146 2 6 4 12 15 4 30 17 2 10 4 26 18 150 2 7 4 12 16 4 28 15 8 10 4 24 18 152 2 7 2 13 16 4 28 17 8 10 4 23 18 152 2 7 2 13 16 4 28 17 8 10 4 23 18 152 OPERATIONS Customer Experience** Information Technology Project Development Client Services Engineering Systems*** Engineering Maintenance*** Engineering*** Security Traffic Physical Security Finance Purchasing Materials Management -12 5 112 50 49 -49 11 5 19 9 9 330 513 2 12 6 116 --100 50 15 5 21 10 9 346 537 2 15 7 126 --111 39 17 17 22 11 10 377 574 2 15 4 126 --113 39 17 17 ---333 572 2 15 4 126 --113 39 17 17 ---333 572 TOTAL LVCVA * Finance, Purchasing and Materials Management moved to the Executive Division in FY 2009. **Customer Experience department was created during FY 2006 as part of the Executive department, but in FY 2007 became a separate department under the Operations Division. ***In FY 2007 Engineering Systems and Engineering Maintenance were combined into one department, Engineering. 99 PERSONNEL ALLOCATION The following is the staffing pattern by organizational unit/section for FY 2010. All new positions, transfers, reclassifications, title changes and changes resulting from re-organizations are included. Upon approval by the Board of Directors at the public budget hearing, this staffing pattern will be authorized as of July 1, 2009. Total authorized positions: 572. EXECUTIVE (General Government) Secretary Administrative Assistant Executive Assistant to the Board Executive Assistant Staff Auditor Internal Auditor Executive Assistant to the President Director of Internal Audit Vice President of Strategic Planning Legal Counsel Senior Vice President of Marketing Senior Vice President of Operations Executive Vice President President and CEO 1 2 1 2 1 2 1 1 1 1 1 1 1 1 17 HUMAN RESOURCES (General Government) Human Resources Representative Learning & Development Specialist Administrative Assistant Benefits Coordinator HR Information Systems Administrator Employee Relations Manager Learning & Development Manager Director of HR & Organizational Development Vice President of Human Resources 2 1 1 1 1 1 1 1 1 10 PUBLIC AFFAIRS (General Government) Secretary Photographer Video Specialist Curator Lead Photographer Administrative Assistant Media Specialist Public Relations Manager/Business Public Relations Manager/Leisure Senior Manager of News Bureau Senior Manager of Domestic Public Relations Senior Manager of International PR VP of Resort Industry & Business Relations Vice President of Public Affairs 2 3 1 1 1 2 1 1 1 1 1 1 1 1 18 MATERIALS MANAGEMENT (General Government) Mail Clerk Copy Center Specialist Materials Service Worker Mail Room/Copy Center Coordinator Distribution Center Coordinator Materials Management Manager 3 1 2 1 1 1 9 PURCHASING (General Government) Secretary Purchasing Assistant Buyer Senior Buyer Contracts Coordinator Contracts Administrator Purchasing Manager Senior Manager of Purchasing 1 2 2 1 1 1 1 1 10 FINANCE (General Government) Accounting Specialist Accounting Technician Payroll Specialist Lead Payroll Technician Secretary Administrative Secretary Administrative Assistant Records Management Specialist Analyst Management Specialist Accountant Transportation Coordinator Financial Analyst Senior Financial Analyst Financial Systems Administrator Senior Manager of Financial Resources Senior Manager of Financial Systems Senior Manager of Accounting Operations Director of Finance & Purchasing Vice President of Finance 1 3 1 1 1 1 1 1 1 1 1 1 2 1 1 1 1 1 1 1 23 100 PERSONNEL ALLOCATION ADVERTISING (Marketing) Secretary Advertising Executive CONVENTION SALES (Marketing) Administrative Specialist - Chicago Administrative Specialist - Wash DC Secretary Secretary - Chicago Secretary - Wash DC 1 1 1 1 1 1 1 7 SPORTS MARKETING (Marketing) Administrative Secretary Director of Sports Marketing Administrative Secretary Sales Representative Sales Executive Sales Executive - Chicago Sales Executive - Wash DC Sr. Manager of Regional Sales - Chi Sr. Manager of Regional Sales - WDC Director of Convention Sales 1 1 2 1 1 7 2 2 1 3 6 1 1 1 1 1 28 INTERNET MARKETING & RESEARCH (Marketing) Administrative Secretary Web Content Coordinator Research Analyst Senior Research Analyst Web Publisher Internet Marketing Manager Director of Internet Marketing & Research 1 1 2 LEISURE SALES (Marketing) Secretary Secretary - Laughlin Secretary - Mesquite Administrative Secretary Sales Representative - Laughlin Sales Executive Sales Executive - Mesquite Sr. Mgr of Leisure Sales Sr. Mgr of Regional Sales - Laughlin Senior Director of Leisure Sales 5 1 1 1 1 4 1 1 1 1 17 CONVENTION CENTER SALES (Marketing) Secretary Administrative Assistant Sales Executive Director of Convention Center Sales Vice President of Convention Sales 5 1 5 1 1 13 CONVENTION SERVICES (Marketing) Secretary Administrative Secretary Leasing Administrator Convention Services Manager Director of Convention Services 3 1 1 10 1 16 DIVERSITY MARKETING (Marketing) Secretary Administrative Secretary Sales Executive Director of Diversity Marketing 1 1 1 1 4 DESTINATION SERVICES (Marketing) Administrative Specialist Account Representative Administrative Secretary Database Marketing Administrator Marketing Services Manager Director of Marketing Director of Destination Services INTERNATIONAL SALES (Marketing) Secretary Administrative Secretary Administrative Assistant Sales Executive Director of International Sales VP of International Brand Strategy 2 1 1 2 1 1 8 4 1 1 1 1 1 1 10 101 PERSONNEL ALLOCATION REGISTRATION SERVICES (Marketing) Administrative Specialist Registration Services Supervisor Registration Services Manager CLIENT SERVICES (Operations) Custodian Service Worker Administrative Secretary Services Supervisor Facility Operations Manager CALL CENTER (Marketing) Call Center Agent Call Center Supervisor Call Center Manager 18 4 1 23 VISITOR INFORMATION (Marketing) Visitor Information Clerk Visitor Information Center Supervisor Visitor Information Supervisor Visitor Information Manager ENGINEERING (Operations) Secretary Administrative Secretary 12 4 1 1 18 CUSTOMER EXPERIENCE (Operations) Administrative Secretary Director of Customer Experience 1 1 2 INFORMATION TECHNOLOGY (Operations) Administrative Assistant Portable Systems Technician Senior Help Desk Specialist Systems Technician Programmer Analyst Systems Administration Specialist Senior Web Developer Telecommunications Supervisor Network Supervisor Software Development Supervisor Support Systems Supervisor Vice President of Information Technology Administrative Assistant CMMS Dispatcher CMMS Coordinator Facility Support Technician Groundskeeper Graphics Technician Skilled Crafts - Carpenter Skilled Crafts - Communications Skilled Crafts - Electrician Skilled Crafts - HVAC Skilled Crafts - Mechanic/Welder Skilled Crafts - Painter 1 1 2 1 2 2 1 1 1 1 1 1 15 PROJECT DEVELOPMENT (Operations) Construction Designer Project Analyst Documentation Management Supervisor Construction Project Representative Skilled Crafts - Plumber Damage Assessment Technician CMMS Administrator Facility Support Supervisor Graphics Supervisor Grounds Supervisor Communications Supervisor Engineering Assistant Supervisor Engineering Maintenance Supervisor Skilled Crafts - Supervisor Construction Project Representative Sr. Manager of Engineering Systems Sr. Manager of Engineering Maint. Director of Facility Operations Director of Facility Projects Director of Engineering Vice President of Facilities 1 2 1 1 1 1 13 2 12 8 13 10 7 8 7 1 1 1 1 2 2 2 2 6 2 1 1 1 1 1 1 113 Director of Client Services 2 1 1 4 57 54 1 11 2 1 126 1 1 1 1 4 102 PERSONNEL ALLOCATION SECURITY (Operations) Secretary Security Officer Administrative Secretary Security Sergeant Canine Supervisor Security Manager Director of Security PHYSICAL SECURITY (Operations) Security Dispatcher Surveillance Investigator Control Center Supervisor Life Systems Coordinator Safety Coordinator Safety Supervisor Physical Security Manager 1 30 1 4 1 1 1 39 8 2 1 1 3 1 1 17 TRAFFIC (Operations) Security Officer Traffic Field Supervisor Administrative Traffic Supervisor Security Sergeant Traffic Manager 10 2 1 3 1 17 Personnel Level vs Operating Expenditures 580 # of Employees 560 540 520 500 480 60,000,000 80,000,000 100,000,000 Operating Expenditures FY 06 FY 07 Personnel FY 08 FY 09 FY 10 Operating Expenditures Operating expenditures, as presented in the graph above, include General Government, Marketing (not including Advertising), and Operations Division expenditures. 103 PERSONNEL ALLOCATION BARGAINING AND NONBARGAINING UNIT CLASSIFICATIONS During FY 2009 the LVCVA and the bargaining unit were negotiating a new contract, which was not finalized at the time of this printing. The attached salary schedule from 7/1/07 to 6/30/08 was in effect during FY 2009. CLASS TITLE Account Representative Accountant Accounting Specialist Accounting Technician Administrative Assistant Administrative Secretary Administrative Specialist Administrative Specialist – Chicago/WDC Administrative Traffic Supervisor Analyst Benefits Coordinator Buyer Call Center Agent Call Center Supervisor Canine Supervisor CMMS Administrator CMMS Coordinator CMMS Dispatcher Communications Supervisor Construction Designer Construction Project Representative Contracts Administrator Contracts Coordinator Control Center Supervisor Copy Center Specialist Curator Custodian Damage Assessment Tech Database Marketing Administrator Distribution Center Clerk Distribution Center Coordinator Documentation Management Supvr Engineering Assistant Supervisor Engineering Maintenance Supervisor Executive Assistant Executive Assistant to the Board Executive Assistant to President Facility Support Supervisor Facility Support Technician Financial Analyst Financial Systems Administrator Graphics Supervisor Graphics Technician Grounds Supervisor Groundskeeper HR Information Systems Administrator CLASSIFICATION NB NB B B NB NB B NB NB NB NB B B NB NB NB NB B B NB NB NB NB NB B NB B B NB B B NB B B NB NB NB B B NB NB B B B B NB 104 GRADE 18 22 16 20 22 20 13 13 22 22 22 20 13 22 22 29 20 15 25 23 27 23 19 22 14 20 9 20 23 13 20 25 22 25 23 23 29 25 20 26 29 25 20 22 17 29 SALARY SCHEDULE 38,294.27 44,842.41 35,517.51 41,423.26 44,842.41 41,423.26 31,538.86 31,538.86 44,842.41 44,842.41 44,842.41 41,423.26 31,538.86 44,842.41 44,842.41 59,016.26 41,423.26 34,087.70 50,499.52 46,541.58 54,457.45 46,541.58 39,910.56 44,842.41 32,740.76 41,423.26 26,917.89 41,423.26 46,541.58 31,538.86 41,423.26 50,499.52 44,842.41 50,499.52 46,541.58 46,541.58 59,016.26 50,499.52 41,423.26 52,468.12 59,016.26 50,499.52 41,423.26 44,842.41 36,843.73 59,016.26 56,716.14 66,351.82 52,468.12 61,399.26 66,351.82 61,399.26 46,541.58 46,541.58 66,351.82 66,351.82 66,351.82 61,399.26 46,541.58 66,351.82 66,351.82 87,446.85 61,399.26 50,499.52 74,723.53 68,983.54 80,815.83 68,983.54 59,016.26 66,351.82 48,510.19 61,399.26 39,910.56 61,399.26 68,983.54 46,541.58 61,399.26 74,723.53 66,351.82 74,723.53 68,983.54 68,983.54 87,446.85 74,723.53 61,399.26 77,728.20 87,446.85 74,723.53 61,399.26 66,351.82 54,457.45 87,446.85 PERSONNEL ALLOCATION BARGAINING AND NONBARGAINING UNIT CLASSIFICATIONS (continued) During FY 2009 the LVCVA and the bargaining unit were negotiating a new contract, which was not finalized at the time of this printing. The attached salary schedule from 7/1/07 to 6/30/08 was in effect during FY 2009. CLASS TITLE Human Resources Representative Internal Auditor Lead Payroll Technician Lead Photographer Learning & Development Specialist Leasing Administrator Life Systems Coordinator Mail Clerk Mail Room/Copy Center Coordinator Management Specialist Materials Service Worker Media Specialist Network Supervisor Payroll Specialist Photographer Portable Systems Technician Programmer Analyst Project Analyst Purchasing Assistant Records Management Specialist Registration Services Supervisor Research Analyst Safety Coordinator Safety Supervisor Secretary Secretary – Chicago, WDC & Laughlin Security Dispatcher Security Officer Security Sergeant Senior Buyer Senior Financial Analyst Senior Help Desk Specialist Senior Research Analyst Senior Web Developer Service Worker Services Supervisor Skilled Crafts Supervisor Skilled Craftsman Software Development Supervisor Staff Auditor Support Systems Supervisor Surveillance Investigator Systems Administration Specialist Systems Technician Telecommunications Supervisor Traffic Field Supervisor CLASSIFICATION NB NB NB B NB NB B B B NB B NB NB NB B NB NB NB B NB NB NB B NB B NB B B B B NB NB NB NB B B B B NB NB NB NB NB NB NB NB 105 GRADE 16 26 22 20 18 23 25 12 20 16 14 22 32 16 18 22 29 25 18 18 22 25 25 27 16 16 15 17 22 23 29 22 29 31 14 22 25 20 32 22 32 18 29 22 32 22 SALARY SCHEDULE 35,517.51 52,468.12 44,842.41 41,423.26 38,294.27 46,541.58 50,499.52 30,274.88 41,423.26 35,517.51 32,740.76 44,842.41 66,351.82 35,517.51 38,294.27 44,842.41 59,016.26 50,499.52 38,924.27 38,294.27 44,842.41 50,499.52 50,499.52 54,457.45 35,517.51 35,517.51 34,087.70 36,843.73 44,842.41 46,541.58 59,016.26 44,842.41 59,016.26 63,844.50 32,740.76 44,842.41 50,499.52 41,423.26 66,351.82 44,842.41 66,351.82 38,294.27 59,016.26 44,842.41 66,351.82 44,842.41 52,468.12 77,728.20 66,351.82 61,399.26 56,716.14 68,983.54 74,723.53 44,842.41 61,399.26 52,468.12 48,510.19 66,351.82 98,305.15 52,468.12 56,716.14 66,351.82 87,446.85 74,723.53 56,716.14 56,716.14 66,351.82 74,723.53 74,723.53 80,815.83 52,468.12 52,468.12 50,499.52 54,457.45 66,351.82 68,983.54 87,446.85 66,351.82 87,446.85 94,595.93 48,510.19 66,351.82 74,723.53 61,399.26 98,305.15 66,351.82 98,305.15 56,716.14 87,446.85 66,351.82 98,305.15 66,351.82 PERSONNEL ALLOCATION BARGAINING AND NONBARGAINING UNIT CLASSIFICATIONS (continued) The salary schedule for the bargaining (B) positions is effective from 7/1/08 to 6/30/09. Bargaining unit contract negotiations are currently underway, but are not finalized. The Salary Schedule listed below is from FY 2009. CLASS TITLE Transportation Coordinator Video Specialist Visitor Information Center Supervisor Visitor Information Clerk Visitor Information Supervisor Web Content Coordinator Web Publisher CLASSIFICATION NB B NB B NB NB NB GRADE 24 18 22 13 25 23 26 SALARY SCHEDULE 48,510.19 38,294.27 44,842.41 31,538.86 50,499.52 46,541.58 52,468.12 71,843.18 56,716.14 66,351.82 46,541.58 74,723.53 68,983.54 77,728.20 106 STATISTICAL DATA GENERAL FUND REVENUES BY SOURCE LAST TEN FISCAL YEARS The schedule below includes only revenues earned in the general fund. It does not include other financing sources such as operating transfers into the general fund or sale of fixed assets. The percentage shown in the column boxes indicate the percent of increase or decrease for that column compared to the preceding year. FISCAL YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TOTAL REVENUES $136,347,308 149,507,345 169,111,399 160,456,123 168,352,692 193,181,748 224,770,553 253,172,521 269,118,610 281,347,879 ROOM TAXES $97,872,354 13% 120,536,301 23% 135,841,371 13% 124,171,822 130,749,470 -9% 5% ROOM TAXNRS 244 (S.B. 170) $12,777,779 1,064,997 ---------------------------------------------------------------14% -92% 0% 0% 0% 0% 0% 0% 0% CHARGES FOR SERVICE $22,226,496 23,598,086 27,698,278 32,483,745 34,644,609 37,353,827 45,056,357 48,359,639 50,916,320 57,689,079 35% 6% 17% 17% 7% 8% 21% 7% 5% 13% GAMING FEES $1,722,086 1,775,145 2,085,169 2,001,338 1,881,540 1,914,920 1,861,748 1,963,608 1,949,332 1,851,848 -3% 3% 18% -4% -6% 2% -3% 5% -<1% -5% INTEREST AND OTHER $1,748,593 2,532,816 3,486,581 1,799,218 1,077,073 793,850 1,513,190 2,762,447 2,996,882 1,644,887 ---------- -100% * 153,119,151 17% 176,339,258 15% 200,086,827 13% 213,256,076 220,162,065 7% 3% Room Tax Revenue Millions 250 200 150 100 50 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Room Taxes Charges for Service Revenue Millions 80 60 40 20 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Charges for Service *As of July 1, 1999, the special promotion room tax was diverted to the Clark County School District for new school construction. 107 STATISTICAL DATA GENERAL FUND REVENUES BY SOURCE LAST TEN FISCAL YEARS (continued) The components of “Charges for Service” are shown below: the percentages shown in the column boxes indicate the percent increase or decrease for that column compared to the preceding year. TOTAL FISCAL YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CHARGES FOR SERVICE $22,226,496 23,598,086 27,698,278 32,483,745 34,644,609 37,353,827 45,056,357 48,359,639 50,916,320 57,689,079 CONVENTION CENTER FACILITIES RENTAL $14,375,925 15,171,576 19,035,306 24,001,457 25,807,382 27,053,317 33,406,123 36,089,748 36,280,156 42,873,520 37% 6% 26% 26% ** 8% 5% 23% 8% <1% 18% * CATERING & CONCESSIONS $3,814,495 3,810,119 3,850,719 4,067,516 4,268,815 5,415,860 6,899,231 6,493,289 6,917,274 7,974,530 30% <1% 1% 6% 5% 27% 27% -5% 7% 15% CASHMAN CENTER FACILITIES RENTAL $1,536,480 1,677,482 1,885,896 1,919,459 1,980,546 1,895,910 1,968,685 2,182,678 2,102,463 21% 9% 12% 24% 3% -4% 3% 11% -4% * CATERING & CONCESSIONS $164,911 283,761 162,162 178,041 146,953 144,345 -3% 72% 2% 23% -7% 16% OTHER FEES & CHARGES $2,334,685 2,655,148 2,767,606 2,701,916 2,504,566 2,726,063 2,695,646 3,660,964 5,411,821 4,594,221 158,751 -44% 144,387 -11% 159,447 -10% 124,392 -15% 1,550,694 -18% * Increase due to increase in rental rates at both facilities. Expansions at the Convention Center (i.e. additional halls and meeting rooms) were also completed in FY 1999 and FY 2002. ** Increase in rental rates at the Convention Center only. Facilities Rental - LVCC Catering & Concessions - LVCC Millions 50 40 30 20 10 1999 2000 Millions 10 8 6 4 2 - 2001 2002 2003 2004 2005 2006 2007 2008 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Facilities Rental - LVCC Catering & Concessions - LVCC Facilities Rental - Cashman Millions 2.5 2.0 1.5 1.0 0.5 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Facilities Rental - Cashman $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Catering & Concessions - Cashman Catering & Concessions - Cashman 108 STATISTICAL DATA GENERAL FUND EXPENDITURES BY SOURCE LAST TEN FISCAL YEARS The schedule below includes only expenditures in the general fund. It does not include other uses such as operating transfers for special revenue, debt service or capital project funds. The percentages shown in the column boxes indicate the percent of increase or decrease for that column compared to the preceding year. REMAINING FISCAL YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TOTAL EXPENDITURES $103,494,864 111,791,730 133,020,634 140,940,658 140,863,330 151,864,095 176,076,252 193,486,005 205,278,234 214,001,753 PERSONNEL (A) $27,291,137 29,065,820 32,499,587 34,922,148 35,723,305 37,113,372 37,988,620 40,185,908 44,145,739 47,513,649 6% 6% 12% 7% 2% 4% 2% 6% 10% 8% ADVERTISING (B) $28,039,590 34,359,091 48,196,736 60,058,012 59,059,994 64,831,141 78,027,753 82,732,989 84,506,694 87,857,388 4% 23% 40% 25% -2% 10% 20% 6% 2% 4% BUILDING (C) $4,589,887 4,644,749 5,001,774 6,263,385 6,858,458 7,142,396 8,693,104 9,123,156 10,574,453 10,945,593 23% 1% 8% 25% 10% 4% 22% 5% 17% 4% * COMMUNITY SUPPORT (D) $27,572,800 -29% ** 26,694,290 27,376,226 21,511,863 24,388,640 28,753,093 34,248,193 38,416,171 38,640,536 -3% 3% 3% 13% 18% 19% 12% 1% SUPPLIES & SERVICES $16,001,450 17,027,780 19,946,311 18,892,853 17,709,710 18,388,546 22,593,869 27,143,818 27,513,368 28,861,011 20,807,260 -24% (A) The column labeled “Personnel” includes salaries and employee benefits. (B) Advertising includes only the services and supplies. (C) The “Building” column includes repairs and maintenance (excludes computers and portable equipment), utilities, and insurance costs for the Convention Center and Cashman Center. Many repair and maintenance items can only be performed when the buildings are empty which results in fluctuating costs from year to year. (D) The “Community Support” column includes collection allocation, grants, and special events. * ** Increase due to construction and opening of new halls and meeting rooms. Decrease due to loss of the 5/8 of 1% room tax that was restricted to the promotion of tourism and special events. Expense Trend - Advertising Millions 100 80 60 40 20 0 03 99 00 01 02 04 05 20 06 20 07 19 20 20 20 20 20 20 20 08 Expenditures Trends Millions 50 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Personnel Building Remaining Supplies & Services Advertising Community Support 109 STATISTICAL DATA GENERAL FUND EXPENDITURES BY SOURCE LAST TEN FISCAL YEARS (continued) The components of personnel expenditures are shown below. The percentages shown in the column boxes indicate the percent of increase for that column compared to the preceding year. FISCAL YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 PERSONNEL EXPENDITURES $27,291,137 29,065,820 32,499,587 34,922,148 35,723,305 37,113,372 37,988,620 40,185,908 44,145,739 47,513,649 SALARIES AND WAGES $21,068,200 22,337,889 25,026,869 26,597,881 27,615,392 28,220,780 28,746,860 30,285,218 33,251,674 35,931,996 6% 6% 12% 6% 4% 2% 2% 5% 10% 8% EMPLOYEE BENEFITS $6,222,937 6,727,931 7,472,718 8,324,267 8,107,913 8,881,472 9,231,120 9,900,690 10,894,065 11,581,683 5% 8% 11% 11% -3% 10% 4% 7% 10% 6% BENEFITS AS A PERCENT OF SALARIES 30% 30% 30% 31% 29% 31% 32% 33% 33% 32% Salaries and Benefits Millions 50 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Salaries & Wages Employee Benefits 110 STATISTICAL DATA USE OF FACILITIES LAST TEN FISCAL YEARS The yearly increase in the number of convention delegates visiting Las Vegas is related to a rise in total conventions held in the Las Vegas area. While many of those conventions and events are held at resort hotels, the LVCVA has also benefited from activities held at the Las Vegas Convention Center and Cashman Center. Facilities usage revenue does not include catering/concessions revenues or reimbursed services. LAS VEGAS CONVENTION CENTER - BUILDING UTILIZATION FISCAL YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TOTAL ACTIVITIES 173 170 168 **88 105 108 96 106 96 83 FACILITIES USAGE REVENUE *$14,135,912 14,848,193 18,818,224 *23,841,647 25,599,432 26,877,290 33,244,601 35,825,314 35,961,813 42,587,445 CONVENTIONS 50 68 68 63 79 80 74 84 78 66 EVENTS 17 18 4 8 3 4 12 12 15 12 MEETINGS 106 84 96 17 23 24 10 10 3 5 Source: Las Vegas Convention and Visitors Authority – Convention Services and Finance departments * Increase due to rental rate increase and expansion opening. ** 2002 activity counts are based on an updated methodology that removes in-house meeting room events such as internal meetings and employee events. LVCC Activities vs. Facility Usage Revenue 200 # of Activities 150 100 50 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Activities Facilities Usage Revenue Millions 50 40 30 20 10 0 Facility Usage Revenue 111 STATISTICAL DATA USE OF FACILITIES LAST TEN FISCAL YEARS (continued) CASHMAN CENTER - BUILDING UTILIZATION FISCAL YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TOTAL ACTIVITIES 484 447 495 451 479 **217 203 240 257 277 FACILITIES USAGE REVENUE $1,524,804 1,846,319 1,837,459 1,532,790 1,904,130 1,971,544 1,884,378 1,966,014 2,157,445 2,069,376 CONVENTIONS 3 4 10 8 6 4 6 4 4 2 EVENTS 166 177 224 218 241 136 135 137 158 163 MEETINGS 315 266 261 225 232 77 62 99 95 112 Source: Las Vegas Convention and Visitors Authority – Convention Services and Finance departments **2004 activity counts are based on an updated methodology that removes in-house meeting room events such as internal meetings and employee events. Cashman Center Activities vs. Facility Usage Revenue 600 500 400 300 200 100 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Activities Facilities Usage Revenue Millions 2.5 2 1.5 1 0.5 0 Facility Usage Revenue # of Activities 112 STATISTICAL DATA EXCERPT OF RENTAL RATES PER FACILITY In mid-FY 2002, the Board of Directors approved rental rate increases at both the Las Vegas Convention Center and Cashman Center. Below is a basic rate guide. Events and trade show/conventions that already had signed lease agreements prior to January 1, 2002 were honored at the previous rates. LAS VEGAS CONVENTION CENTER CONVENTION/TRADE SHOW AND PUBLIC EVENTS When used for commercial exhibits, the cost per individual exhibit hall is either the minimum daily rate (ranges from $5,500 to $30,500) or $.25 per net square foot, whichever is greater. Exhibit halls used for catered food functions only are at no charge. The total number of move in/move out days equal to one (1) times the number of show days are at no charge. Additional move in/move out days are at 50% of the minimum daily rate per day. Beginning in FY10, the net square foot cost will increase to $.29, and in FY13 the net square foot cost will increase to $.34. When exhibit halls are used for commercial exhibits and meeting rooms are used for association's use, meeting rooms will be provided in the amount of 10 complimentary meeting rooms per 100,000 square feet of exhibit space used. Additional rooms will be charged the minimum daily room rate (ranges from $125 to $1,475). This includes a one-time set-up per day – i.e. lights, heat, air, custodial and sound services (one microphone per room). Change-overs and revised room set-ups will be charged the daily room rate. Meeting rooms used by exhibitors are charged the daily rate. Exhibit halls used for meetings without commercial exhibits are charged twice the daily rate. If meeting rooms are sublet, a fee will be charged. Rental of meeting rooms only is at the daily rate. Parking fees are $10.00 per space per day with in and out privileges. CASHMAN CENTER CONVENTION/TRADE SHOW Exhibit hall rates are based on $0.25 per net square foot or $6,130 minimum. The total days of move-in/moveout equal the number of actual show days (minimum two days at no charge). Extra move-in/move-out days are at 50% of the minimum daily rate. Meeting rooms are $300 per day and leased at three levels: (1) Used by a lessee for their association meetings only will be charged at the minimum daily rate. (2) Sublet by the lessee for meetings only will be charged the minimum daily rate or 15% of their sublease rate, whichever is greater. (3) Used for exhibit space or registration areas will be charged at twice the minimum daily rate. PUBLIC EVENT Exhibit hall rates are set at $3,000 per day for each hall. Extra move-in/move-out days are charged at 50% of the minimum daily rate for activity days for all events less than two days duration. Meeting room rental rates are $300 per day ($800 per day if using the Club Level Restaurant). The stadium rental rate is $4,000 per day. The daily field rate (restricted use) is $500 per day. The theater rental rate for performances is $2,500 per day. Business meeting use rate for the theater is $1,250 per day. Dress rehearsals performed prior to actual show days are charged 50% of the minimum daily rate. Parking fees are $3.00 per car per day with no in and out privileges. As referenced against closed-to-the-public conventions and trade shows, public invited events come in a wide variety of compositions and are subject to different rate classifications: full rental, half rental and cost reimbursable. 113 STATISTICAL DATA DEMOGRAPHIC STATISTICS - CLARK COUNTY, NEVADA LAST TEN FISCAL YEARS Even though Clark County combines the glamorous gaming and entertainment mecca of Las Vegas alongside rural living, it is not much different from other counties its size. There are parks, museums, libraries and religious centers. The median age of the entire population is 35.7, with approximately 26.6% of the total population under 18 years of age. The Clark County School District is the 5th largest in the nation. It has a total of 347 schools. The median household income is $57,403. Per the Census Bureau, Clark County is the nation’s 15th most populous county in the United States. The population in FY 2008 grew by less than 1% over FY 2007. Incorporation Date 1909 1911 1946 1953 1958 1984 2008 Population 853,551 593,528 214,661 269,538 16,684 19,754 Square Miles (approx.) 8,260 110 80 96 200 15 Entity Clark County Las Vegas N. Las Vegas Henderson Boulder City Mesquite Clark County, Nevada Source: www.co.clark.nv.us/ceit/gismo/gismo MEDIAN AS OF DEC 31, 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 HOUSEHOLD INCOME 41,875 41,657 43,787 45,607 44,307 47,097 47,320 53,111 53,704 57,403 MEDIAN AGE 46.6 48.5 46.3 47.8 48.4 47.5 47.9 47.5 50.1 *35.7 SCHOOL ENROLLMENT (C) 216,237 231,125 257,754 269,382 283,885 295,165 304,444 315,697 323,037 330,519 Source: population estimates - Nevada State Demographer. Further statistics that reflect the local economy are shown below. LABOR AS OF JUNE 30, 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 POPULATION (A) 1,327,145 1,394,440 1,485,855 1,549,657 1,620,748 1,715,337 1,796,380 1,874,837 1,954,319 1,967,716 FORCE (B) 704,870 724,110 757,910 781,800 805,300 834,230 875,710 922,420 958,400 986,800 UNEMPLOYMENT RATE (B) 4.6% 4.7% 5.3% 6.1% 5.8% 4.8% 4.3% 4.3% 4.7% 6.3% Sources: (A) June 30 population estimates from the Nevada State Demographer. (B) June 30 labor force statistics and unemployment rates from the Nevada Dept. of Employment, Training & Rehabilitation – Information Development & Processing Division – Research & Analysis Bureau (figures rounded). (C) Total public, private and parochial school enrollment for FY 1999 – 2003 are from the Nevada Department of Education, Administrative & Fiscal Services. FY 2004 – 2008 is from the Las Vegas Perspective. All other statistics are as of December 31 and are from the Las Vegas Perspective. * - Starting with calendar year 2008 - median age calculation includes entire population previously it was the adult population only. 114 STATISTICAL DATA VISITOR ANALYSIS LAST TEN CALENDAR YEARS In its role of promoting Las Vegas as a travel destination, the LVCVA contributes to the growth of the entire local economy. The Las Vegas economy is heavily dependent on the hotel/gaming/recreation industry, which employs 29.3% of the labor force. The health of the hotel/gaming industry is directly related to the volume of visitors, presented below. The number of visitors to Las Vegas has grown by 10.9% since 1999. % OF TOTAL VISITORS 11.2% 10.7% 14.5% 14.6% 15.9% 15.3% 16.0% 16.2% 15.8% 15.7% % OF TOTAL VISITORS 88.8% 89.3% 85.5% 85.4% 84.1% 84.7% 84.0% 83.8% 84.2% 84.3% CALENDAR YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CONVENTION DELEGATES 3,772,726 3,853,363 5,014,240* 5,105,450* 5,657,796 5,724,864 6,166,194 6,307,961 6,209,253 5,899,725 TOURISTS 30,036,408 31,996,328 30,003,077 29,966,054 29,882,330 31,663,917 32,400,523 32,606,928 32,987,508 31,581,827 TOTAL VISITORS 33,809,134 35,849,691 35,017,317 35,071,504 35,540,126 37,388,781 38,566,717 38,914,889 39,196,761 37,481,552 INCREASE/ (DECREASE) 10.5% 6.0% (2.3%) 0.2% 1.3% 5.2% 3.2% 0.9% 0.7% -4.4% Source: Las Vegas Convention and Visitors Authority, Marketing Division – Internet Marketing & Research * - 2002 convention delegate counts are based on an updated methodology that reflects significant growth in the small meetings market. 2001 counts were revised retroactively using the new methodology. Total Visitors Million 40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 Tourists 2006 2007 2008 Convention Delegates 115 STATISTICAL DATA VISITOR ANALYSIS LAST TEN CALENDAR YEARS (continued) Strong visitor levels produce beneficial secondary effects in other industries, as well, since visitors purchase a significant amount of goods and services while they visit the area. Visitors to Las Vegas in 2008 contributed nearly $41.6 billion to the economy of the area. Indicators of the economic impact include total gaming revenues in Clark County and room taxes collected on behalf of the LVCVA. GAMING REVENUES (000) 7,209,032 7,671,252 7,636,547 7,630,542 7,830,856 8,710,976 9,709,408 10,643,206 10,868,029 9,796,970 ROOM TAXES (Fiscal Year) 97,872,354 120,536,301 135,841,371 124,171,822 130,749,470 153,119,151 176,339,258 200,086,827 213,256,076 220,162,065 CALENDAR YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 TOTAL VISITORS 33,809,134 35,849,691 35,017,317 35,071,504 35,540,126 37,388,781 38,566,717 38,914,889 39,196,761 37,481,552 INCREASE/ (DECREASE) 10.5% 6.0% (2.3%) 0.2% 1.3% 5.2% 3.2% 0.9% 0.7% -4.4% INCREASE/ (DECREASE) 13.6% 6.4% (0.5%) (0.1%) 2.6% 11.2% 11.5% 9.6% 2.1% 9.9% INCREASE/ (DECREASE) 13.5% 23.2% 12.7% (8.5%) 5.3% 17.1% 15.2% 13.5% 6.6% 3.2% Source: Las Vegas Convention and Visitors Authority, Marketing Division – Internet Marketing & Research Nevada State Gaming Control Board Total Visitors vs. Room Taxes 40,000,000 39,000,000 # of Visitors (CY) 38,000,000 37,000,000 36,000,000 35,000,000 34,000,000 33,000,000 32,000,000 31,000,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $$200,000,000 $150,000,000 $100,000,000 $50,000,000 $250,000,000 Room Tax Revenue (FY) Total Visitors Room Taxes 116 STATISTICAL DATA VISITOR DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS The Las Vegas Convention and Visitors Authority conducts and compiles various research information on visitors to gain a better understanding of the composition of the Clark County visitor and to tailor advertising campaigns. The median age is 50.6 with 25% of visitors between the ages of 21 to 39, 43% between 40 and 59, and 32% over 60. The majority of visitors are married and employed. Further statistics regarding visitors to Las Vegas are shown below: AS OF DECEMBER 31, 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 GENDER Male 47% 43% 47% 52% 50% 52% 51% 52% 50% 51% Female 53% 57% 53% 48% 50% 48% 49% 48% 50% 49% MEDIAN AGE 49.9 50.4 48.2 47.6 50.2 49.0 47.7 48.0 49.0 50.6 MARITAL STATUS Married 71% 70% 70% 70% 73% 73% 74% 79% 79% 80% Single 18% 17% 18% 17% 16% 17% 16% 14% 14% 13% Other* 10% 13% 12% 13% 11% 10% 10% 7% 7% 7% JOB CATEGORIES Employed 65% 64% 67% 64% 64% 67% 67% 70% 67% 66% Retired 28% 28% 25% 27% 30% 26% 24% 24% 26% 28% Other** 9% 8% 8% 9% 6% 7% 9% 6% 7% 6% Source: Las Vegas Visitor Profile Study - Data from 1998-2002 was based on fiscal year July – June. Beginning in 2003 data is based on a calendar year. *Martial Status - Other includes separated, divorced or widowed. ** Job Categories Other includes student, homemaker or unemployed. UNITED STATES OF AMERICA AS OF DECEMBER 31, FOREIGN 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 11% 13% 12% 8% 12% 13% 12% 13% 12% 15% Eastern States 10% 9% 9% 9% 8% 9% 9% 8% 9% 8% Southern Midwestern Western States 12% 13% 13% 12% 12% 13% 13% 13% 13% 13% States 18% 18% 15% 15% 16% 17% 14% 14% 14% 12% States 48% 48% 51% 55% 52% 48% 52% 52% 52% 52% Source: Las Vegas Visitor Profile Study – Data from 1998-2002 was based on fiscal year JulyJune. Beginning in 2003 data is based on a calendar year. Eastern states: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. Southern States: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. Midwestern States: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. Western States: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada (excluding Clark County), New Mexico, Oregon, Utah, Washington, and Wyoming. 117 STATISTICAL DATA PRINCIPAL ROOM TAX PAYERS DECEMBER 31, 2008 The primary source of revenue for the LVCVA is from room taxes imposed on hotels and motels in Clark County. The hotels listed below represent the ten largest hotel properties in Clark County and, accordingly, are in the group that generates the greatest volume of room taxes for the LVCVA. Rooms at December 31 5,034 4,408 4,328 4,027 3,981 3,933 3,767 3,565 3,348 3,066 39,457 3,454 97,618 140,529 10,655 1,981 153,165 MGM Grand Luxor Mandalay Bay (including THEhotel) Venetian Excalibur Bellagio Circus Circus Flamingo Las Vegas Caesar’s Palazzo Resort Total Top 10 Hotels Total Jean/Primm Other hotels/motels Total Las Vegas metropolitan area Total Laughlin Total Mesquite Total Inventory of Rooms Source: Las Vegas Convention and Visitors Authority, Marketing Division – Internet Marketing & Research Note: Other hotels/motels does not include timeshare properties. 118 STATISTICAL DATA OCCUPANCY RATE LAST TEN CALENDAR YEARS In spite of the increasing availability of rooms, the occupancy rate for Las Vegas continues to grow, exceeding the national average by 25.6 points for calendar year 2008. Rooms Available* 120,294 124,270 126,610 126,787 130,482 131,503 133,186 132,605 132,947 140,529 Occupancy Percentage 88.0 89.1 84.7 84.0 85.0 88.6 89.2 89.7 90.4 86.0 National Occupancy Percentage 63.3 63.7 60.1 59.1 59.2 61.3 63.1 63.4 63.2 60.4 Calendar Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Las Vegas Convention and Visitors Authority, Marketing Division – Internet Marketing & Research * Total Las Vegas metropolitan area includes properties in the Jean/Primm area. Las Vegas Occupancy vs National Occupancy 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Las Vegas Occupancy Rate National Occupancy Rate 119 STATISTICAL DATA ROOM TAX RATE DISTRIBUTION BY JURISDICTION AS OF JUNE 30, 2009 CLARK COUNTY Others Others Resort Within Outside Hotels 35 miles 35 miles Distributed to: State of Nevada Clark County School District Collecting Jurisdiction County Transportation* Fremont St. Experience** LVCVA Total Room Tax Rate 3/8 1 5/8 1 1 0 5 9 3/8 1 5/8 2 1 0 4 9 3/8 1 5/8 2 1 0 2 7 LAS VEGAS Downtown 3/8 1 5/8 1 1 2 or 1 5 11 or 10 Resort Hotels 3/8 1 5/8 1 1 0 5 9 Others 3/8 1 5/8 2 1 0 4 9 Reference to miles – is distance from Las Vegas Convention Center. NORTH LAS VEGAS Resort Hotels Others Distributed to: State of Nevada Clark County School District Collecting Jurisdiction County Transportation* LVCVA Total Room Tax Rate 3/8 1 5/8 1 1 5 9 3/8 1 5/8 2 1 4 9 HENDERSON Resort Hotels Others 3/8 1 5/8 2 1 5 10 3/8 1 5/8 2 1 4 9 BOULDER CITY Resort Hotels Others 3/8 1 5/8 0 1 6 9 3/8 1 5/8 0 1 4 7 MESQUITE All 3/8 1 5/8 2 1 4 9 Source: Annual City/County Transient Lodging Tax Report as filed with the State of Nevada – Department of Taxation. * enacted by the Clark County Commission in 1991. ** enacted by the Las Vegas City Council in 1993. The Fremont Street Experience is a downtown revitalization project. This room tax applies only to properties within a specified geographic area. During the 2009 legislative session, the State of Nevada approved raising the room tax rate by up to 3% (total room tax cannot exceed 13%). This applies only to counties whose population exceeds 300,000. (i.e. Clark and Washoe Counties only). The effective date is July 1, 2009. The monies generated by this additional room tax are to fund education and other state programs. RESORT HOTEL DEFINITIONS BY JURISDICTION Clark County – An establishment having a casino containing not less than three games. Las Vegas – A hotel having seventy-five or more rooms. North Las Vegas – A hotel having one hundred or more rooms and a casino containing not less than three games. Henderson – An establishment renting rooms and having a casino on the same premises containing not less than three games. Boulder City – An establishment having one hundred or more rooms. Mesquite – No distinction between resort hotels and other transient lodging establishments. 120 GLOSSARY The annual budget contains terminology unique to governmental finance and budgeting. To assist the reader of the budget document in understanding these terms, the following glossary has been compiled. Account Group A self-balancing set of accounts that have no expendable financial resources. Account groups are used to maintain records of general long-term debts and general fixed assets. Accounting System The total set of records and procedures that are used to record, classify, and report information on the financial status and operations of an organization. Accrual Basis Accounting A system of accounting in which revenues and expenses are recorded as they are earned and incurred, not necessarily when cash is received or paid. Activity A financial and budgeting classification of similar endeavors or groupings of organizational units performing a specific and distinguishable type of work. In the LVCVA’s organizational chart, activities generally relate to departments. Appropriation An authorization made by the Board of Directors that permits the LVCVA to incur obligations and to make expenditures of resources. Augmentation An action increasing total appropriations. Augmentations are governed by State statute and require formal resolution by the Board of Directors. Balanced Budget A budget in which proposed funds or revenues available are equal to or exceed planned fund expenditures. Bond A written promise to pay a sum of money on a specific date at a specified interest rate. The interest payments and the repayment of the principal are detailed in a bond ordinance. Budget A financial plan for a specified period of time (fiscal year). Budget Document The instrument prepared by the Finance Department and supporting staff that presents a comprehensive proposed budget to the Board of Directors. Budget Message The opening section of the budget document that provides a general summary of the most important aspects of the budget and discusses significant changes from the current and previous fiscal years. Budgetary Control The control or management of a governmental unit in accordance with an approved budget for the purpose of keeping expenditures within the limitations of authorized appropriations and available resources. CAFR Abbreviation for Comprehensive Annual Financial Report. CC Abbreviation for Cashman Center. 121 GLOSSARY Capital Asset A financial resource meeting all of the following criteria: (1) generally tangible in nature (software is the exception); (2) useful life greater than one year; (3) not a repair part or supply item; and (4) original cost greater than the capitalization threshold. Capital Budget A plan of proposed capital outlays and the means of financing them. Capital Expenditure (aka Capital Outlay) A purchase or improvement of a tangible fixed asset (i.e. land, buildings, furniture) with a cost of $500 or more and a useful life of at least one year. Capital Improvement Plan A financial planning and management tool that lists proposed capital projects and capital acquisitions for a rolling five-year period. Capital Projects Fund A fund used to account for financial resources to be used for the acquisition or construction of capital assets. Capitalization Threshold The level of cost at which an asset becomes subject to control and reporting as a fixed asset. Cash Basis Accounting A system of accounting in which transactions are recorded, and revenues and expenses are recognized, only when cash is received or paid. CIP Abbreviation for capital improvement plan. Commercial Paper A short-term negotiable paper arising from business transactions. Coterminous In conjunction with term of office. Debt Service Fund A fund established to account for the accumulation of resources for and the payment of principal and interest on general long-term debt. Debt Service Requirements The amount of resources that must be provided so that all principal and interest payments can be made in full on schedule. Defeased Retirement of debt of a state or local governmental unit in an indirect manner. Department A grouping in the organizational structure of related sections or units. Depreciation The process of allocating the cost of tangible property over a period of time, rather than expensing the entire cost in one year. Generally, at the end of an asset’s useful life, the net value of the asset (original cost less accumulated depreciation) will equal the salvage value of the asset. Division A major grouping in the organizational structure of related activities within a functional area. EFT Abbreviation for electronic funds transfer; an automated means of payment. 122 GLOSSARY Employee Benefits A budget category that is comprised of retirement, insurance, unemployment and educational assistance expenses. Encumbrance The legal commitment of appropriated funds to purchase an item or service. To encumber means to set aside or commit funds for a future expenditure. Expenditure The amount of cash paid or to be paid for a service rendered, goods received or an asset purchased. Fam Abbreviation for familiarization trip. Fiduciary Fund Type A fund used to account for assets held by a government in a trust capacity or as an agent for others. Fiscal Year A consecutive twelve-month period signifying the beginning and ending period for recording financial transactions. The LVCVA has designated July 1 to June 30 as its fiscal year. Fixed Asset See capital asset. FTE Abbreviation for full-time employees. FYE Abbreviation for fiscal year ending. Function Financial and budgeting classification of a group of related activities aimed at accomplishing a broad goal or a major service. In the LVCVA's organizational chart, functions generally relate to divisions. Fund A separate self-balancing accounting entity. Resources are allocated to and accounted for in a particular fund based on the purposes of expenditures and the means of controlling them. Fund Balance The excess of an entity's assets over its liabilities. GAAP (Generally Accepted Accounting Principles) A body of accounting and financial reporting standards set by the Governmental Accounting Standards Board (GASB) for state and local governments, and by the Financial Accounting Standards Board (FASB) for private sector organizations. General Fund The general fund accounts for all of the financial resources not specifically accounted for in another fund. General Obligation Bonds G.O. bonds have the full faith and credit of the LVCVA pledged to the repayment of the bonds. They are primarily secured by ad valorem taxes and are additionally secured by net pledged revenues of the LVCVA, represented basically by room taxes. The LVCVA has never resorted to the use of property taxes for debt service, using only net pledged revenues derived from operations. In fact, no ad valorem property tax revenues are allocated to the LVCVA for any purpose. 123 GLOSSARY GFOA Abbreviation for Government Finance Officers Association. Goal A statement of broad direction, purpose, or intent. Governmental Fund Type A fund used to account for general governmental activities. Includes the general fund, capital projects funds, and debt service funds. Grant A contribution or gift to be used or expended for a specified purpose or activity. Green Items Products and services with reduced effects on human health and the environment. Intranet A network operating like the Internet but having access restricted to a limited group of authorized users (such as employees of a company). Inventory The process of verifying physical fixed assets with records of fixed assets. LEED Abbreviation for Leadership in Energy and Environmental Design. A voluntary, consensusbased national standard for developing high-performance, sustainable buildings. LGBT Abbreviation for Lesbian, Gay, Bisexual and Transgender. LVCC Abbreviation for Las Vegas Convention Center. Las Vegas Territory Refers to the area that encompasses the City of Las Vegas and surrounding towns and cities located within Clark County. Line-Item Budget A budget that lists each expenditure category (salary, telephone, travel, etc.) separately, along with a dollar amount budgeted for each specific account. Long-Term Debt Debt with a maturity of more than one year after the date of issuance. Modified Accrual Accounting A basis of accounting. Revenues are recognized, and any related receivable is recorded, when they become both measurable and available. Expenditures are recognized when the liability is incurred, except for unmatured principal and interest on long-term debt, which is recognized when due. MPEP Abbreviation for the Master Plan Enhancement Project. This project includes construction of a Las Vegas Metropolitan Police substation, a fire station and the connection of the existing buildings, and upgrading building and technology systems. NASCAR Abbreviation for National Association for Stock Car Auto Racing. NDOT Abbreviation for Nevada Department of Transportation. NRS Abbreviation for Nevada Revised Statutes. 124 GLOSSARY Objective A statement of specific direction, purpose, or intent based on the goals established for a particular function. Operating Budget The portion of the budget that pertains to daily operations. The operating budget contains appropriations for such expenditures as personnel, supplies, utilities, materials, travel, and fuel. Operating Transfer Legally authorized transfers from a fund receiving revenue to the fund through which the resources are to be expended. Organizational Unit Financial and budgeting classification for a responsibility unit within a government. Organizational units, which relate to sections in the structure of the LVCVA are the basic unit of the operating budget. Original Cost The invoice amount paid to the supplier of an item plus any other costs incurred to make the item capable of being used. Original cost includes shipping and installation. PERS Abbreviation for Public Employees Retirement System. P/R Abbreviation for public relations. Purchase Order A document authorizing the delivery of specific merchandise or the rendering of specific services. Residual Equity Transfer Nonrecurring or non-routine transfer of equity between funds. It does not represent expenditures of the transferring fund, but may represent the creation or expansion of a fund or the liquidation or contraction of a fund. Resources Total dollars available for appropriations including estimated revenues, fund transfers, and beginning fund balances. Revenue Bonds Bonds that pledge a specific dedicated revenue source for their repayment. Revenues Resource increases from the sale of services or goods derived primarily from normal operations. S.B. 170 The name given to the 5/8% portion of the 1% tax imposed by the Nevada legislature in 1984, which was restricted for the promotion of tourism and special events in Nevada. Salaries and Wages A budget category comprised of all full-time and temporary employee salaries including overtime and retirement payouts. Salvage Value The amount for which the asset could be sold at the end of its useful life. Services and Supplies A budget category that includes those goods and services that are consumed and purchased on a regular basis (i.e. office supplies, utilities, repair and maintenance). 125 GLOSSARY Tangible An item capable of being touched. Useful Life The estimated number of months or years that an asset will be able to be used for the purpose for which it was purchased. 126