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Benjamin Spillman

Authority projects revenue increase in face of downturn

9 April 2008

LAS VEGAS, Nevada -- A national recession could be bad news for resort owners, but the booster group that promotes Las Vegas isn't projecting a downturn in its nearly $300 million budget.

On Tuesday, staff members of the Las Vegas Convention and Visitors Authority gave board members their first peek at the organization's projected budget for the 2009 fiscal year.

The budget proposal projects a 5 percent revenue increase in 2009 to $299 million, and calls for 2 percent increases each in marketing and advertising for a combined total of nearly $126 million to spend promoting Las Vegas as a destination.

The budget item was for board members' information only. They did not vote on the proposal, and there was no discussion.

The authority also got an update on the political landscape from President and Chief Executive Officer Rossi Ralenkotter.

The update came in the form of a proposal to hire the lobbying firm Jones Vargas to represent the authority in Carson City.

Authority supporters have been spending lots of energy in the capital fighting off proposals to solve Nevada's budget problems by diverting room tax money from tourism promotion to education, roads and other programs.

"All the discussions always include a room-tax component," Ralenkotter said. "We need to be diligent to protect our room-tax revenue."

That diligence will cost the authority $15,000 a month when the Legislature is out of session and $20,000 a month when lawmakers are working. If the lobbyists succeed, however, they will have saved the authority millions of dollars.

Room-tax rates now average 9 percent in Clark County. According to the convention authority, room taxes collected in fiscal year 2007 were more than $397.7 million. Of that total, the convention authority used 47 percent, or $191.9 million. Meanwhile 53 percent, or $205.8 million, went into total community support, including $72.6 million that was distributed to the Southern Nevada municipalities.

The convention authority has projected room taxes will reach $456.3 million in fiscal 2009 and $571.8 million by 2012.

Brenda Siddall, the authority's finance director, presented other fiscal housekeeping items to the board, including a proposal to announce its intention to back $300 million in bonds to support road improvements in Southern Nevada and a report on the need to shift $1.1 million to cover an unexpected increase in utility costs.

Siddall said the unplanned utility spike was due largely to power consumption during the machine-heavy Association of Woodworking and Furnishing Suppliers show at the Las Vegas Convention Center in July, a time of hot temperatures and peak energy rates.

Since then the authority has installed better monitoring equipment to avoid future surprises, she said.

"We believe we will be able to track our energy use better," Siddall said.

Siddall also briefly touched on the public health scandal stemming from unsafe practices at local clinics that potentially exposed thousands of local residents to disease.

She suggested the board amend the authority's self-funded health plan to cover tests for employees who received letters saying they may have been exposed.

The amendment could cost as much as $50,000, but Siddall said it won't affect premiums because the plan has adequate reserves to absorb the cost.