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2015-10-22

Court ??? HOT funds, asks for audit

By Judith Pannebaker BCC Editor

During recent budget hearings, Precinct 4 Commissioner Jordan "Jody" Rutherford ex-pressed concern about the almost half a million dollars earmarked for the Bandera County Convention and Visitors Bureau for fiscal year 2015-2016. At that time, he asked whether the CVB budget had even been audited. Rutherford found the "no" answer even more troubling.
On Thursday, Oct. 8, he added to the agenda two items related to the Bandera County Hotel Occupancy Tax (HOT) fund:
• Discuss statutes governing the disbursement of these funds, qualifications of organization receiving funds, procedures for requiring audits for any organization receiving these funds.
• Consider request to change current rules and laws or statutes to allow Bandera County to use funds for capital improvements within Bandera County.
Putting 'heads in beds'
By law, hotels, motels and B&Bs located throughout the county must collect a Hotel Occupancy Tax. The HOT levy - often irreverently referred to as the "heads in beds" or "butts in beds" tax - is imposed on out-of-county visitors who stay overnight in the various facilities.
After determining that the county signs an annual contract enabling the CVB to receive HOT funds, Rutherford asked if other entities had petitioned the court for the funds. Although no one had, apparently anyone can, according to state statutes.
Rutherford then referenced Gillespie County's extensive application for use of HOT funds. "They also have forms given to groups funded by the visitors bureau and require post-event reports presented to Gillespie County Commissioners Court," he said.
Rutherford asked CVB Executive Director Patricia Moore to use similar forms. He also requested a full audit of the CVB, audits of all groups that receive dispersed HOT funds and copies of the groups' income tax reports.
Additionally, Rutherford wanted names of boards of directors, as well as the staff, of the organizations receiving HOT funds through the CVB, apparently questioning an overlapping factor.
"I can get you post-event reports," Moore said, "but I have not required them in the past." Noting that the CVB funds only out-of-county advertising, she said, "We don't produce events per se. We've never allocated funds for sponsoring an activity other than for promotions to allow visitors to enjoy the activity." However, CVB funds had been used to promote individual events such as Cowboy Mardi Gras and those put on by Ridin' the River Cowboy Fellowship.
'What do you
expect to learn?'
Precinct 1 Commissioner Bob Grimes asked Rutherford, "What do you expect to learn? If the CVB reimburses for known (advertising) expenses, what do we learn by asking for tax returns?"
"I want to know how the tax money is being spent and the officers and board members of the organizations," Rutherford replied.
Judge Richard Evans observed, "It's appropriate (to ask the CVB) to produce a certified audit."
All agreed, however, it might be difficult to quantify the number of "heads in beds" generated from each event.
However, Chief Tax Assessor and Collector Gwenda Tschirhart indicated quarterly reports regarding the number of patrons staying overnight might be used. Venues send the collected taxes in quarterly - or, in some cases, monthly.
She forwards the revenues, along with a report indicating who paid and how much, to County Treasurer Billie Reeves. The monthly report is also sent to the CVB.
City staff collects the municipality's percentage of the HOT. Visitors staying in the city pay a tax to both the city and county.
Bandera County began collecting hotel occupancy taxes on Sept. 1, 2003. Since that time, the CVB has received the entire HOT fund from county overnight facilities.
Other uses for HOT?
Regarding the use of HOT funds, Evans said the money could be spent on a visitors' center, but not for other capital improvements.
"In Gillespie County the funds can be used for historical preservation and restoration that promote tourism," Rutherford said. Noting that every county has specific laws that dictate the use of HOT funds, he added, "That money can be used for many items inside a county."
However, because of specific enabling legislation, HOT funds in Bandera County must apparently be spent on out-of-county advertising.
To Rutherford, spending a half a million dollars on advertising year after year seemed a little excessive.
Grimes asked, "All uses must promote tourism activity. The question is how to define historic preservation?"
As one example, Rutherford cited the old jail located at the end of 12th Street. "That's part of the infrastructure of our county," he said. Apparently in other counties HOT funds are being used to fund museums and sports centers, among other tourist draws.
Rutherford said he had asked State Representative District 53 Andrew Murr to assist with legislation that would expand the use of HOT funds within Bandera County.
"I wish the legislature would do a uniform code for the counties," Moore said. She also told the court that she had an appointment that afternoon to interview a possible accounting firm to conduct the audit. "I would welcome a workshop on this," Moore added.
'Focal point
for tourists'
An expansion of the use of HOT funds would enable the county to transform the 1800s courthouse and jail into a "focal point for tourists," Evans said. "With the recent sale of the mohair building, now is the time to come together and get something done in that area."
During a special commissioners court meeting on Thursday, Oct. 15, Evans volunteered to serve on the Friends of the Old Jail Committee. As a community focal point, he envisioned the restored 1881 jail serving as a combination museum, visitors center and office for the Chamber of Commerce.
"We could cut a path down the hill with chairs and benches at different points. At the bottom, the path would go under the bridge into City Park," he said in an interview. "Turning left you could walk to the RV park and strip mall - without facing traffic on Highway 16."
"I want to see the statutes changed in Austin to allow HOT funds to be administered by the court and a visitors center to be staffed by county employees," Rutherford said. "The money should be dispensed (to other entities) solely by the court. Over time, this will amount to several millions of dollars."
Evans said, "This was a good discussion. I assume you'll put this back on the agenda."
"I will," Rutherford said firmly.