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2016-09-15

County retains portion of HOT funds

By Judith Pannebaker BCC Editor

The story began during a special meeting of Bandera County Commissioners Court on Monday, August 29, when the question of determining distribution for the Hotel Occupancy Tax (HOT) funds for fiscal year 2016-2017 was first raised. Two motions died for lack of a second so the item was postponed.
“The rest of the story” resurfaced during a regular meeting on Thursday, Sept. 8. When discussions ended, by a unanimous vote, commissioners had secured 2/5ths of a projected HOT revenue of $391,250. The funds will be used to begin restoration of the historic 1881 jail located on 12th Street. When completed, the old jailhouse would house a visitors center. The historic courthouse would house the welcome center and CVB offices.
You can keep $50K
In anticipation of questions from the court, Bandera County Convention and Visitors Bureau (CVB) Executive Director Patricia Moore had prepared a budget worksheet.
Out of the box, she noted, “The worksheet reflects the county retaining $50,000 of the Hotel Occupancy Tax funds collected in FY 2016-2017.” Moore added, “The $50,000 could be the start of the old jail project.” Prior discussions had put Moore and the CVB Board of Directors on notice that the county planned to reserve a portion of the collected taxes with the only question being “how much.”
Moore also indicated with the Purple Sage Ranch “out of business,” she expected a decrease of $50,000 in HOT funds. She said year-to-date revenues for FY2015-2016 were $381,000, but expected to receive another $10,000 by Sept. 30 – the last day of the fiscal year – bringing total collected revenues to $391,250.
In FY2016-17, administrative expenses for salaries, wages, taxes and insurance will total $127,485 for three fulltime and two part-time employees, who keep the CVB running six days a week. That amount did not increase from this year. Rent and related expenses for the CVB office at 126 Highway 16 South will be $27,500 plus $3,700 for cleaning, lawn maintenance and building repairs in FY2016-2017 – expenses that will be negated when the CVB is housed in the historic jail. Total administrative costs were estimated at $186,574, which includes $160,000 for Bandera on the Road, print media and web advertising.
Advertising,
promotions & sales
The budget for advertising, promotions and sales would be $203,250. However. $20,000 in the 2015-2016 budget for redesigning the website, which debuted in August, was not included in the new budget, but $5,000 for website maintenance was.
Special allocations for out-of-county advertising for local promotional events, which totals $21,600, will include:
• Bandera ProRodeo - $4,000
• Medina Lake Betterment Association Cajun Fest – $3,000
• Bandera Business Association – RiverFest, $3,000; Trail of Lights Holiday Promotion, $600; and Mayhem on the Medina, $3,451
• Bandera Community Foundation - Celebrate Bandera, $3,500
• Bandera County Library Wild Hog Explosion - $3,000
• Bandera County Historical Commission - $1,000
Two organizations, the Frontier Times Museum and the Bandera County Chamber of Commerce, did not request advertising funding from the CVB for next year.
“How do organizations get on the list for funding from the CVB?” asked Precinct 4 Commissioner Jordan “Jody” Rutherford.
Moore explained that the majority of the events have been funded for the “last 15 years or so” and are carried over from year to year. She also said that two-day events receive $3,500 or more while single-day events typically are allocated $3,000. “However, the CVB does not give blank checks for sponsorships of events, Moore said.
Auditor sez:
‘Quid pro quo okay”
To another question from Rutherford, she indicated that two members of the CVB board also serve on boards of organizations that may receive funding from the CVB. According to Moore, however, a local event coordinator does not receive remuneration directly from the CVB.
After reading a quote added to a CVB audit that had been requested by commissioners court, Rutherford asked, “Was that statement for your benefit or mine?” Moore assured him the statement was included by the auditing firm, Coleman, Horton & Company, LLP, of Uvalde.
The statement read: “BCCVB depends on revenues generated in Bandera County. The majority of this revenue comes from visitors in the area. Withdrawal or a reduction in this support would have a detrimental effect on the operations of the organizations.” Rutherford questioned the statement because subjective assessments are not normally included in financial audits.
Moore also explained that several board members and colleagues offer accommodations to visitors, particularly travel operators and journalists, at discounted rates as a quid pro quo for favorable press coverage. As examples, she cited Dianne Lindig Lovett of the Bandera Equestrian Lodge, Mayan Guest Ranch, Backroads Reservations and Flying L.
“Where would that be in the budget?” asked Judge Richard Evans.
“In the ‘Fam Tour and Press Trips’ line item,” Moore replied. That $2,500 reflected the CVB’s discount at various lodgings in the county.
The audit also addressed the quid pro quo, noting: “In the normal course of business, Bandera County Convention & Visitors Bureau, Inc. conducts routine transactions with Board members. None of the transactions, individually or in the aggregate, were considered material to the financial statements.”
Discussions ensued
There followed protracted queries about the final tally of revenues, including whether or not a portion of the CVB fund balance had been used during FY2015-2016 and from where the $50K to be “retained” by the county was listed. At that point, Lovett; Clay Conoly, owner of the Dixie Dude Ranch and a former CVB board member; and DB “Sandy” Vaello, owner of Backroads Reservations, spoke against cutting CVB funding while at the same time recognizing “the value of preserving historic structures.”
After the public statements, Precinct 1 Commissioner Robert “Bob” Grimes noted the economic value of tourism to the county. “The county’s 6 percent share of the occupancy tax equates to $6.5 million in hotel-motel revenues. If people attend events, they bring in another $11 million in revenue. We don’t want that to go away in any way, shape or form,” he said.
“However, the court must decide how to fund the visitors center we approved two weeks ago. While we appreciate the gesture, $50,000 won’t get the ball rolling (on the renovations of the historic jail).”
He recommended using a 2/7th formula used by Gillespie County Commissioners Court – a formula brought up by CVB officials during the special meeting. In Gillespie and other counties, the CVB receives 5/7th of the HOT funds with counties retaining the remainder.
Grimes also noted that since there had been no increase in CVB expenditures for FY2016-2017, any decrease in allocations could been offset by the remainder of the fund balance. “If the decreased allocations impacts the work of the CVB, the court must be responsive to that in the future,” he said, adding, “I see this as a one year opportunity.”
“You’re asking the CVB to fund the renovation project,” Moore rejoined.
“No, we’re asking you to tuck in a little bit for a year or two,” Evans said. “Next year, your budget is only being decreased by $40,000.”
‘I’ll make
motion again’
Using Grimes’ – and the CVB’s – formula, Bandera County would retain approximately $111,714 of the HOT funds during the next fiscal year. That amount, added to the windfall of unclaimed capital credits of approximately $100,000 received this year, would be sufficient to begin the renovation of the historic jail on 12th Street.
After discussions ended, Precinct 2 Commissioner Bobby Harris said, “Last week, I made a motion for the county to allocate 5/7ths of the HOT funds to the CVB and retain 2/7ths for the county and my motion wasn’t seconded. I’ll make the same motion again today.” Rutherford seconded Harris’ motion and it passed unanimously.
And, as Paul Harvey used to say, “And now you know the rest of the story.”