HOT fund expert discusses issue that impacts CofC and tourism
by Gary Kent
Jul 28, 2012 | 1285 views | 0 0 comments | 6 6 recommendations | email to a friend | print
BEEVILLE — Russell Gallahan confirmed what City Attorney Frank Warner has been saying for months when he spoke to about 18 individuals Wednesday about how hotel and motel tax money can be used.

HOT funds, as they are called, must ultimately “put heads in beds,” Gallahan said during a noon meeting.

That means they should be used to encourage visitors to spend a night or two in a local hotel or motel.

Gallahan works in the Economic Development and Analysis Division of State Comptroller Susan Combs’ office in Austin.

He was invited to come to Beeville a few weeks ago after Beeville Main Street Manager Michelle Wright heard him speak at a training session she attended.

Also present at the Beeville Community Center for the presentation were several Bee County Chamber of Commerce board members. The chamber recently allowed the expiration of an agreement with the City Council that would have authorized the chamber to keep collecting a portion of the city’s HOT funds.

The disagreement with the city has been over a demand by the chamber to add the words “for cause” to any stipulation that would allow either party to end the contract for the funds with proper written notice.

The council does not want to add “for cause” to the language of the agreement because that could result in court litigation in the event that the city desires to end the contract.

“The Bee County Chamber of Commerce and Tourism Center will still promote and perform tourism-related events and functions utilizing HOT funds requested through the application process set forth by the city,” CofC Board President Scott Childress said after Wednesday’s meeting.

Some local organizations apply for funds to assist in advertising community events that could put heads in beds. The council grants most of those requests.

“The Tourism Center will still abide by, as it had been the last 25-plus years under the HOT (fund) contract, the regulations and reporting requirements within the law,” Childress said.

“Just because the chamber and the city were unable to come to terms with a new HOT (fund) contract does not mean the chamber’s Tourism Center will not welcome guests from out of town into our office and cater to events that put heads in beds. As we’ve stated before, we look forward to working with the city and local organizations to provide support in an effort to drive in visitors to Beeville and Bee County.”

City Council members initially started looking at the HOT funds agreement with the chamber after some councilmen expressed concerns over the chamber using part of that money for salaries.

However, Gallahan said a portion of HOT funds could legally be used to pay for operations, administration, travel, office space, salaries, supplies and training.

The question, Gallahan said, would be what percentage of the funds is used for those expenses.

Some examples of percentages that would be allowable included advertisements (up to 15 percent), historic preservation (up to 15 percent and up to 50 percent if the community has no convention center), and arts (up to 15 percent).

Gallahan recommended that the city check with its attorney to make sure it is spending HOT funds correctly.

Warner has diligently read every application for HOT funds and often has recommended deleting some requests because he felt they did not qualify under state law.

Gary Kent is a reporter at the Bee-Picayune and can be reached at 358-2550, ext. 120, or at
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