HOT accusations simmer, legality questioned
Wimberley City Councilmember Patricia Cantu-Kelly accused the Wimberley Valley Chamber of Commerce, Convention Center and Visitors Bureau of misusing Hotel Occupancy Tax funds during last week’s city council meeting.
The council ultimately voted 3-0 to request that the chamber return the full amount “since they didn’t perform to the contract,” as Mayor Susan Jaggers stated while summarizing the motion made by Cantu-Kelly. Gary Barchfeld, Mike Mc-Cullough and Cantu-Kelly were the only council members present at the meeting.
“We regret and disagree with the actions chosen by the city council and will address these issues with our board of directors as soon as possible,” the chamber said in a statement. “As always we will continue to support our community and promote tourism.”
Cantu-Kelly said that the visitor’s bureau, which is operated by the chamber, did not fulfill its contract with the city. The city paid $50,000 to support for visitor’s bureau services. As the contract stipulated, a portion of the funds paid for 25 percent of the salaries of two chamber employees for their time spent overseeing the visitor’s bureau. The chamber returned the remaining HOT money, about $12,000, after the tax was dropped to zero percent earlier this year.
“The services paid for were not delivered and cannot be delivered retroactively,” Cantu Kelly said.
“…(It) violates the state statues and city HOT committee guidelines... I am requesting the remaining funds of $38,000 be returned to the city HOT account effective immediately.”
Cantu-Kelly said that the chamber had not reached out to lodging operators who are not chamber members in order to include them in the chamber’s visitor services. The contract required that the chamber represent all lodging operators, but it is not clear what actions were required to achieve that.
The chamber told council members that the $38,000 was used to pay for a portion of salaries for those overseeing the visitor’s bureau. Some council members asserted that it was not a legal use of HOT funds.
The Wimberley View spoke with multiple people, from outside of Wimberley, who are involved in the use of HOT funds, and all stated that paying for a portion of salaries for those overseeing a visitor’s bureau is legal, though none of the people questioned were familiar with the particulars of the contract between the city and the chamber.
The Texas Municipal League has guidelines for cities to follow on HOT funds, which includes a section on the use of fund for administrative salaries.
“These expenses may include supplies, salaries, office rental, travel expenses, and other administrative costs. However, these costs may be reimbursed only if the expenses are incurred in the promotion and servicing of expenditures authorized under the hotel occupancy tax laws. The portion of the administrative costs that are covered should not exceed the percentage of the cost that is attributable to the activity funded by the hotel occupancy tax. For example, administrators who spend 33 percent of their time overseeing hotel occupancy tax funded programs should seek funding for no more than 33 percent of their salary or 33 percent of other related overhead costs.”
There was some question as to whether or not the council meeting had a legal quorum, which would have nullified any of the action taken during the meeting. Regularly scheduled council meetings require three of the five members to be available while Special Meetings require four of five to be available for a quorum.
While this meeting was called a “Special Meeting” because it was held at a different time than normal, it was actually a rescheduled Regular Meeting due to Labor Day the week prior.
“The policy for Regular Meetings contemplates postponing a regular meeting to a different date and time for a valid reason and upon an attempt to contact all members of City Council,” City Administrator Shawn Cox said in an email. The reason for postponing the meeting from the 6th of September to the 11th of September was because of the Labor Day holiday on the week of the 6th. All members of the City Council were contacted regarding this postponement. Based on the policy the meeting on the 11th was a regular meeting of the City Council properly held on a date other than the first Thursday of the Month. As such a quorum of three City Council members was all that was needed to conduct business.”
The city requested that the chamber return the money by October 1.