Tourism board funds, CVB reserves and use of hotel‑occupancy tax for public safety discussed

Council and staff reviewed proposed tourism (hotel‑occupancy) fund distributions, an updated CVB balance sheet and a tourism fund reserve. Staff said the local CVB reported reserves of about $4 million and the city’s tourism fund balance (city‑controlled portion) was about $1.8 million. Staff also noted they reduced the previously contemplated $500,000 midyear transfer to general fund for public safety in the current draft budget.

Several council members and staff discussed whether hotel‑occupancy tax (“HOT”) dollars could be used to reimburse city costs for staffing and services provided during events and peak visitor periods. Staff cautioned that current state rules and the Texas legislative framework limit eligible HOT expenditures; they said the city could pursue an exception through the 2027 legislative session but that doing so would be uncertain and potentially politically challenging. Staff also said the Hot awards and CVB allocations shown in the tourism budget are subject to legal review; one council member asked staff to confirm whether certain capital items could qualify under arts or historic categories.

No council action to repurpose HOT revenue was taken; staff said they would continue discussions, confirm legal opinions and coordinate with the CVB and tourism board on the budget and any midyear requests.