Council approves DMO hotel‑tax contract increase, directs city manager to negotiate KPIs and address $17,000 clawback

The San Angelo City Council voted 7‑0 Sept. 2 to authorize the city manager to negotiate and execute a new contract with the Destination Marketing Organization (DMO) to use hotel occupancy tax receipts for eligible activities and to set the DMO budget at roughly $1,049,498.

Chamber and DMO leaders told the council the additional funding would allow more proactive sales and marketing, targeted advertising and an expanded effort to recruit conventions, sporting events and associations. ‘‘We have continued our partnership . . . and this contract will allow us to be more proactive in going after prospects and new businesses,’’ a chamber representative said.

DMO vice president Jeremy Bartz presented 2025‑through‑Q2 metrics showing visitor activity and sales bookings. He told the council Datafy analytics indicate roughly 800,000 total trips into the city through Q2, about 1.9 million visitor days and an average stay of 2.5 nights. The DMO reported 67 sales bookings through June 2025 that represented about 14,400 room nights. Bartz also highlighted a secured West Texas Judges Convention for April 2027 and attributed recent targeted ad work with early attribution of about 4,800 trips and an estimated $680,000 economic impact from that campaign alone.

Council discussion focused on contract KPIs, quarterly reporting, a $17,000 clawback tied to unspent hotel‑tax advances and how to handle restricted occupancy tax funds. City staff explained occupancy tax revenue is legally restricted, that advances are sometimes made early for cash flow, and that unspent restricted funds historically return to the city; staff proposed either formalizing an earmark or allowing a restricted fund balance so the DMO can retain the amount for a stated purpose, subject to council approval. The city manager was directed to negotiate the contract with the increased amount and to bring back a proposal for the handling of the $17,000 clawback.

Councilmember Patrick and others asked that staff target youth‑sports tournaments and other event categories to increase room nights; staff said sports and tournament targets are constrained by facility inventory (indoor volleyball/basketball space) but that the DMO will pursue relationships and incentives for sports events.

Why it matters: Hotel‑occupancy tax funds support tourism promotion and events that generate local sales tax and business activity. The council approved a larger DMO budget to step up marketing and sales efforts, while insisting on KPIs, quarterly accountability and transparent handling of restricted hotel‑tax funds.