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San Marcos council backs hotel‑tax plan for historic preservation and one‑time community enhancement pilots
Summary
Council supported staff plans to use hotel occupancy tax to fund city historic preservation (Dunbar/home‑economics building first) and approved moving forward with pilot projects using community‑enhancement funds for an I‑35 façade/wayfinding pilot and a fence project near Sunset Acres.
At the Feb. 26 budget workshop, staff asked the council whether to set policy guidance for allocating hotel occupancy tax revenues to specific city priorities. The hotel tax (7% for the city plus a 2% venue tax) can fund tourism promotion, arts, convention center operations and certain historic preservation projects under state law.
Historic preservation: Staff proposed using a portion of hotel‑tax revenues to support city historic‑restoration projects and recommended an initial allocation to complete work on the Dunbar (home‑economics) building. Councilmembers supported a policy to prioritize city‑owned historic properties first and asked staff to return with a list of candidate properties, cost estimates and an application or prioritization process so the council can weigh equity and public benefit when selecting projects.
Community enhancement pilots: Council also reviewed proposals to use existing community enhancement fund balance for two pilot projects — a grant‑style façade/wayfinding pilot for businesses along I‑35 and a fence and maintenance pilot along I‑35 near Sunset Acres to address aesthetics and neighborhood conditions. Councilmembers favored advancing both pilots, with Sunset Acres identified as an immediate priority. Staff said they will design program rules (including reimbursement‑based grants and local‑vendor preferences where procurement law allows) and return with implementation details.
Why it matters: Using hotel tax and one‑time enhancement fund balance for city‑owned historic projects and short, visible neighborhood pilots shifts some costs away from the general fund and provides a targeted way to deliver community improvements while council balances broader budget pressures.
Next steps: Staff will bring a historic‑preservation policy and a prioritized list of city properties (with cost estimates) back to council and will refine the enhancement pilot designs with procurement and program rules for local participation.
