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Town consultant outlines Hotel‑Motel tax flow under 2007 MOU, remaining funds directed to Callaway for tourism promotion
Summary
At a Feb. 17 work session, Mr. Pat Keating summarized the Memorandum of Understanding for the Town of Pine Mountain’s Hotel‑Motel taxes tied to the Development Authority of Harris County Revenue Bonds, explaining a ranked flow of funds that prioritizes debt service and reserves before distributions to the town and to Callaway for tourism promotion.
Mr. Pat Keating explained the Memorandum of Understanding governing Hotel‑Motel tax revenue that relates to the Development Authority of Harris County Taxable Revenue Bonds, Series 2007. Keating described the ranked order in which receipts are applied under the current MOU and related trust indenture.
Keating said the order of distribution begins with amounts to pay interest and principal on the bonds, then to replenish the Debt Service Reserve (to a stated target of $275,000) and to pay the trustee’s annual fee. Next in the priority is a payment to the Town of Pine Mountain equal to the greater of 6% of gross hotel‑motel taxes collected or $12,500, followed by two 3% distributions (described in the MOU as pre‑2005 and post‑2005 allocations). Keating noted a Supplemental Reserve target of $125,000 that is replenished before other allocations, and that remaining amounts will first cover any shortfalls and then be paid to Callaway for use solely to promote, attract, stimulate and develop conventions and tourism in the Pine Mountain area, including related infrastructure projects.
Keating referenced the 2007 Trust Indenture and the MOU’s section 3(b) when describing how Callaway may use funds. The transcript records the bond aggregate principal amount as $6,990,000 and identifies the trustee as Wells Fargo National Bank Association. Keating framed the distributions as mechanical priorities established by the MOU and the trust documents rather than new policy decisions by the council.
Betsy Sivell, Town Clerk, is listed in the session attendance; the transcript also names James W. Trott, Jr., and records that Frankie Mabry and Thomas E. Scott were not in attendance. The session record shows the work session ended at approximately 11:32 a.m.
The presentation did not record motions or votes. No formal changes to the MOU or the trust indenture were proposed or adopted during the session; the discussion was an explanation of existing contractual and priority payment language.
