Dripping Springs council doles out more than $400k in HOT funds

On Oct.16, the Dripping Springs City Council approved Hotel Occupancy Tax funds for local organizations that promote and attract visitors to the city.

The Dripping Springs Visitors Bureau, the Brent Thurman Foundation, Friends of the Pound House Foundation, The Hill Country Alliance, and  Saxet Gun Show were granted funds from HOT, according to agreements shared by Andrea Cunningham, Dripping Springs city secretary.

In the city council’s approved  2017-2018 budget, which was approved Sept. 19, the total HOT funds are $426,392.05, according to budget documents on the city’s website.

The HOT is collected from guests “who rent a room or space in a hotel costing $15 or more each day,” according to Glenn Hegar, Texas Comptroller’s website, comptroller.texas.gov.

Guests pay a state HOT, as well as any tax imposed by cities and municipalities.

Spaces rented in apartments, homes, condominiums and bed and breakfasts also must apply a tax.

Dripping Springs’ HOT rate is 7 percent of the cost of the room, City Administrator Michelle Fischer said.

The city does not have statistics to determine which events bring in the most hotel tax revenue, since the hotel tax is collected monthly and in some cases quarterly, Fischer said.

Cunningham said there are often misconceptions about how HOT funds can be spent. Under Texas law, HOT funds can only be used to promote tourism.

Cities which use HOT funds must follow strict guidelines on how it can be spent. The state has nine criteria to which cities must adhere when allocating HOT funds.

HOT funds cannot be used for roads or infrastructure.

In the application for the funds, which had to be submitted to the city council by Aug. 4, organizations are required to state how many visitors were expected to attend the event and how many were going to be staying overnight at a hotel, motel, or bed and breakfast, according to the city’s website.

The Visitors Bureau, a private nonprofit organization, received the most funding with $135,000 because of the amount of promotions it provides on behalf of the city, Gina Gillis, city treasurer said.

In the agreement between the Visitors Bureau and the city, the funds are to be used for operational costs like salaries, utilities and administrative costs.  

It is also meant to be used for advertisement and other publications that attract visitors from at least 75 miles of the city limits.

Pam Owens, president and CEO of the Visitors Bureau, says the city has a built in audience every weekend due to the weddings that are held in the area.

According to destinationdrippingsprings.com, the area hosts over 3,500 wedding a year.

Another draw to the area is the  trifecta of wineries, breweries and distilleries, Owens said.

For Bell Springs Winery, at least half of their visitors are people from out of town looking for an escape in the Hill Country, said Carrie Conwill, winery experience manager at Bell Springs Winery.

The winery is part of the Dripping Wine Trail that connects Bell Springs Winery with Westcave Cellars Winery and Hawk’s Shadow Winery, all within 20 miles of each other.

Another recipient of HOT tax funds is the Dripping Springs Ranch Park, which received $90,000 dollars to go toward paying off debt for its construction.

The Friends of the Pound House received $2,500 dollars to purchase and install new wall paper for the Pound House.

Whether paying off debt, or infrastructure improvements, Fischer said the funds can only be used if the end result is to bring visitors who will stay overnight in the city.

Hotel Occupancy Tax Funds

Balance Fwd from previous year: $65,692.05

Revenue

  • Hotel Occupancy Tax: $360,000
  • Interest: $700
  • Total: $426,392.05

Expenses

  • Dripping Springs Visitors Bureau $135,000
  • Txf To Debt Service $90,295
  • Txf To Event Center $90,000
  • Txdot Wayfinding Signs $20,000
  • Christmas Lighting Displays $15,000
  • Ds Fair And Rodeo $10,000
  • Street Signs $10,000
  • Hotel Association $7,000
  • Advertising $5,000
  • Hill Country Alliance/ Rainwater Revival/ Hill Country Living $3,000
  • Historic Brochure $3,000
  • Ofr District Signage $3,000
  • Thurman Mansion $3,000
  • Pound House $2,500
  • Economic Development Committee $2,500
  • Saxet Gun Show $2,000
  • National Register Plaques $1,100
  • Christmas Light Trail $600
  • Founders Day $0

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