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Woodcreek forms HOT Committee

By Megan Wehring 

WOODCREEK — A Hotel Occupancy Tax (HOT) Committee was established in the small community of Woodcreek to explore the possibility of implementing a HOT rate. 

On Oct. 26, 2022, Wimberley City Council postponed voting on the HOT Ordinance to allow for the creation of a HOT Committee. The formation of the committee was unanimously approved in order to advise the council on aspects of collecting and spending the funds received from the tax if it were passed. 

“All that has been done is the formation of a Hotel Occupancy Tax Committee to evaluate whether the city of Woodcreek should or should not look into raising the hotel occupancy tax,” said city manager Kevin Rule. “If they do decide that yes, it would be beneficial for the city, then they would come up with a recommendation of what that rate would be and present that to the council.”

Hotel owners, operators or managers are required to collect state HOT from guests who rent a room or space in a hotel, according to the Texas Comptroller of Public Accounts. The state’s HOT rate is 6% of the cost of a room. Bed and breakfasts, condominiums, apartments and houses are also applied to this tax. 

If the city were to pass a HOT, hotel operators would be required to pay both the state and city rates.

“When they file their quarterly or monthly reports, they would file one to the state for the 6% and they would file one to the city for whatever the percentage that would be,” Rule said. “It is the overnight guest that is paying the HOT and it is the operator of that facility that takes that money and gives it to the state and/or the city as well.”

“One caveat on that is that we can allow the lodging group to keep 1% of the HOT for their own administrative purposes,” Rasco said. “If they want to do marketing for their venue, they can come to the city for a grant for marketing funds or if they want to do an event, we can assist with that.”

A 2016 survey by the Texas Comptroller’s office found that most cities may impose a HOT rate of up to 7% and certain cities that fund a convention center may collect an additional 2%. Depending on the committee’s recommendation, the city of Woodcreek could consider imposing a rate of 7% to match neighboring Wimberley.

On Jan. 11, Wimberley City Council approved the first set of committee members: Lynnsey Hastie, Ann-Tyler Konradi, Cherri Maley, Tomas Palm, Danny Ross and Mike Schneider. Additional appointments will be made at the upcoming city council meeting on Wednesday, Jan. 25 at 4 p.m. 

While the city has not approved a HOT, some residents are still skeptical.

“We are all family-owned businesses; we are mom-and-pops,” said Albert Valera, owner of Cypress Creek Cottages. “Our livelihoods are tied to this. A 7% increase by the city of our rates will drive less occupancy for us.” 

Valera and Hunter Jones, general managers of the Lodge at Cypress Falls, have been in business in Woodcreek’s extraterritorial jurisdiction for about 15 years. 

“[Woodcreek] is 600 rooftops in a retirement community where the 55 and older population represents 80.4% of the total population that they have. Do you think that retirees want Airbnbs running through their little city streets?” Valera said. “These people just want to be left alone. They really want traffic control [and]streets that don’t have all of the potholes that they have. They want the city to basically manage like an HOA.”

Living through Woodcreek’s previous implementation of a HOT that ran from 2008 to 2013, the business owners have concerns about the possibility of the city reenacting the rate.

“It was a disaster in the sense that well over $100,000 was spent and no additional overnight tourism was generated,” Valera said. 

Mayor Jeff Rasco said that during the initial period of the HOT, between 2008 and 2013, the city did not do “a very good job” at finding ways to spend the funds collected from the tax that fit into the state guidelines. 

In addition, Valera does not feel like there has been open communication between city officials and lodging owners. 

“The lodging people are the only ones that pay that tax [and have]told the city that there are only three of us,” Valera said. “We are not interested in that tax. You haven’t sold us on why we would need it. … We have no outlet and no way to share what our problems are.”

Local HOT revenue may only be used to promote tourism and the convention/hotel industries, the Texas Comptroller of Public Accounts stated. The following projects may be funded with local HOT revenue:

• Constructing, improving, enlarging, equipping, repairing, operating and maintaining a convention center or visitor information center

• Furnishing of facilities, personnel and materials for the registration of convention delegates or registrants

• Advertising and conducting promotional programs to attract tourists and convention delegates or registrants

• The encouragement, promotion, improvement and application of the arts

• Historical restoration and preservation projects or advertising and conducting promotional programs to encourage tourists to visit preserved historic sites or museums

• Expenses related to a sporting event in which a majority of participants are tourists

• The enhancement and upgrade of existing sports facilities or fields

• Constructing, improving, enlarging, equipping, repairing, operating and maintaining a coliseum or multi-use facility

• Signage directing the public to sights and attractions that are visited by hotel guests

The city of Woodcreek would not be the only one in the area to have a HOT if it were passed. Kyle, Buda, Dripping Springs and Wimberley are all set at 7% and San Marcos is set at 9%. 

“It is not something new or outrageous,” Rule said. “The majority of the cities do have one.”

The HOT Committee is slated to have its first meeting in February.

The Hays Free Press/News-Dispatch is monitoring the Hotel Occupancy Tax situation in the city of Woodcreek. We will continue to update the public as more information becomes available. 

About Author

Megan Navarro (formerly Wehring) graduated from Texas State University in May 2020 with a bachelor's degree in journalism and mass communication. In June 2020, she started a summer internship at the Hays Free Press/News-Dispatch through the Dow Jones News Fund and Texas Press Association. She then earned her way to a reporter position later that summer and now, she serves as the editor of the newspaper. Working for a small publication, Navarro wears multiple hats. She has various responsibilities including managing a team of reporters, making editorial decisions, overseeing social media posts, fact checking, writing her own articles and more. Navarro has a heart for storytelling and she believes that journalists are equipped to share the stories that are important to the community.

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