Title
Approving an ordinance on second reading with the caption reading: AN ORDINANCE OF THE CITY OF PFLUGERVILLE, TEXAS, REGARDING THE COLLECTION OF HOTEL OCCUPANCY TAXES WITHIN THE CITY; PROVIDING FOR A FINE OR PENALTY OF THIS ORDINANCE AS A MISDEMEANOR NOT TO EXCEED $500.00 FOR EACH OFFENSE, EXCEPT HOWEVER, WHERE A DIFFERENT PENALTY HAS BEEN ESTABLISHED BY STATE LAW FOR SUCH OFFENSE, IN WHICH EVENT THE PENALTY SHALL BE FIXED BY STATE LAW AND IF DEEMED A VIOLATION OF ANY PROVISIONAL LAW THAT GOVERNS FIRE SAFETY, ZONING, OR PUBLIC HEALTH AND SANITATION, THE PENALTY SHALL NOT EXCEED THE SUM OF $2,000.00 FOR EACH OFFENSE; PROVIDING A SAVINGS, REPEALER, SEVERABILITY, AND EFFECTIVE DATE CLAUSES.
Summary
The City Council approved performance and economic development agreements for Project Vinyl, a Best Western Plus hotel, on February 25, 2014. Since that time, per Pflugerville Community Development Corporation (PCDC) staff, development activity has been occurring for this project with an opening date sometime in the first quarter of 2015.
In anticipation of this hotel, staff, with the assistance of the City Attorney, has researched the procedures and regulations for establishing a hotel occupancy tax (HOT) for the City of Pflugerville. The approval of this ordinance which establishes the maximum allowable rate of 7% is the initial step. The ordinance includes definitions and requirements for certain actions by the city. Staff has been developing forms for registration of the hotels and working on policies and procedures for recording and reporting HOT revenues and expenditures in the Special Revenue fund, State comptroller reports and assistance, and establishing auditing schedules. HOT payments are made quarterly and accompanied by a form developed by the State comptroller.
Staff is also becoming familiar with the permitted uses of the HOT tax. Generally, they are:
1. Funding the establishment, improvement, or maintenance of a convention center or visitor information center.
2. Paying the administrative costs for facilitating convention registration.
3. Paying for advertising, solicitations, and promotions that attract tourists and convention delegates to the city or its vicinity.
4. Expenditures that promote the arts.
5. Funding historical restoration or preservation programs.
6. Funding transportation systems for tourists.
7. Signage directing tourists to sights and attractions that are visited frequently by hotel guests in the municipality.
Deadline for City Council Action
There is no deadline for action on this item.
Previous City Council Action
This ordinance was approved on first reading at the May 13, 2014 City Council meeting.
Projected Future City Council Action
None after approval of the ordinance on second reading.
Fiscal Impact
PCDC staff provided the following parameters that were used in an estimate of HOT that would be received from the Best Western Plus - 80 rooms with an average room rate of $80/ night at a 65% occupancy rate. Using these numbers and computing the maximum 7% HOT, annual revenue would equal $106,288.
Staff Recommendation
Approve the ordinance on second reading.
Drafter
Lauri Gillam
Assistant City Manager