Summary: Willow Park is preparing to spend about $31K of its HOT funds for billboard advertising on the billboard in front of the new City Hall on El Chico Trail. And they are NOT using any citizen tax money. Now, that is good fiscal management. And the City is just starting...
Latest Update: 08 December 2023; posted Wednesday, 29 November, 2023
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Willow Park HOT Tax to Hot Idea: City Billboard
Willow Park is preparing to spend about $31K of its HOT tax for billboard advertising on the billboard in front of the new City Hall on El Chico Trail. And they are NOT using any citizen tax money. Now, that is good fiscal management.
Willow Park has two hotels, that generate Local Hotel Occupancy Taxes (HOT), Baymont by Wyndham Willow Park at 5080 E Interstate 20 Service Rd S and SpringHill Suites by Marriott at 500 Shops Blvd, Willow Park.
The purpose of the local HOT tax is to "promote tourism and the convention and hotel industry" -- to put "heads in beds." However, this HOT revenue may ONLY be used to promote tourism and the convention and hotel industries; there are very detailed projects for the HOT finds usage, including "Signage directing public to sights and attractions that are visited by hotel guests."
During the 28 November 2023 Council Meeting, (15:04 on the meeting video) the City Manager Grimes reported
• The City has $498K total funds in the City's HOT funds account.
• The City has used $0 of these HOT funds, which has no deadline for spending.
• In 2022, the City's hotels collected $254 in HOT tax.
• This year, the City's hotels are collecting $21K a month in HOT.
During the Council meeting, the City introduced several ideas on how to spend the City's HOT funds on billboard advertising.
In addition, the Council is considering
• other ways of using the City HOT funds for advertising our two hotels
• other ways of using HOT funds for other activities that will including the possibility of "putting heads in beds"
• forming a new City HOT Board, similar to the Planning and Zoning Commission, to research and advise the City on uses for the City's HOT funds.
This process of spending HOT funds to grow the CITY is just starting, and Willow Park Civics will report it all.
• Sources
• Council meeting Review, The Community News, 01 December 2023. City to use HOT funds for billboard advertising; Next step for Country Hollow; EDA Extension
The billboard near Willow Park City Hall is now a HOT topic.
At its meeting on Tuesday, Nov. 28, the Willow Park City Council approved the use of hotel occupancy taxes (HOT) to pay for advertising on the billboard situated to the southeast corner of City Hall, which is at 120 El Chico Tr.
Mayor Pro Tem Lea Young had proposed to the council and city staff that they find ways in which the city’s HOT could practically and legally be put to good use.
So, city staff contacted Lamar Billboards to inquire about rental of the sign. They learned that the cost to rent it is $31,680 per side on an annual basis, billed in four 13-week installments, including the initial cost of $480 for artwork. Thereafter, each time the city requests a change in artwork, it would cost an additional $480.
“I think the only way to justify the expense (of the billboard) is to use the HOT tax,” Young said, urging council and staff to come up with ideas on what should be promoted on the billboard.
Place 3 Council Member Greg Runnebaum added, “I can see this being used for golf tournaments, football games, a lot of things.”
The lease on the westbound sign is set to expire on Feb. 11, with a priority for renewal. The eastbound sign was originally believed to be available on Nov. 11, but it appears that contract has been extended and city officials believe the westbound sign serves the city better.
So council approved funds for the westbound sign when it does become available and the contract with Lamar would begin on that date.
“I’d like for us to consider doing this for 12 months. We’ve got to get in line,” Mayor Doyle Moss told the council before the official vote.
City Attorney Pat Chesser reminded the council if HOT is used for the billboard it has to be to promote tourism.
“In other words, you’ve got to put heads in beds,” he said.
City Manager Bryan Grimes noted that the HOT fund is currently almost $500,000 and is growing at a rate of $21,000 per month from the city’s two hotels. He added that another hotel or two is likely coming in the future.
“This fund is just going to keep getting bigger and bigger,” he said.
City staff has also looked into buying the sign, though Lamar rarely sells their billboards. However, the city was approached with a proposal to replace the current sign with a digital one.
Doing so would require a 25-year lease to allow the conversion. It would also come with some perks for the city, such as discounted advertising costs, negotiable advertising revenue (tentatively, 10% in perpetuity for the 25-year term), and “branding of the pole,” an opportunity for a city monument without the digital display cost which staff research showed could cost over $300,000.
• Comptroller of Texas
• Economy > Economic Development > Local Hotel Occupancy Tax Overview
The variety of lodging options available in Texas is as diverse as the Lone Star State itself, ranging from traditional hotels and motels to trendy treehouses and tiny houses. But no matter the differences in these accommodations, they all have one thing in common: they are all subject to Texas’ State Hotel Occupancy Tax.
In addition, cities and counties in Texas can levy a Local Hotel Occupancy Tax. Both taxes are commonly referred to as HOT.
The purpose of the local hotel occupancy tax is to promote tourism and the convention and hotel industry. Texas Tax Code Chapter 351 and Tax Code Chapter 352 give municipalities the authorization to levy a tax on a person who pays for the use of a hotel room, as defined by Tax Code Chapter 156.
• Economy > Fiscal Notes > A Review of the Texas Economy > The Hotel Occupancy Tax > A Short History of a Complex Levy
When booking lodging in Texas, you’re often spoiled for choice — lots of beds at lots of different prices. But however much you spend, you’re also contributing to the state and local governments by paying combined hotel occupancy taxes of anywhere from 6 to 17.5 percent, depending on where you stay.
• Taxes > Hotel Occupancy Tax > Who Is Responsible For This Tax?
Hotel owners, operators or managers must collect state hotel occupancy tax from their guests who rent a room or space in a hotel costing $15 or more each day. The tax applies not only to hotels and motels, but also to bed and breakfasts, condominiums, apartments and houses. Local hotel taxes apply to sleeping rooms costing $2 or more each day.
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