During Tuesday’s regular meeting, the Kingsville City Commission discussed the possibility of changing its contribution to the John E. Conner Museum from a fixed percentage amount to a flat rate.
Under the current memorandum of understanding between the City of Kingsville and Conner Museum, the city provides funding through monthly payments to the museum equal to 14.285 percent of its Hotel Occupancy Tax, or HOT, revenues.
For Fiscal Year 2018-19, the City of Kingsville budgeted for a $75,000 contribution to the museum, which had to be increased to $85,710 based on an increase in anticipated HOT revenues this year from the budgeted $525,000 to a projected $600,000.
On May 16, the Hotel Occupancy Tax Advisory Board convened and recommended lowering the contribution to the Conner Museum to a flat rate of $30,000 per fiscal year contingent upon HOT revenues reaching $600,000.
If HOT revenues do not reach $600,000, then all non-personnel Tourism Department expenditures, including the museum contribution, would be reduced on a percentage basis.
In addition, the advisory board recommended reserving 5 percent of HOT revenues for Art and Historical funding requests by groups and organizations that contribute to increased hotel occupancy.
The changes would, according to minutes from the board meeting, “help to diversify arts spending and reduce Tourism’s dependence on the fund balance.”
If the Kingsville City Commission approves the recommendations, it would require drafting a new memorandum of understanding with the Conner Museum, which would also need to be approved by the city commission.
During Wednesday’s city commission meeting, Conner Museum Director Jonathan Plant spoke out against the recommended changes to the city’s contribution.
Plant said he had just heard about the proposed changes that afternoon and said he was “completely blindsided.”
Plant serves on the HOT Board that made the recommendation to lower the contribution, although he did not attend the May meeting and did not vote on the proposal.
He said the museum depends heavily on the HOT revenue they receive, which he said pays his salary, for temporary exhibits, promotions and advertising.
Plant also said Conner Museum does not receive any operating support from Texas A&M University-Kingsville outside of the building itself and utilities.
“Without these monies, we would be severely hampered in what we can do,” Plant said.
Plant said the agreement between TAMUK and the city regarding the museum dated back to 1979. He said TAMUK administration and former Kingsville City Manager Jesús Garza had been renegotiating the contribution percentage, but “those talks were discontinued by the city manager.”
“There was no further discussion, no further anything,” he said. “They were just dropped.”
Plant said the university agreed the contribution should be negotiated, “but we were not given any warning, let alone 90 days written notice.”
Friends of Conner Museum member David Christopher also spoke to the city commission on behalf of the museum during Wednesday’s meeting. Christopher said Conner Museum was “a valuable resource” and “a real bargain for our city.”
Later in the meeting, Tourism Director Janine Reyes introduced Texas Hotel Lodging Association President and CEO Scott Joslove, who spoke about the “best practices” regarding the expenditure of Hotel Occupancy Taxes in municipalities.
Joslove said most communities diversify their contributions rather than contributing to just one facility.
“And part of the value of doing that is once people have visited that one facility, when they come back the next trip, you want them to have other facilities that are funded and they can (visit) and extend their stay,” he said.
“So there’s a multitude of reasons to come back, and a multitude of facilities that can be viable. You don’t want to underfund any facility, but if you give it all to (one), then sometimes it becomes an issue of whether that’s going to be the only facility in your community that survives.”
Joslove also said most cities award “an amount certain” rather than a percentage of revenues, which allows the facility to “provide you exactly what they need and the justification for it.”
“And that way, you don’t have an automatic growth indicator that is not related to actual budget requests,” he said.
Joslove said with an “amount certain,” the city could also add a provision to the contract that would allow the amount to be reduced by a proportionate percentage should HOT revenues come in lower than anticipated.
“By having that, they’re put on notice that you can only fund with what you receive and all entities would be subject to that potential reality,” he said.
Following Joslove’s presentation, City Commissioner Dianne Leubert requested the item be pulled to allow the City of Kingsville and Conner Museum to “have some time to negotiate.”
“To see if we can find a common ground for both the museum and Tourism,” she said. “And see if there’s something we can do to expedite this and make sure that everybody’s happy.”
Mayor Sam Fugate said there were still four months left in the current budget cycle.
“So we have time,” he said.
The city commission took no action on the HOT Advisory Board’s recommendation during Wednesday’s meeting.
Anthony Ruiz can be contacted at email@example.com or (361) 221-0251.