HomeMy WebLinkAboutIR 10400 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 20-10400
To the Mayor and Members of the City Council April 24, 2020
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-a SUBJECT: DEFERRAL OF HOTEL OCCUPANCY TAXES AND TOURISM PUBLIC
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The purpose of this Informal Report is to provide the City Council information on a request from the Hotel
Association of Tarrant County (HATC). The HATC has requested that the City of Fort Worth follow the
State of Texas in providing a deferral period to hotels that delays the requirement for them to make
payment of Hotel Occupancy Taxes (HOT) and Tourism Public Improvement Payments (TPID) without
accumulating interest,penalties, or other fees.
As you are aware and as was reported by the City Manager at the April 7 City Council meeting, one of the
industries hardest hit by the COVID-19 situation has been the tourism business and specifically the hotel
industry. In Fort Worth we have seen the hotel occupancy rate drop from approximately 80% to single
digits. In some cases, hotels have closed because they were losing too much money to stay open without
the guests. At this time the biggest issue for businesses is the need for cash so that they may have an
opportunity to stay in business.
City staff held a conference with Julie Faver-Dylia, Executive Director of the Hotel Association of Tarrant
County and Scott Joslove with the Texas Hotel and Lodging Association on April 3rd to discuss the request
to defer payments. After our discussions, City staff agreed to make a recommendation to the City Council
to take action approving a deferral period on the payment of HOT and TPID assessments and not apply any
fees or penalties as outlined below:
• The City will defer HOT payments beginning with payments due in May (April HOT) and TPID
payments beginning with payments due in March (February TPID);
• The deferral period will take effect upon adoption of appropriate ordinances and resolutions by the
City Council and end 90 days after a stay at home or shelter in place order applicable to the City of
Fort Worth is lifted or September 1, 2020,whichever occurs first;
• Any interest and penalties that have already accrued for delinquent HOT payments will be frozen,
and any interest and penalties for delinquent TPID assessments from the months of February and
March will be waived;
• At the end of the deferral period, all HOT and TPID assessments will be considered due and typical
fees and penalties will apply beginning on that date;
The revenues from the local HOT were pledged to bonds the City issued for the construction of Dickies
Arena. Staff analyzed the financial situation and determined that granting a deferral as proposed would not
interfere with the City's ability to make the debt service payments that will become due the brief period
while the deferral is in effect. In addition, by allowing the hotels to defer payments in the short term, the
City will be aiding in their liquidity and assisting them in their efforts to survive the current situation,
thereby enhancing HOT as a revenue source in the longer term. Based on these factors and the fact that the
full amount of HOT would be due and payable after the deferral ends, the City's Bond Counsel determined
that a deferral would be allowable under the terms of the Arena bonds.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 20-10400
To the Mayor and Members of the City Council April 24, 2020
Page 2 of 2
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SUBJECT: DEFERRAL OF HOTEL OCCUPANCY TAXES AND TOURISM PUBLIC
r rA IMPROVEMENT DISTRICT PAYMENTS WITHOUT PENALTY
As a condition of the deferral, the hoteliers will be required to report their gross and net room revenue
(gross room revenue subject to HOT less allowable exemptions) during the deferral period so the City can
record a receivable to track the amount due and payable. This information will also provide valuable
insight into the pace of recovery of the travel and tourism industries.
Staff will be placing an agenda item on the May 5, 2020 City Council agenda to provide for a HOT and
TPID payment deferral period as outlined above.
If you have any questions or concerns related to this effort, please contact Jay Chapa, Assistant City
Manager at 817-392-5804.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS