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HomeMy WebLinkAboutOrdinance 21934-09-2015 ORDINANCE NO. 21934-09-2015 AN ORDINANCE AMENDING SECTION 32-17 OF THE CODE OF THE CITY OF FORT WORTH, TEXAS (2015), AS AMENDED, TO SPECIFY THAT MOTEL OCCUPANCY TAX REVENUES MAY BE EXPENDED FOR ANY PURPOSES PERMITTED BY STATE LAW; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Section 32-17(a) of the Code of the City of Fort Worth (2015), as amended (the "City Code")provides for the levy of a hotel occupancy tax at a rate of 9% of the cost of a hotel room; and WHEREAS, Section 32-17(d) of the City Code specifies that hotel occupancy tax revenues derived from the application of the tax at a rate of more than 7% of the cost of a hotel room may be used only for the construction of an expansion of a convention center facility or pledging payment of revenue or revenue refunding bonds issued for such a project; and WHEREAS, Section 351.1065 of the Texas Tax Code now also permits the City to expend hotel occupancy tax revenues derived from the application of the tax at a rate of more than 7% of the cost of a hotel room for costs of qualified projects, as that term is defined in Section 351.1015 of the Texas Tax Code; and WHEREAS, the City Council now wishes to amend Section 32-17 of the City Code to provide that the City may expend such hotel occupancy tax revenues for costs of qualified projects, as permitted by the Texas Tax Code; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,TEXAS: SECTION 1. Subsection (d) of Section 32-17 (Levy; Rate, Disposition of Revenue; Exceptions) of the City Code is hereby amended to read as follows: (d) The amount of revenue from the tax that is derived from the application of the tax at a rate of more than 7% of the cost of a room, and any interest income therefrom, shall be used only for the construction of an expansion of an existing convention center facility, for a qualified project to which Section 351.1015, Texas Tax Code, applies, or for pledging payment of revenue or revenue refunding bonds issued in accordance with state law for the construction of the expansion of an existing convention center facility or for a qualified project. The city shall attempt to include minority-owned businesses in the issuance of at least 32% of the total dollar value of the bonds issued, and in at least 32% of the total fees paid by the issuer, in connection with the construction. Ordinance No. 21934-09-2015 Page 1 of 2 SECTION 2. This Ordinance shall be cumulative of all provisions of all other ordinances, except where the provisions of this Ordinance are in direct conflict with the provisions of such ordinances, in which event conflicting; provisions of such ordinances are hereby repealed. SECTION 3. It is hereby declared to be the intention of the City Council that the sections, paragraphs, sentences, clauses and phrases of this Ordinance are severable, and if any phrase, clause, sentence, paragraph or section of this Ordinance shall be declared void, ineffective or unconstitutional by the valid judgment or decree of any court of competent jurisdiction, such voidness, ineffectiveness or unconstitutionality shall not effect any of the remaining phrases, clauses, sentences, paragraphs and sections of this Ordinance, since the same would have been enacted by the City Council without the incorporation in this Ordinance of any such void, ineffective or unconstitutional phrase, clause, sentence, paragraph or section. SECTION 4. This Ordinance shall take effect and be in full force and effect from and after its passage, and it is so ordained. APPROVED AS TO FORM AND LEGALITY: ,. ,..�-� Denis cElro , Assistant City Attorney ary a .er, i Secretary M&C: G-18578 ADOPTED AND EFFECTIVE: September 29, 2015 Ordinance No. 21934-09-2015 Page 2 of 2 City of Fort Worth, Texas Mayor and Council Communication 11111111111111i1ON0101 IY�WWIIIIIIIIIIIIm01000100M000000ulillll IiWIiUWWIIIII�W0 11 0 1 0 11111111�Im0mNWNUIWIIINmluuuuuNWIWWIOii Illili0lW0 �dM COUNCIL ACTION: Approved on 9/2912015 - Ordinance No. 21932-09=2015, 21933-09-2015 & 21934-09-2015 DATE: Tuesday„ September 29, 2015 REFERENCE NO.: G-18578 LOG NAME: 25TRANSFER FUND x2015 SUBJECT: Adopt Ordinance Amending Section 3 -17 of Chapter 32, Article II "Hotel Occupancy Tax" of City to Add Qualified Projects as Allowable Expenditures for Hotel Occupancy Taxes, Ratify Use of $2,468,858.00 from Unspent Debt Proceeds for a Portion of isc I Year 2015 Culture and Tourism Debt Service Payments, Amend the Fiscal Year 2016 Budget for the Culture and Tourism % City HOT Fund, Authorize Actions Making $5,068,858.00 Available in the Culture and Tourism Capital Projects Fund for the Multipurpose Arena Project, Ratify Use of Unspent Debt Proceeds to Make Available an Additional $4,044,792.,00 for the Arena Project,, and Adopt Appropriation Ordinances, Thereby Making a Total of 113,650.00 Available for the Arena Project (COUNCIL DISTRICT 7) RECOMMENDATION: It is recommended that the City Council, 1. Adopt the attached ordinance amending Section -17 of Chapter 32, Article II "Hotel Occupancy Tax" of City Code of the City of Fort Worth (2015) as amended, to be consistent with State law by adding qualified projects as allowable expenditures for hotel occupancy taxes in excess of seven percent„ . Adopt the attached appropriation ordinance increasing Fiscal Year 2015 receipts and appropriations in the Culture and Tourism Fund in the amount of$2,600,000.00 from available fund balance for purposes of making a transfer to the Culture and Tourism Capital Projects Fund in support of the Arena Project, . Authorize the transfer of$2,600,000.00 from Culture and Tourism Fund to the Culture and Tourism Capital Projects Fund in Fiscal Year 2015; 4. Ratify the use and transfer of$2,468,858.00 from unspent debt proceeds from the Culture and Tourism Capital Projects Fund to the Culture and Tourism Debt Service Fund to cover a portion of the Fiscal Year 2015 debt service payments, thereby creating a surplus in that Fund which will be used to pay debt service on other outstanding obligations in Fiscal Year 1 5. Amend the Fiscal Year 2016 Budget for the Culture and Tourism 2% City HOT (Hotel Occupancy ax) Fund by reducing Debt Transfer Out- Principal - Convention Center and Will Rogers Memorial) Center in the amount of$2,468,858.00 and increasing Capital Transfer- Pay as You Go Capital in the amount of $2,468,858.00 for use on the Arena Project„ 6. Ratify the use of ,792.00 from unspent debt proceeds in the Culture and Tourism Capital Projects Fund for the Fiscal Year 2015 pay-as-you-go capital portion of the tl am No. 21Tower Drive Project, replenishing unrestricted cash in the Public Events Capital Projects Fund in the same amount for use on the Multipurpose Arena Project,; and 7. Adopt the attached appropriation ordinance increasing receipts and appropriations in the Culture and 1,o ri ame: 25TRANSFERFTJN DS2015 Pagel of 3 Tourism Capital Projects Fund in the amount of$5,068,858.00 from transferred revenues, resulting in a total of$9,113,650.00 being available in the Capital Projects Fund for the Arena Project in Fiscal Year 2015. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to take actions and realign resources in order to facilitate the City's initial funding for the Multipurpose Arena and associated venue project in accordance with the recently adopted Preliminary Funding Plan (Funding Plan) (Resolution No. 4498-08- 2015). Actions include amending the City Code to take advantage of recent state-law changes that provide greater flexibility in the use of a portion of the City's Hotel Occupancy Tax (HOT) revenue and reallocating certain expenditures among available funding sources in order to free up resources in preparation of the City's initial transfer into the project fund, which will occur following ERP go-live and the establishment of dedicated funds and accounts for the project. Amending City Code: Since 1995, the City has been authorized to collect HOT at the rate of nine percent of the cost of a room. However, the use of revenues from HOT imposed at a rate of more than seven percent is limited under state law. In 2013, state law was amended to expand the list of allowed uses to include a "qualified project," which is a defined concept that encompasses the Venue Project that includes the New Multipurpose Arena adjacent to the Will Rogers Memorial Center (WRMC). Approval of this M&C will amend the Code of the City of Fort Worth to add qualified projects as allowable expenditures for hotel occupancy taxes in excess of seven percent. Reallocating Resources: This M&C will also take actions to begin implementation of the Council-approved funding plan adopted via Resolution No. 4498-08-2015. The Funding Plan anticipated initial funding and on-going contributions for the Arena. The initial allocation of funds involves adjusting the programming of unspent bond proceeds, excess capital project funding, fund balance, and current revenue. Unspent Debt Proceeds and Related Issues: Earlier this year in the process of cleaning-up capital projects and funds, Staff identified unspent debt proceeds of$7.7 million from the 2010 Certificates of Obligation (COs) that were issued to fund the WRMC Multipurpose Equestrian Building at WRMC (project surplus). Following review of FY2015 and FY2016 budgets and planned expenditures and discussions with bond counsel, Staff proposes the debt proceeds be programmed as follows: • $456,569.80— Previously spent on Cattle Barn No. 2 Change Order (M&C C-27290) and miscellaneous eligible capital projects • $4,044,792.00 — Be substituted as the funding source for eligible FY2015 pay-as-you-go capital projects at WRMC, thereby creating excess capital funding in that amount in the Culture and Tourism Capital Projects Fund originally budgeted for those projects (Recommendation 5) • $2,468,858 — Substituted as the funding for FY2015 debt service payments on the 2010 COs, creating a surplus in the Debt Service Fund to make FY2016 debt service payments on other debt and make available that same amount in the Culture and Tourism City 2% HOT Fund originally budgeted for those payments (Recommendation 4 and 6) Logname: 25TRANSFER FUNDS2015 Page 2 of 3 • $1,178,194.00®To be transferred in FY2016 for debt service payrnents on the 2010 COs in accordance with adopted FY2016 budget (October 27) Fund Balance: As of this date, the Culture and Tourism Fund has available excess fund balance for the appropriation and 'transfer of$2.6 million to the Culture and Tourism Capital Projects Fund for the arena project. Approval of this M&C (Recommendations 2, 3, and 7) moves that amount to the Capital Projects Fund as a holding place until dedicated project funds and accounts are established for the project following ERP go-live,, The transferred fund balance when added with to the $6,513,584.00 identified In the second and third bullet points above, constitutes a total of$9,113,650.00 that is allocated to the Arena Project by adoption of this M&C. Next Steps: On October 27, 2015, Staff anticipates bringing back an M&C to move money from the Culture and Tourism Capital Projects Fund to dedicated project funds and the accounts that will be established following go-live of the ERP 11 system, In addition to the money identified and allocated in this Co M& Staff anticipates that an additional $3,085,609.00 in fund balance will be available in the Culture and Tourism Fund following the close of FY2015, meaning a total anticipated transfer of$12,199,250.00 is expected to be recommended on that date. That M&C will also move the remaining unspent debt proceeds identified in the final bullet point above to the Debt Service Fund for the purpose of paying a portion of the FY2016 debt as anticipated by the FY2016 budget, The project is physically located in COUNCIL DISTRICT 7, but will serve Fort Worth residents in ALL COUNCIL DISTRICTS. FISCAL INFORMATION I CERTIFICATION: The Financial Management Services Director certifies that upon approval oft e above recommendations, funds will be available in the current capital budget, as appropriated, of the Culture and Tourism Capital Projects Fund and the Culture and Tourism Operating Fund. ................................. FUND CENTERS: TO Fund/Account/Centers FROM Fund/Account/Centers, QG04 538040 0241000 X2,600,000.00 3 QL04 538040 02.41000 600000.0 Q 3)) C302 476004 240000400415 $2000 009M 7 C30 476004 240000400415 35,066,353.00 ZD_Q302 541200 2400004(LQ41a Y 5 068 8,58M _ ... ...... .......... ........... ...........-—.................................- .......... CERTIFICATIONS: Submitted for City Susan Alanis (81 80) Orii�inating Department Head.: Kirk Slaughter (2501) Additional Information Contact: Betty Tanner (2502) ................. ...... Lognrang: 25°l RA 1JJND52015 Page 3 of.