Citizen Communications Handout 6 — original pdf

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Larry Akersletter to Visitor Impact Task Force regarding Palmer Events Center Monday, April 24, 2017 1:58:57 PMFelicia,Please forward this letter and the attached document to all the members ofthe VITF. Thanks.Larry--------------------------------------------------------------------------------------------------------------------------Dear VITF members:This is a request that the VITF recommend replace the current subsidyof the operations and maintenance fund for the Palmer Events Center (PEC)via its venue project's car rental tax with funding from the HotalOccupancy Tax (HOT).-- Historic funding for Palmer Auditorium: HOT tax-- Current funding for PEC: venue-associated car rental tax-- Recommended funding: HOT taxThe case for doing so is as follows.Civic events facilities almost never finance their operations solelyfrom event revenues. Prior to the opening of the Palmer Events Center(PEC), the old Palmer Auditorium had its operating deficit covered bythe City's hotel occupancy tax. All participants in the publicprocess that created the Town Lake Community Events Center Venue Project,which included the new PEC, presumed the historical modus operandiwould continue.Voters authorized the capital improvements in the project -- the PEC,its parking garage, and the re-development of the parkland now knownas Butler Park and Auditorium Shores -- to be financed through a newtax on local car rentals. This authorization did not include use ofthe car rental tax to finance PEC operations. The stakeholders whoformulated and directed the project in its initial years neverconsidered that the tax would finance operations. The financial plan for the project formulated by Assistant City ManagerJim Smith specified car rental tax revenues being used solely to financeconstruction of the PEC, garage, and the park. The project's outlays forpark construction would not have been viable otherwise.Nevertheless, in secret sessions that were not disclosed to projectstakeholders until almost four years later and that were not discussedeven with City Council until three years later, bond covenants weredeveloped that overturned this fiscal approach. A "waterfall" schemefor disbursal of car rental tax revenues specified that a fund foroperating the PEC would received priority funding, and park constructionwould get only the leftovers. This expenditure was specificallynot authorized by the vote that created the tax.The proof that this expenditure undermined the financial plan for thepark and venue development came when the development of Butler Park(Phase II of the park developement) was postponed for three years andthe development of Phases III and IV (the western and eastern portionsof Auditorium Shores Park, which were part of the venue) was removedcompletely from the financial forecast for the venue. The Butler Parkdelay initially cost nearly $4 million in additional constructioncosts and foregone donations for Phase II and left it unfinished.Only now has an additional $3.5 million been budgeted to finish theAlliance Children's Garden in Butler Park. Lacking funding,Auditorium Shores was allowed to deteriorate to the point whereprivate donations and a state grant were needed for stopgapimprovements at Auditorium Shores. The great park vision for TownLake Park is yet to be realized, ten years after it was to have beencompleted.A relatively recent letter from original project stakeholders,including the City's project manager, is attached and attests to thishistory and the state of the project.With the HOT tax no longer being burdened by Palmer Events Centeroperations, the Convention Center Department used part of its windfallto initiate its first-of-its-kind bonus income program for itsemployees, effectively shoveling the money that was intended todevelop our great central park into the pockets of its employees.This problem of fiscal misdirection continues to fester and will do sountil the original intent of the voters in the venue project isrestored. The highly questionable legality of the current cash flowscheme places the entire venue project in jeopardy of disciplinefrom the State of Texas.Rapidly escalating HOT tax revenues could easily absorb the operatingdeficit of the PEC and allow the park development to be resumed andthe plan authorized by the voters and City Council to be finally, ifbelatedly, realized. While the PEC bond covenants presume that the O&Mfund for the PEC can be supplied by the car rental tax, nothing preventsthat fund from being supplied by any other revenue stream other thanad valorem taxes.The VITF should therefore recommend that the HOT revenues replace thecar rental tax as a subsidy for our events center operations,restoring the historical precedent and honoring the legalauthorization of the voters for proper expenditure of the car rentaltax dedicated to the capital development of the Town Lake Park VenueProject.Larry AkersStakeholder Representative for The Friends of the Parks of AustinJeff JackStakeholder Representative for Austin Neighborhoods CouncilTown Lake Park Community Events Center Venue Project