The Forney City Council's July 2nd agenda included discussing and considering approval of the distribution of fiscal year 2014 hotel occupancy tax (HOT) funds but a decision was never made. Instead, many council members demanded a better accounting of the HOT funds and one council member alleged insider profiting and self-dealing.
According to the State of Texas Tax Code, “Revenue from the municipal hotel occupancy tax may be used only to promote tourism and the convention and hotel industry.”
Council member Ray Stephens started off the debate by raising his concern for a declining HOT funds budget next year and the payment to the Chamber of Commerce for the annual chamber auction. Although Stephens voiced his support for the chamber, he said the auction was not used to promote tourism and was only a fundraising event for the chamber.
“When money gets tight we all have to cut. And I know for a small chamber, $6,122 for phone bills for the chamber ... and $2,000 for auto expenses and mileage for such a small organization. Maybe they can cut back on this, and this, and this, to offset the money for our auction, that $5,580, that you’re not going to get next year. Then we can roll that $5,580 into another one of these other organizations that we can get more bang for our buck,” said Stephens. Council member Hobbs immediately agreed with Stephens and said there needs to be more accountability.
Council member Andy Parker questioned the legality of the chamber’s use of the fund based on the Tax Code. “I can’t fit the auction within the statutory slots that we have to fit that in to. Only in a very broad sense can we say that the auction contributes to tourism because the proceeds of the auction get used for general chamber activities ... The purpose of the auction is not to promote tourism, it is to raise money,” he said.
Council member Andy Parker then brought up the use of the funds given to the Forney Home Town Christmas (FHTC) committee. In 2010 and 2011, the HOT funds were paid by the City of Forney on invoices submitted by the FHTC committee. However, in 2012, the City of Forney wrote only one check to the FHTC committee so the committee could pay invoices directly.
Related: Forney City Council wants changes made to Home Town Christmas event
“I think we also need to be satisfied that there is no self-dealing with respect to funds which the city distributes to these organizations. Case in point, I noticed with the Forney Home Town Christmas that monies were spent for advertising in the Forney Post. Now there’s nothing wrong with that except the fact that one of the three persons responsible for making that decision owns the Forney Post [Denise Bell]. Well this is, in my book, self-dealing, are we going to allow this going forward?” asked Parker.
Parker continued, “I don’t think I have to remind this council that we were all chastised very severely in the prior election with charges that we are a corrupt council. Apparently all of that was predicated on the fact that the city was doing business with a company which employed one of our council members. That council member had nothing to do with the decisions, had no economic benefit from that decision. So if that is our definition of corruption, then what are we to call the situation where one of the persons participating in the decision has an immediate and direct economic benefit?"
In an editorial in the Forney Post, Denise Bell wrote, "Let it be said very clearly. I have never managed or handled the financial affairs of Forney’s Hometown Christmas. I, nor any employee of The Forney Post, has ever managed, handled or voted upon the distribution of advertising funds for the FHTC Committee." When called for comment, Forney Chamber of Commerce President Tom Belobraydic said, "The Forney Home Town Christmas was the brain child of Ryan Kile, Susan Seabolt, and Denise Bell. They made all the decisions and those decisions were final."
Bell continued in her editorial, "The Forney Hometown Christmas Committee, as an official committee of the Forney Chamber of Commerce, has for ten years worked with the staff of the City of Forney to bring this community a finely coordinated and organized Christmas event." However, when asked about the relationship with the chamber, Belobraydic said, "The chamber had no official capacity prior to 2013. We have never gone through any expenses or invoices [for FHTC] but we will in the future. Currently, we review the financials from every [chamber] event monthly."
According to sources familiar with the FHTC expense report, in 2012 the Forney Post, owned by FHTC committee member Denise Bell, was paid approximately $600 for advertising for Forney Home Town Christmas. The Forney Messenger also reports that an employee of the Post was also apparently paid for services. Full Disclosure: The Forney Messenger was reportedly paid $650 for their advertising of the event. inForney.com did not receive advertising from this event although a quote was submitted on October 22, 2012.
After much discussion, the Forney City Council chose to table the current discussion and later hold a workshop to develop guidelines, accountaiblity measures, and discuss distribution of the 2014 HOT funds.