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137. Regular Meeting August 9, 2004 Page 6 O'Leary stated the Council previously discussed some options for funding this project without using general property taxes, except for the property tax which the hotel itself generates. He stated the other options would be to create a TIF. He stated the total of this, in year three, will be about $200,000.00 to $215,000.00 in the red, assuming a particular interest rate. He stated there are two other options 1) allocate the Hotel/Motel Taxes, wherein the City currently receives about $815,000 a year or 2) increase the Hotel/Motel tax rate. He stated the Council has the ability to ask the voters to increase the Hotel/Motel tax by an additional 2%, which would generate several hundred thousand dollars. Mr. Thomaides stated the Convention and Visitors Bureau sent the Council a letter asking the Convention and Visitors Bureau budget to not be cut, but to increase it a little bit because in other communities where Mr. Hammons has worked this public-private partnership, there has been a member of the local City Convention and Visitors Bureau who has assisted with the sales and the booking of the Conference Center. He stated a lot of money, which is currently allocated in the Hotel/Motel tax revenues, goes to the Hispanic Chamber. He stated last year the Council set aside $45,000.00 for the Conference Center, which is actually a third option. He stated he feels the Council should increase the Hotel Tax rate. Mr. Taylor stated he feels the Council should plan on using the existing Hotel Occupancy Taxes so we have a plan we can live with, a plan that we can move forward, and in November or May consider increasing the Hotel Occupancy Tax two percent. Mr. Mihalkanin inquired if the Council puts a 2% increase for Hotel Tax rate on the ballot and later the Council finds out it is not needed, can the increase be decreased. Mr. Mark Taylor stated the additional tax has to be connected to a project until the debt is paid off. He stated he would research whether or not the additional 2% tax be decreased if there is no debt. Mr. Mihalkanin stated he supports arranging an election for the citizens to consider an increase in the Hotel Tax rate. He stated he would first like to pursue a TIF. He stated he feels any time the City Government is taking on a debt of any kind, the tax revenue from the debt should be dedicated to paying off the debt. Mr. Bose stated he feels the money from the Hotel/Motel tax is the best way to handle that shortfall. He stated he also feels once the project is taken care, of then the Council should go back and change the increase. Mr. Guerrero stated he is interested in Option 1, redirecting the Hotel/Motel funds. Mayor Narvaiz stated she supports using the current funds, because Staff has been extremely conservative, and she feels there will be more than enough funds. Mayor Narvaiz also stated the consensus of the Council is to vote on a two percent increase of the Hotel/Motel Tax. Mr. O'Leary stated as the figures become clear, the Council might want to decide to sell bonds for this project. Mayor Narvaiz stated Mr. Taylor will be out of town on business on August 23, 2004. She inquired whether the Council would entertain having a Special Meeting on Monday, August 16, 2004, to approve the Memorandum of Understanding. Mr. Mihalkanin stated he feels the Council should have a discussion with the outside attorney regarding the Memorandum of Understanding. Mr. Mark