The Killeen city attorney’s office has refused to provide financial information to the Herald that demonstrate how public tax funds are used to finance Killeen Arts Commission awards.

“The City of Killeen seeks to withhold the information from public disclosure because it believes it is protected by one or more of the exceptions found within sections 552.101 through 552.154 of the Texas Government Code,” according to the letter dated Aug. 29 seeking an opinion from the attorney general on whether all or some of the information requested by the newspaper is exempt from the Texas Public Information Act.

Personnel information, litigation, bidding, real estate, legal issues, crime scene images, birth and death records, student records, financial securities, audit working papers, personally identifying information, certain vehicle records, some economic development information, and certain crime victim records are all covered by those sections of the Texas Government Code.

On Aug. 19, the Herald requested that the city release all applications for Killeen Arts Commission (KAC) grant money in fiscal year 2022, both accepted and denied. It also requested that the city produce any documentation demonstrating if controls are in place to guarantee that public monies are used properly and appropriately, such as receipts, reports, and investment-return statements for KAC events.

According to Texas law, the recipient of a public records request must respond to the requester within 10 business days. If it is unable to fulfil that deadline, it must tell the requester when the material will be released. If it feels any of the requested materials are not protected by the Texas Public Information Act, it must typically get a decision from the attorney general.

The Herald requested municipal spokesperson Janell Ford, City Manager Kent Cagle, and City Attorney Holli Clements on Monday to specify which elements of the open records request they feel are exempt, proposing to accept the material with redactions. The Herald has not gotten a response as of Tuesday morning.

However, Councilman Jose Segarra informed the newspaper that “for every $3,000… awarded, groups that use hotel occupancy tax income are obliged to present documentation to the city that they had at least one guest overnight at one of our hotels.” Otherwise, they will face a penalty.” adding that “applicants are also needed to show confirmation that they are a 501(c)(3) with current verification from the state and a letter of exemption from the Internal Revenue Service from the current year when they apply for financing.”

Segarra further stated that the city “does not pay for 100% of the event expenses, and the reason some charge is because they are compelled to offer a match based on the amount of the grant.” So, some charge at the event, while others locate the match through other ways, such as sponsoring.”

The city has approved $259,668 in financing.

On August 23, Killeen City Council members authorised $259,668 in KAC grant funds for 27 events in fiscal year 2022-23. These activities are primarily funded by hotel occupancy tax income and money from the American Rescue Plan Act.

In an Aug. 16 staff report, Interim Executive Director of Finance Judith Tangalin wrote to City Manager Kent Cagle, “One of the primary responsibilities of the Arts Commission is to make recommendations to City Council regarding the allocation of hotel occupancy tax funds that are designated for grants to the arts.” “The use of local hotel occupancy taxes is governed by Texas Tax Code Chapter 351.” To spend municipal hotel occupancy tax income, Section 351.101 requires two requirements to be satisfied.”

According to the staff study, expenditures must promote tourism and the convention and hotel business, and they must fall into one of nine statutorily defined areas.

One of the nine areas is the encouragement, development, improvement, and application of the arts. The amount of hotel occupancy tax money allocated for the arts is limited to 15% of total hotel occupancy tax revenue collected under Section 351.103(c).”

According to Tangalin’s report, nine organisations submitted grant applications to the city’s arts commission in June.

“The Arts Commission examined the events suggested by grant applicants in accordance with the Arts Commission Grant Allocation Policy established by City Council on April 14, 2020.” “One request was rejected.”

Recipients of grants

Armed Forces Natural Hair and Health ($92,245), IMPAC Outreach ($46,691), Vive Les Arts Societe ($41,226), Songhai Bamboo Roots Association (29,407), Vive Les Arts Children’s Theatre ($20,772), Killeen Sister Cities, Osan, Korea Committee ($12,295), KZamore Foundation ($5,554), and Artesania y Cultura Hispana ($4,478) are the approved

This fiscal year, the city spent $37,167 in HOT money and $192,455 in ARPA funding for a total of $229,662 to pay various KAC activities. According to the state comptroller’s website, communities in Texas may utilise HOT money “only to actively promote tourism and the convention/hotel business.” “This implies that the funds should be used for initiatives or activities that result in tourists or participants staying overnight in the city, earning extra hotel occupancy tax.”

The state hotel occupancy tax is 6%, while the Killeen rate is 7%, for a total room tax of 13%.

HOT income represents for 1.1% of overall municipal revenue. HOT funding is expected to total more than $3.1 million in the proposed 2023 budget, down from almost $3.6 million this fiscal year. This value was around $2.7 million in fiscal year 2020-21.

ARPA, a roughly $2.9 trillion economic stimulus plan signed into law by President Joe Biden in 2021, gave $350 billion from the Coronavirus State and Municipal Fiscal Recovery Fund to state and local governments.