From
Anna Doll
Title
Resolution authorizing the City Manager to submit to the Texas Comptroller's Office Trust Fund an application for reimbursement of state tax revenue acquired from the Bank of America Challenge Championships; approve a contingent professional services contract with Texas Trust Funds and allow the City to use its 1% sales tax to reimburse a portion of certain costs associated with the Bank of America Challenge Championship
Presenter
Anna Doll, Deputy City Manager
Recommended Action
Approve
Analysis
Under Vernon's Texas Civil Statutes Article 5190.14 and Article 398, the state of Texas has established a mechanism to promote and fund national and international events in the state through the contribution to the host city or county a portion of the state sales tax revenue generated from the event. An Economic Impact Study is required to analyze and project the increase in sales tax revenue associated with the event.
The Texas Comptroller is authorized to deposit in a separate account state tax revenues from qualified events. After the event, the host city or county can request and receive reimbursement of defined costs from the State Comptroller's Office from the sales tax deposited, to the extent that these deposits are matched by the deposit of local sales tax revenues ($1 in local sales tax revenue for each $6.25 in state sales tax revenue).
The 2015 Bank of America Challenge Championship for American Quarter Horse racing is similar to the Breeders Cup Championships for thoroughbred racing. Regional qualifiers from ten geographic regions located in the US, Canada and Mexico compete in six championships with total purse of $1,250,000.
These races are rotated throughout the country. Lone Star Park hosted this event in 2002 and 2006, and attracted 7,300 fan and 8,100 fans respectively. Competitive bidding for hosting this event takes place annually. The final selection is made by the American Quarter Horse Association (AQHA) Racing Council and Executive Committee.
Lone Star Park is requesting that the City submit an application to the Texas Comptroller for approval to receive funding from the Events Trust Fund. The applicant for this funding must be the City not Lone Star Park.
Financial Consideration
1) The AQHA requires the host park to contribute the following:
a) Purse $250,000
b) Minimum advertising expenditure of $100,000 (to be matched the AQHA)
2) In addition the City will be using the services of Texas Trust Funds, a professional accounting firm, to aid in the application process and complete the Economic and Tax Impact Study. The Texas Trust Funds contract is a contingent contract with a graduated fee based on the amount of reimbursement actually received by the city up to a maximum of $15,000. The consultant will only be paid if funding for reimbursement is received from the Texas Events Fund.
3) The City will be requesting up to $365,000 for reimbursement from the Texas Events Fund. The priority for reimbursement will be a) the Texas Trust Funds consulting contract, b) the purse and c) the advertising. If the sales tax does not cover these costs, Lone Star Park will be responsible under a separate contract with the city for paying all purse and advertising costs required by the AQHA.
Body
A RESOLUTION OF THE CITY OF GRAND PRAIRIE, TEXAS, AUTHORIZING THE CITY MANAGER TO SUBMIT DOCUMENTS TO THE TEXAS COMPTROLLER'S OFFICE TRUST FUND TO REQUEST THE REIMBURSEMENT OF STATE TAX REVENUE ACQUIRED FROM THE 2015 Bank of America Challenge Championships
WHEREAS, The City of Grand Prairie finds it in the best interest of the citizens of Grand Prairie that the 2015 Bank of America Challenge Championships is held in the City of Grand Prairie at Lone Star Park and
WHEREAS, the City of Grand Prairie agrees that the reimbursement of state tax revenue from the events will provide the City of Grand Prairie with the funds to more fully sponsor the event, and
WHEREAS, the City of Grand Prairie designates the City Manager or his designee as the authorized official with the power to apply for, accept, reject, alter or terminate the request for reimbursement of state tax revenue on behalf of the City of Grand Prairie.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS:
SECTION 1. THAT the City of Grand Prairie authorizes the City Manager or his designee to submit an application and supporting documents to the Texas Comptroller's Office Event Trust Fund requesting the reimbursement of state tax revenue generated from the 2015 Bank of America Challenge Championships.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 5TH DAY OF AUGUST, 2014.