September 18, 2019 759 PM
MARFA — Hotel Saint George has made new payments toward their outstanding hotel occupancy tax and hotelier Tim Crowley is “operating in good faith,” Co-Interim City Administrator Dan Dunlap announced Monday at a city budget workshop.
Since the city discovered the Saint George is estimated to owe over $100,000 in overdue Hotel Occupancy Tax payments, Dunlap has met with the hotel owner multiple times in an effort to collect overdue monies.
In a report to council, Dunlap said the Hotel Saint George had paid over $33,000 this week, with more checks expected to come before the weekend. “We have a pretty good idea of how much they owe us because [Councilmember Yoseff Ben-Yehuda] and I found a way to go on the comptroller’s website and get the hotel’s receipt and calculate,” he said.
In the past, the city has relied on hotel, motel and short term rental owners to be honest and submit their hotel occupancy tax payments by check on time to the city. Only then does the city accountant generate an invoice that matches their dollar amount.
However, the calculations Dunlap and Councilmember Ben-Yehuda discovered could allow them to generate invoices for businesses ahead of time, keeping better track of delinquent payments. Dunlap said he’s already used the method to generate the missing invoices for the Hotel Saint George. (Those generated invoices have not been delivered to the hotel yet but are in the city’s system to represent incoming revenue.)
Ben-Yehuda asked Dunlap if the invoices he made included the five percent compounding penalty for late payments that Marfa’s Hotel Occupancy Tax Ordinance currently has. Dunlap said no.
“We’ve never charged a late fee,” he said — adding that once the city starts charging late fees, they will apply to everyone.
Ben-Yehuda pushed back, stressing that the delinquency of the Hotel Saint George’s tax payments was unprecedented in terms of their lateness and size.
“We’ve never had a situation with this much missing for this long as far as I know.” he said, describing the late payments as “a material loss for the city” because Marfa would have gained interest on the payments if they had been paid on time.”
Mayor Baeza chimed in, saying city officials would have further conversations about going forward with the five percent charge “equally across the board,” at the September 26 city meeting.
But council members struggled to discern which Saint George payments applied to which fiscal year, and Ben-Yehuda pointed out that it was impacting the way the city was projecting future HOT revenues, especially as the city worked to make plans for the 2019-2020 budget.
“We were doing the honor system,” Mayor Baeza said, describing the collection of HOT payments. “We’re going to improve our process going forward.”
During the Tuesday council meeting, no specific plans emerged to implement more oversight. “The issue is, we just don’t have the staff to do it,” Dunlap said.
Councilmember Natalie Melendez said she’d learned there had been a system monitoring HOT payments in the past, but it was not kept up “because there’s not enough hours in the day.”
The city has budgeted to hire a full time accountant in the coming fiscal year, but council might wait until a new city manager has been hired before making these financial oversight decisions.
“An interesting side effect to all of this is that when the newspaper put this all out, there’s been a rush at City Hall by other HOT fund payers to get in and get their payments in as well,” Dunlap noted.
But no one, it seems, was in a situation quite like Hotel Saint George. Payments by other entities were made after last week’s issue, city documents show, but none of those payments were delinquent.