Eight nonprofits ask for nearly $456,000 in Killeen Arts Commission grant funding

Eight nonprofit organizations asked the Killeen Arts Commission for almost $456,000 in grant funding, including taxpayers’ money, before that figure was cut by more than half through its scoring system.

And on Tuesday, Killeen City Council members will consider whether to approve using hotel occupancy tax revenue and American Rescue Plan Act money for those grants.

“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,” Interim Executive Director of Finance Judith Tangalin wrote to City Manager Kent Cagle in an Aug. 16 staff report. “Texas Tax Code Chapter 351 governs the use of municipal hotel occupancy taxes. Section 351.101 requires two criteria be met to expend municipal hotel occupancy tax revenue.”

The criteria: Expenditures must promote tourism and the convention and hotel industry, and they must meet one of nine statutorily provided categories, according to the staff report.

“The encouragement, promotion, improvement, and application of the arts is one of the nine categories. Section 351.103(c) limits the amount of hotel occupancy tax revenue used for the arts to 15% of total hotel occupancy tax revenue collected.”

In June, nine organizations provided their grant applications to the city’s arts commission, Tangalin said in the report.

“The events proposed by the grant applicants were evaluated by the Arts Commission following the Arts Commission Grant Allocation Policy adopted by City Council on April 14, 2020. One request was disqualified.”

The applicants

The approved applicants are 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).

The grant applications total $259,668 for 27 events in fiscal year 2022-23. But when the organizations submitted their requests, that figure totaled $455,763. It was reduced by application evaluations by members of the KAC board — at least two of whom are involved with a pair of applying nonprofits. They are Luvina Sabree of Armed Forces Natural Hair and Health and Darlene Golden of Songhai Bamboo Roots Association. Golden is chair, and Sabree is vice-chair.

It is not clear how KAC board members — the others are John Miller, Erin Hughley, Van Fraley, Angela Galbreth, Monique Brand, Regina Mitchell and Christopher Brown, according to the city’s website — evaluate and score applicants. The Herald has requested revenue and expense reports from each KAC grant applicant for the last two fiscal years under the Texas Public Information Act.

Miller told the Herald in October 2020 that KAC members complete ballots and each is granted a score. The rating sheet includes a set of criteria, described as ranging from artistic to economic: Does a program promote tourism and the convention industry? Does it have artistic merit, and related areas?

After the members complete their individual ballots, they are submitted to the city, and staffers score and apply weight to them. From there, they calculate how much money each applicant should receive.

Financial accounting

The newspaper has also asked the city to provide financial documents officials review in determining whether to approve grant funding for KAC applicants, and that was considered a request under the Texas Public Information Act. By Friday afternoon, those documents had not been received.

The Herald also asked council members Roman Alvarez, Riakos Adams, Jessica Gonzalez, Mayor Debbie Nash-King, Ken Wilkerson, Jose Segarra, Michael Boyd and Nina Cobb to answer questions about KAC’s financial accountability.

By Friday afternoon, only Segarra responded. Here are the questions and his answers:

Q: What is the justification for using hotel occupancy tax revenue to partially fund one-day events or those that do not draw tourists for overnight stays?

A; “Organizations that use hotel occupancy tax revenue are required to submit proof to the city that they had at least one person staying at one of our hotels for every $3,000 ... granted. Otherwise, they are subject to a penalty.”

Q: What policies or procedures are used to ensure that KAC grant recipients are 501(c)(3) organizations under the Internal Revenue Code and that they are current on their tax returns?

A: “Applicants are also required to submit proof when they apply for funding that they are a 501(c)(3) with current verification from the state and a letter of exemption from the current year from the Internal Revenue Service.”

Q: At some KAC-funded events, visitors are charged admission prices. Why is that necessary when these organizations are already subsidized by taxpayer dollars?

A: “The city of Killeen does not pay for 100% of the events expense and the reason some charge is because they a required to provide a match depending on the amount of the grant. So, some charge at the event and some find the match through other means such as finding sponsors.”

HOT/ARPA funding

The city on March 25 and April 15 hosted workshops on grant applications, according to documents. Following the application deadline of April 22, KAC “evaluated” the applications on June 10 and “reviewed” them on July 8. Those come off the most recent grant cycle in which seven organizations — Vive Les Arts Societe; Killeen Sister Cities, Osan, Korea, Committee; Armed Forces Natural Hair and Health; Vive Les Arts Children’s Theatre; Songhai Bamboo Roots Association; IMPAC Outreach; and The Crossroads to Texas Quilt — received $229,622 from Killeen HOT revenue and ARPA funding.

President Joe Biden signed ARPA into law in 2021 — a nearly $2.9 trillion economic stimulus bill that allocated $350 billion from the Coronavirus State and Local Fiscal Recovery Fund for state and local governments.

This fiscal year, the city used $37,167 in HOT revenue and $192,455 in ARPA funding for the $229,662 total used to fund several KAC events. Under Texas law, municipalities may use HOT money “only to directly promote tourism and the convention/hotel industry,” according to the state comptroller’s website. “This means the proceeds should be spent on projects or events that result in visitors or attendees staying overnight in the community, generating more hotel occupancy tax.”

The state hotel occupancy tax rate is 6%, and the Killeen rate is 7% — for a total tax on rooms of 13%.

HOT revenue accounts for 1.1% of the city’s total revenue. In the proposed 2023 budget, officials expect to receive more than $3.1 million in HOT money — down from almost $3.6 million this fiscal year. In fiscal year 2020-21, that figure was about $2.7 million.

2023 events

The planned events by KAC grant applicants in the fiscal year that starts on Oct. 1 are:

Vive Les Arts Societe — “Elf,” “Spamalot,” “Chemical Imbalance,” “The Wizard of Oz,” “Come From Away”

Armed Forces Natural Hair and Health — Armed Forces Natural Hair and Health Expo, Veggie and Art Fest, Killeen Black Art and Film Festival, Summer Fest

KZamore Foundation — Art Showcase and Jazz Community Brunch, Stage Play

IMPAC Outreach — African American Art and History Showcase, Taste of Africa, Rhythm & Vibes: Killeen Poetry Slam, Inspired Voice Narrative Project, WordFest

Killeen Sister Cities, Osan, Korea, Committee — International Festival, Cultural Exchange

Vive Les Arts Children’s Theatre — “James and the Giant Peach,” “The Little Mermaid,” “Missoula Children’s Theatre”

Artesania y Cultura Hispana — Fiesta of Art and Culture

Songhai Bamboo Roots Association — Kwanzaa, Jazz Extravaganza, Trail Ride/Southern Soul, Caribbean Afr’Am Festival

The Killeen City Council meeting on Tuesday is scheduled for 5 p.m. at City Hall, 101 N. College St.