Transfer of $695,000 in fees to Galveston dies on one vote

Galveston County Daily News 
By B. SCOTT McLENDON, The Daily News
June 29, 2023 at 02:50AM

GALVESTON - The Park Board of Trustees failed Tuesday to approve a motion to send the city about $695,000 in short-term rental fees it has collected.

Needing five votes to pass, the motion failed 4-2, with Dave Jacoby not voting because he left before it took place.

Trustees Jason Worthen, Jason Hardcastle, Kimberly Gaido and Spencer Priest, on his final act as a trustee, voted in favor of the motion to fork over the money.

Trustee Marty Fluke, who also took part in his last meeting before his replacement is sworn in, voted against, along with Mike Bouvier, city councilman and ex-officio member of the board.

The park board is not authorized to collect the short-term rental fee, nor is it authorized to send any money to the city, Fluke said.

“I consider this to be a cleanup of the 2019 interlocal agreement, which has lots of error in it,” Fluke said.

Fluke’s comments come on the heels of about six months of discourse between the city and park board. The city council’s quest to broaden its sources of revenue, and increase its general fund, put the governing body on a collision course with the park board and its blooming bank account.

The money comes from a new $250 annual fee imposed on all short-term rentals in the city. City officials, who made the park board responsible for collecting the fee, said the money will help pay for data-collecting software the park board was set to unveil earlier this year, but hasn’t.

The failed motion by Hardcastle called for the park board to remit to the city about $695,000 in collected short-term rental fees, pending an amendment to the interlocal agreement between the entities.

The interlocal, which delineates the legal and financial relationship between the city and park board, lacks language allowing for the transfer of short-term rental fees to the city, trustees said.

“The reason for this motion is due to conflicting verbiage with the city charter and the interlocal agreement,” Priest said. “The purpose of this is to clean it up and tighten all these loose ends.”

When the city passed the annual registration fee last year, Fluke asked for an amendment to the interlocal agreement to give the park board the authority to collect it on an annual basis, he said. That fell on deaf ears, Fluke said.

“In October, when they changed the registration fee to $250, I asked to have the interlocal amended to give the park board the authority to collect it,” Fluke said. “So, here we are almost in July, and once again we have policy way ahead of process.”

Bouvier, who cast the other no vote, said it was because he wanted the payment to go now and not be contingent on the interlocal, he said.

Bouvier acts as the city council’s representative on the park board. The city has taken the stance that the money belongs to the city, not the park board, officials said.

“And we need it,” Bouvier said.

The park board has no problem delivering the money to the city, it’s just missing the paperwork to do so, Bouvier said.

The city introduced the $250 annual fee in 2022, changing from a $50 one-time fee. The park board began collecting the fee at the end of last year, but at least one city council member didn’t learn about the transfer impediment until last week, Councilman David Collins said. If it’s a matter of amending an ordinance, however, the city council is prepared to do that, Collins said.

“I’m disappointed that they’re finding excuses not to transfer the money,” Collins said Wednesday. “Why did they think they were collecting it?”

Collins argues the issues between the city council and park board will be quelled next month.

“We have a new board being seated this week, so we will have it fixed,” he said. “Communication will dramatically improve.”