Hotel occupancy tax funds collected in Bee Cave will be available in 2018 for organizations to use toward projects or events that promote the city’s tourism, convention and hotel industries. Those projects could include building a convention center, a facility for the arts, or promoting a historical preservation effort, according to the state Tax Code chapter that allows municipalities to share their hotel tax revenues.

Council members passed an ordinance at their Nov. 14 meeting setting up themselves as a standing hotel tax committee to vet applications at least once a year, possibly around the annual budget period. So far, two unnamed entities have expressed interest, City Manager Travis Askey said at the meeting.

To make sure eventual recipients use these public funds responsibly, the Bee Cave ordinance spells out an expenditure reporting schedule. It also requires recipients to file a post-event report that will remain in city records for up to four years, in part to expedite applications for repeat events, according to council records.

In fiscal year 2016-17, which ended in October, the city of Bee Cave's budget had anticipated $405,000 in hotel tax collections, according to budget documents published online. Estimated revenues were higher at $696,951. A portion of that revenue was generated by the Sonesta Bee Cave Austin Hotel which opened in July, 2015 adjacent to the Hill Country Galleria.

This budget year the city is planning for hotel tax revenues of $600,000, putting the total estimated fund balance at $1,376,283. The city’s adopted fund balance is more conservative at $1,279,332, records showed.

One resident encouraged council members to use the hotel tax program as a tool to help the city plan for its future.

“I want to encourage you to think big and do something significant with that money that’s continuing to come into Bee Cave,” Richard Scadden said. “Do something like a performing arts center, a community center that wouldn’t be done normally. As opposed to doing the typical thing like marketing campaigns that are ongoing and won’t perhaps make near as much a difference.”

The new council hotel tax committee will convene sometime the first three months of 2018 ahead of a regular scheduled council meeting, staff said. The hotel tax funds application is expected to be available on the city website.

The nearby city of Lakeway already has a hotel tax of 7 percent charged quarterly to each short-term rental property in the city. Lakeway dedicates hotel tax funds toward promoting tourism-related efforts, according to the city website.

This fiscal year, Lakeway is expecting to see $966,000 in its hotel tax revenue fund, the city budget showed. Planned expenditures such as advertising and arts promotions will draw $153,000 from that balance. Last year Lakeway’s hotel tax fund revenues were slightly less at $963,299, according to budget records.