It is recommended that the City Council, as authorized by Chapter 334 of the Local Government Code and approved by Fort Worth voters, adopt the attached ordinances, which amend Chapter 32, Taxation, of the City Code to:

(i) Enact the following venue taxes associated with the multipurpose Dickies Arena:

• an admissions tax of 10 percent on each ticket sold as admission to an event held at the Venue Project;
• a livestock facility use tax of $1.00 per day for each stall or pen used or occupied during a livestock event in which the Venue Project is used, with a maximum rate of $20.00 per stall/pen per event;
• a parking tax of 50 percent on each paid motor vehicle parking in a facility serving the Venue Project, with a maximum rate of $5.00 per day; and

(ii) Mandate reporting and remittance requirements, provide penalties and interest for non-compliance, and delegate authority to Staff to enact more detailed rules consistent with the ordinances.

The purpose of this Mayor and Council Communication (M&C) is to enact the three voter-approved venue taxes associated with the multipurpose Dickies Arena that is currently under construction at the Will Rogers Memorial Center. Revenue from these taxes on users of the facilities will be applied toward meeting the City's contribution for the project, which is capped at $225,000,000.00 of the total projected cost of $540,000,000.00. The private sector, spearheaded by Event Facilities Fort Worth (EFFW), will provide the balance of the project's costs.

Chapter 334 of the Texas Local Government Code authorizes the City Council to designate various sports-and community-related capital improvements as a "venue project" and to designate from among various identified taxes proposed methods of financing, with the designations subject to voter approval.

The multipurpose Dickies Arena, which is currently under construction at the intersection of Harley Avenue and Gendy Street, along with other adjacent support facilities and related infrastructure, was designated as a venue project (Venue Project) in 2014, with an admissions tax, stall tax, and parking tax designated as proposed methods of financing (Resolution 4327-07-2014). At an election held in November of that year, voters overwhelmingly approved the Venue Project and each of the three taxes proposed as financing methods (Ordinance No. 21374-08-2014; Resolution No. 4378-11-2014).  

Since that time, the City has been collaborating with the private sector to work toward the planning, acquisition, development, establishment, construction, renovation and financing of the Venue Project, in furtherance of the wishes expressed by the majority of City voters voting on those propositions.

In addition to the venue designation and election, other major actions taken by the City Council include:

• Establishing a Project Financing Zone (the PFZ) around the arena and Fort Worth Convention Center to capture incremental growth in certain hotel-related state tax revenues for use in funding qualified projects, one of which is the arena (M&C G-18048; Ordinance 21011-10-2013)
• Officially expressing commitment to fund up to 50 percent of the costs of the arena and certain immediately adjacent support facilities, with the maximum public contribution capped at $225,000,000.00 (the Public Contribution) (Resolution No. 4387-12-2014)
• Approving a master Agreement with EFFW regarding development, construction and funding of the project with the agreement reiterating the cap on the Public Contribution and documenting EFFW's commitment to raise the balance of the needed funds (M&C C-27527; CSC 47218)
• Adopting a funding plan that includes the voter-approved venue taxes and identified transfers from the Culture and Tourism Fund that will act as additional reserves and are scheduled to be included in the Fund's operating budgets over the course of several years (Resolution 4498-08-2015)
• Designating incremental growth in local hotel occupancy tax from hotels that are within the Project Finance Zone to be set aside for eligible special projects like the arena (M&C G-18614)
• Approving amendment of the master Agreement, execution of a funding agreement with EFFW, and execution of a lease with non-profit Multipurpose Arena Fort Worth for operation of the Venue Project (M&C C-28021; CSCs 47218-A1, 48732, and 48733), which Agreements reaffirm the commitment of the private sector funding for construction of the Venue Project and provide for ongoing operation of the facility on a self-sustaining basis without a subsidy from taxpayers and with any profits being set aside for on-going maintenance and improvements at the Venue Project
• Expressing intent to issue bonds for the balance of the Public Contribution and directing Staff to prepare venue tax ordinances and bond-authorization documents for consideration by the City Council (Resolution No. 4706-12-2016)
  

Adoption of the attached ordinances represents the penultimate step in the City's meeting its obligations for the Public Contribution.  These ordinances impose the voter-approved venue taxes, with collections to begin when the arena is issued a certificate of occupancy and to continue so long as debt obligations associated with the taxes remain outstanding.  Revenues from these taxes will, along with PFZ funds and other tourism-related revenues, serve as security of and payment for special-tax revenue bonds with proceeds from the sale of the bonds being used to provide the balance of the Public Contribution for the construction of the arena and its immediate adjacent support facilities and also to furnish funding for improvements to other adjacent support facilities throughout the Will Rogers Memorial Center campus.

Key elements of the attached taxes include:

Rate

In accordance with voter approval, the attached ordinances will impose the following taxes on users of the Venue Project facilities:

• an admissions tax of 10 percent on each ticket sold as admission to an event held at the Venue Project;
• a livestock facility use tax of $1.00 per day for each stall or pen used or occupied during a livestock event in which the Venue Project is used, with a maximum rate of $20.00 per stall/pen per event; and
• a parking tax of 50 percent on each paid motor vehicle parking in a facility serving the Venue Project, with a maximum rate of $5.00 per day
  
  
  

Exclusion/Exemption

To distinguish traditional admissions to concerts and other events from charitable or member-only meal-oriented functions that may involve a charge, the admissions tax ordinance excludes catering events from application of the tax. Similarly, the stall tax ordinance provides an exception for the Tarrant County Junior Livestock Show as contemplated by Section 334.406 of the Local Government Code.

Application of Tax

In accordance with Section 334.201(b-1)  of the Local Government Code, because the Venue Project consists of three or more separate but adjacent venue facilities, the parking tax will apply during all hours.  When outside parking facilities are leased, licensed, or otherwise used for parking for an event in the Venue Project, those facilities will also be subject to the venue parking tax.  Also, because the proposed debt issuance will include funds for improvements to other adjacent support facilities throughout the Will Rogers Memorial Center campus, all of the taxes will apply all across the WRMC.

Reporting and Remittance Requirements; Delegated Authority

The attached ordinances require venue operators to collect the taxes, with the ability to delegate the collection requirement to an event holder. Each month collected taxes are to be remitted to the City along with certain reports that will allow the City to perform an initial verification of the accuracy of the amounts submitted. Each ordinance delegates to Staff the ability to adopt rules consistent with the ordinance to address more detailed concerns such as specific contents of reporting documents and methods for allocating among bundled payments to ensure accurate collection of the taxes.

Late Fees, Interest and Penalties

Consistent with other City tax ordinances, the attached ordinances impose fees and interest charges for untimely remittance to reflect the economic loss to the City when the taxes are not remitted in a timely manner and the costs associated with the City's additional collection efforts. The ordinances make certain violations of the law criminal misdemeanors with a penalty of $500.00 each. Among the violations are failure to collect or remit the tax, failure to maintain required records, and submission of false reports.

This M&C does not request approval of a contract with a business entity.