Page 101 - CityofColleyvilleFY25AdoptedBudget

The Hotel Tax Fund is classi ed as a governmental fund and is dedicated to
managing the revenues generated from the hotel occupancy tax collected within the
City of Colleyville. The primary purpose of this fund is to support tourism-related
activities and projects that promote the City as a destination, enhance the local
economy, and improve the quality of life for residents and visitors alike.

The Hotel Tax Fund is considered a minor fund, as its revenues and expenditures do
not constitute more than 10% of the City’s appropriated budget. The revenues
Hotel Tax
generated through the hotel occupancy tax are allocated to a variety of eligible
Fund
activities, including marketing and promotional efforts, cultural and recreational
events, and the development and maintenance of facilities that attract tourists to the
area.

This fund plays a vital role in bolstering the local hospitality industry and supporting
the City's economic development goals by leveraging tourism to drive economic
growth.

Fund Summary

Commentary on Available Funds
The HOT Fund began FY 2024 with an available balance of $117k, and is projected to end FY 2024 with $96k. By the end of
FY 2025, the balance is expected to decrease to $40k. This fund operates solely on the revenue generated from the City’s
one hotel, and there is little potential for growth in this revenue source. The fund has been operating at a de cit for both
FY 2024 and FY 2025 due to increasing operating expenses that exceed revenue.

The HOT tax revenue has remained relatively stable, but due to the limited use of these funds under the state’s "heads in
beds" restrictions, the City has allocated these funds toward partial funding of FTEs for the Colleyville Center and
marketing and event staff. In addition, some operating expenses related to tourism and event promotion are covered.
These expenditures have grown over the years, contributing to the de cit.

There is no formal reserve requirement for this fund, though the City generally aims to maintain a 90-day operating
reserve, which is met in both FY 2024 and FY 2025. However, the City’s philosophy for this fund is to use the available
revenue to cover eligible operating expenses rather than build a large reserve. Moving forward, the City will closely
monitor the fund’s expenditures to ensure that they remain sustainable given the limited growth potential of the HOT tax
revenue.

Summary
The City of Colleyville is projecting $230K of revenue in FY2025, which represents a 13.9% increase over the prior year.
Budgeted expenditures are projected to increase by 51.6% or $97.29K to $285.83K in FY2025.

City of Colleyville | Budget Book 2025 Page 101