The Rockport City Council, at its regular meeting Tuesday, Jan. 14, heard a presentation and deliberated the professional services to be provided by Azavar Audit Solutions (DBA Azavar Government Solutions). The council approved entering an agreement with Azavar Government Solutions (AGS) at its Sept. 10 meeting for professional services for administration, discovery, and collection of Hotel Occupancy Taxes (HOT)
Rockport Director of Finance Katie Griffin noted, in backup material, the city has multiple chain hotels, a handful of small locally owned hotels and bed and breakfasts, and a growing number of short-term rentals.
“Each of these lodging establishments are required by city ordinance to pay seven percent hotel occupancy tax on gross receipts,” she said. “Unfortunately, not all of our lodging establishments are in compliance in paying hotel occupancy taxes, creating an uneven playing field for the businesses that do comply with the law, and depriving the city of funding to promote the community.”
AGS’s program provides an onboarding process that covers training for city staff, taxpayer education, configuration and best practices for tax filing and payment set up, and report configuration.
The service’s small monthly fee will be passed through to the HOT payee (i.e. – hotel owner).
For an additional fee, AGS will conduct hotel field audits, which includes reviewing all books and records, calculations and exemptions, evaluation of gross revenues, and application of additional fees.
AGS will assist city staff with updating the city’s HOT ordinance to reflect industry standards for all types of lodging establishments, as well as establishing a registration process.
AGS’s Senior Vice President Ted Kamel addressed the council at Tuesday’s meeting.
He said his company is currently working with city staff onboarding all the information currently available.
He said once everything is uploaded, staff can go online to see payments and historical data.
“The insights and analytics will be very helpful,” he said. “We’re going to create your short-term rental DNA.”
Kamel noted Port Aransas has a very good short-term rental ordinance, and Fredericksburg recently adopted a stricter ordinance.
“If the city chooses to go in that direction we’ll help you,” he said.
In regard to hotel audits, Kamel suggested keeping that on the back burner until the new system is operating and everyone is familiar with its operation.
Councilman Mike Saski said, “I will be very interested in how you set up these audits.”
Kamel noted the city already has the authority to audit lodging establishments, but hasn’t used that tool.
HOT taxpayers can simply log into the system and make payments once everything is up and running.
Councilman Bob Cunningham noted everyone isn’t high tech.
“Will people still be able to bring in a check and pay?” he asked.
Kamel said that will not be a problem. The payee would just come to city hall to make the payment, or mail it in.
Cunningham also noted there is a growing move to control short-term rentals in established neighborhoods, adding it will be interesting to see where those concerns lead in regard to balancing the right of people to rent their property, and a neighbor wanting to know who is (in a short term rental).