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Council OKs X Games bid for major state funding

Friday, April 3, 2015 by Jo Clifton

By a narrow margin, Austin City Council voted Thursday to endorse the application of the Summer X Games to the Texas Major Event Trust Fund for 2015 only. It also voted to remove the possibility that the X Games will be able to request a waiver of $150,000 in city fees.

The vote was 6-4, with one abstention. Voting in favor were Mayor Steve Adler and Council Members Ellen Troxclair, Ann Kitchen, Sheri Gallo, Pio Renteria and Ora Houston. Opposing the motion were Council Members Greg Casar, Delia Garza, Leslie Pool and Don Zimmerman. Mayor Pro Tem Kathie Tovo abstained.

Promoters will be able to return to Council to seek approval to apply to the Texas Comptroller for funding from the Major Event Trust Fund for 2016 and 2017.

The X Games remains eligible for funding from the state’s Event Trust Fund, but the Major Event Trust Fund would provide at least $1 million more than the smaller fund because of the way the state calculates the economic benefit of the event.

Wayne Hollingsworth, an attorney who sits on the Circuit Events Local Organizing Committee, also known as CELOC, noted that the committee has a contract to act on the city’s behalf to apply for state funding.

After the vote, Hollingsworth told the Austin Monitor, “I’m very, very pleased (Council) approved it for 2015. We needed it now.” The committee must apply for the funding from the Major Events Trust Fund by April 16, or 45 days before the event, which starts June 4.

Hollingsworth added, “I was very hopeful to get it for 2016 and ’17, but I understand that this is a new City Council and they want to see what has been going on for the last three years.” Some Council members expressed concern that they did not know the members of CELOC and had received no briefings on either the committee or the state’s trust funds.

Adler indicated that he would send questions about CELOC, the trust funds and the waivers to two Council committees, Economic Opportunity and Audit and Finance.

Richard Suttle of Armbrust & Brown, representing the event’s venue, Circuit of the Americas, said after the meeting, “I look forward to a briefing because COTA does so many things for this community that never get reported, like veterans programs and children’s programs.”

Troxclair made the motion to approve the application for the trust fund money. She seemed most interested in eliminating the possibility of having the city foot the bill for $150,000 in fee waivers.

Tovo, who was an opponent of state funding for Formula One at Circuit of the Americas, had a more nuanced position this time.

Asked to explain why she abstained, Tovo wrote, “I have concerns about the speed with which we addressed this issue, given that the decision allows the X Games to qualify for about $2.4 million more of state money. But I decided that there was a chance that I might have been able to support it with time to investigate further, hear more public feedback, and better understand the legislative support for including the X Games as eligible for METF — hence the abstention rather than the outright ‘no’ vote.

“But overall, the issue raised enough concerns for me at this stage that I could not support an agreement that allowed the X Games to access more than $3 million of state money,” she concluded.

According to Hollingsworth, CELOC is “literally almost week to week in communication with city staff.” He said the committee would be happy to show the Council tax returns or any other financial documents it would like to see. The previous Council did not ask for those things.

The question came before Council as quickly as it did because the legislature acted far more speedily than expected, and with overwhelming support to pass legislation correcting a 2013 bill intended to allow both NASCAR and the X Games to qualify for Major Events Trust Fund expenditures. Officials expect NASCAR to apply for funding for races at the Texas Motor Speedway this spring also.

The legislation won approval from both houses with a greater than two-thirds vote and language indicating that it would be effective immediately. Now the bill is on the desk of Gov. Greg Abbott, who will likely sign it. Abbott has 10 days, excluding Sundays, to sign or veto the measure. If he does not act during that 10-day period, the bill will become law without his signature. It is unlikely that Abbott would veto such a popular measure.

According to the website for Comptroller Glenn Hegar, “The Major Events Trust Fund applies local and state gains from sales and use, auto rental, hotel and alcoholic beverage taxes generated over a 12-month period from certain major sporting championships or events to pay costs incurred from hosting the event.”

The fund has previously financed large events such as the 2004 Super Bowl and the NCAA’s Men’s Final Four basketball championships in 2004 and 2008.

The website further explains, “The trust fund can be used to pay costs related to preparing for or conducting the event, including equipment, or to pay principal and interest on notes used to build or improve facilities. One hundred percent of allowable expenses can be funded provided sufficient tax receipts are deposited in the trust fund.”



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