The Walker Free Press, an online newspaper covering Walker County and Huntsville, has posted a comprehensive archive of its coverage of a public funds scandal that's been churning in the city council and chamber of commerce since last fall. The issue centers on an annual $350,000 that the Huntsville-Walker County Chamber of Commerce gets from the local hotel occupancy tax, which locals refer to as HOT funds.

The money is supposed to go toward tourism and hotel promotion. But an auditor hired by the city has found some money was used to fund gifts for chamber events and that the group's financial records were at times incorrect, at other times incomplete.

Last year the city of Huntsville began investigating how the chamber of commerce was spending that money. An outside forensic auditor was hired. City Attorney Leonard Schneider has led the city's action in response to the auditor's findings, and the city recently took over the Sam Houston Statue Visitor Center and Gift Shop from the chamber of commerce, and demanded that the chamber return hotel tax money.

The Huntsville Item also covered the changing of the guard at the gift shop, and detailed how the city believes the chamber misspent the tax money:

A letter, dated July 23, from city attorney Leonard Schneider ... listed instances of non-compliance and breach of contract by the Chamber.

...

• Records produced by the Chamber indicate/show the use of hotel tax funds for items that are not provided for in the contract. An example is the purchasing of gifts using hotel tax funds for items to be distributed at a Chamber of Commerce banquet and/or dinner.

• Records produced by the Chamber also show and indicate that the Chamber has incorrectly identified and overstated the percentages of administrative costs and salaries that the hotel tax may be applied to.

• Records produced show improper use of hotel tax funds to purchase advertisements of various events that have no relation to the authorized purposes of Section III of the contract.

• Failure of the Chamber to maintain complete and accurate financial records of each expenditure of hotel tax funds and to timely and promptly produce Chamber records when requested by the city.

Free Press Editor and Publisher Rich Heiland introduced the archive with a recap of the hotel tax money story. He traces it back to a shift on the city council following the 2008 election, after which there was renewed concern among members about city finances:

While newly-elected members Wayne Barrett, Charles Forbus, Dr. Tom Cole and Lanny Ray are not in lockstep agreement on a variety of issues, they have shared one concern - fiscal management, mostly from a conservative bent. ...

It was that council that hired current City Manager Bill Baine, who came on board in August. One of the first things the new majority encouraged, and Baine agreed, was asking city department heads what their concerns and priorities were. A concern that came out of the Finance Department involved the HOT funds.

Photo of Sam Houston statue by flickr user Carla Michele, used via a Creative Commons license.

Contact Ann Raber at news@texaswatchdog.org or 713-980-9777.