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hire the Executive Director who will be responsible for the day-to-day operations of the <br />corporation. The corporation will apply for 501(c)(3) status from the Internal Revenue <br />Service so that it can seek contributions from private sources, which would qualify as a <br />charitable deduction. <br />Funding Sources: <br />The corporation would receive funding from the participating communities. Since the <br />purpose of the Hotel -Motel tax is to promote economic development, specifically travel <br />related, the corporation would seek approximately 20% of those funds collected in the <br />area. The GHCVB will match the local contribution as stated above. Special projects <br />funding would be sought from State and National grants. In addition, as a 501(c)(3) <br />corporation, the corporation would seek private contributions to enhance its operation. <br />Private foundation grants would also be sought as well as in -kind services. A revenue <br />generating tourist center is not anticipated initially as the focus will be on developing the <br />existing heritage assets. <br />According to the Texas Department of Economic Development revenues reported by the <br />area motels are set out as part of Exhibit C (budgets). However, a different report <br />showing the expenditures for the cities of HOT received in the year 2000 are slightly <br />lower. Therefore we have established a percentage relationship between the cities and <br />with a commitment for upwards to $78,000 we have allocated the appropriate <br />proportional share to each of the other cities: the following were the motel -hotel revenues <br />for 2001: <br />South <br />Pasadena <br />Deer Park <br />La Porte <br />Total <br />Houston <br />Hotel Rev. <br />938,000 <br />7,669,000 <br />1,091,000 <br />3,913,000 <br />2001 <br />Percent <br />4.06% <br />58.06% <br />8.26% <br />29.62% <br />relationship <br />Requested <br />5,452 <br />78,000 <br />11,096 <br />39,796 <br />134,346 <br />contribution <br />The GHCVB has indicated a willingness to match up to $150,000. This would create a <br />potential initial operating budget of $268,693. <br />One of the primary purposes of the Non -Profit Corporation is to lessen the burdens of <br />government of the participating cities in conducting tourism and area promotion activities <br />since SJATC would be fulfilling a portion of that obligation on their behalf. For a <br />discussion of the requirements for the use of local Hotel Occupancy Tax please see <br />Exhibit B. <br />David Pomeroy 9/9/02 7 <br />Proposa121p <br />