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    News

    City Auditor Told City Mgr. Of $1.7 Million In CVB Losses Related to Aquatics Festival On October 4; Some Councilmembers Say They Haven't Received Auditor's Report Oct. 19 A.M. Despite Scheduled Council Vote To Extend & Increase CVB Contract Oct. 19 P.M.


    (October 19, 2004, updated text) -- A draft report by City Auditor Gary Burroughs on the operating results of a 2004 LB Aquatics Festival indicates City Manager Jerry Miller was told on October 4 that a financial review of the event found that the LB Convention and Visitors Bureau (CVB) -- a privately run entity that receives roughly 3/4 of its annual operating revenue from LB's hotel room tax -- had incurred $1.7 million in losses in connection with the event.

    The draft report also indicates city staff performed $150,000 in city services without charge.

    The Auditor's office says it performed the financial review of the operating results of the Aquatics Festival at the City Manager's request. It says the event was organized, promoted and operated by the Long Beach Sports Council, a non-profit entity formed in April 2002.

    "The Sports Council shares certain members of its Board of Directors and officers with that of the Long Beach Convention and Visitors Bureau (the CVB). The Sports Council and CVB have similar missions in attracting events and visitors to the City," the Auditor's report says.

    The report, which is not a financial statement audit but is a financial review of the Aquatics Festival operating results, says the Festival's operating results were fairly represented.

    The Auditor's report has been agendized for the October 19 City Council meeting -- the same meeting at which City Manager Jerry Miller has separately agendized a request that Councilmembers extend CVB's contract with City Hall to 2014 and increase City Hall's funding for CVB by roughly $200,000 in FY 05.

    Some Council offices queried by LBReport.com at the start of business on October 19 said they hadn't seen the Auditor's report. The document was not publicly accessible on City Hall's web site as of 8:00 a.m. October 19...although the agenda item was publicly posted by October 15.

    The City Auditor's office provided a draft of its report to LBReport.com on Monday afternoon October 18, advising us via email, "We expect no material changes to this report prior to Mr. Burroughs presentation" at the October 19 Council meeting.

    LBReport.com will provide further details on the Auditor's report when it is presented in final form by Auditor Burroughs at the October 19 Council meeting.

    In September 2004, the City Manager budgeted, and the Council approved, giving CVB roughly $3.7 million from LB's hotel room tax. The City Manager has proposed raising City Hall's payment to CVB to roughly $3.9 million and extending CVB's current contract (which expires in 2007) to 2014.

    The City Manager's October 19 agendizing memo states in pertinent part:

    The total amount of the proposed amendment for Fiscal Year 2005 (FY 05) is $3,930,366, which represents an increase in the amount of $201,366, or 5.4 percent, over the FY 04 agreement amount. This increase reflects the Consumer Price Index increase for the Southern California region over the past two years, and the first proposed increase for the LBACVB since the FY 01 agreement...The proposed amendment will also extend the current five-year term by an additional seven years, through September 30,2014.

    The proposed Second Amendment will include language requiring the LBACVB Board members to file the California Fair Political Practices Commissionís Form 700 Statement of Economic Interest with the City. Additionally, LBACVB activities and budget will be included in the Cityís performance management efforts and in the program-based budget development. Key outcome measures for contract performance will be established as part of this process.

    At the October 19, 2004 City Council meeting, the LBACVB will provide an in-depth presentation outlining some highlights from FY 04, including the Long Beach Aquatic Festival, which brought international attention to Long Beach, and what to look forward to in FY 05. In FY 04, the LBACVB posted an estimated 5.5 percent increase in room night bookings, adding to the over 24 percent increase achieved the previous fiscal year. Building on this success, the City expects another strong year from the Long Beach convention and tourism industry.

    The proposed increase in funding is to capitalize on the incredible marketing and promotional success resulting from the Long Beach Aquatic Festival and the other investments in Long Beach, such as the Pike at Rainbow Harbor and Carnival Cruise Lines, that help make this a desirable destination for conventions and tourists. The City, through the agreement with the LBACVB, needs to continue to invest in this important segment of our economy...

    ...A total of $3,729,000 is budgeted in the Special Advertising and Promotions Fund (SR 133) in the City Managerís Office (CM). Although the proposed augmentation of $201,366 is not budgeted, the City Managerís Office will attempt to absorb this additional expense within existing City appropriations...

    The City Manager is an ex officio (non-voting) member of CVB's governing board. LBReport.com has previously listed CVB's 2004-05 governing board members at: LB Convention & Visitors Bureau Boardmembers.


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