(October 20, 2004) -- The LB City Council has voted 7-0 to approve a seven-year extension of City Hall's contract with the Long Beach Convention and Visitor's Bureau (CVB) to 2014 -- a privately governed entity which receives roughly 3/4 of its annual operating budget from LB's hotel room tax -- and increased City Hall's spending of hotel bed tax by $201,000 in FY 05 to roughly $3.9 million...with future amounts to be determined.

Councilwoman Bonnie Lowenthal, on jet lag, was temporarily absent for the vote but told LBReport.com on the day after the meeting that she would have voted yes.

A inquiry to the office of Councilman Dan Baker (who exited after a lengthy Council discussion of Redevelopment) is pending and will be posted here as received. (Click reload or refresh on your browser for update).

The CVB funding increase comes after Councilmembers voted to allocate $3.7 million in hotel bed tax for the CVB in September. In October, it became publicly known that the CVB had incurred losses of $1.77 million in connection with a summer Aquatics Festival.

City Manager Jerry Miller, a non-voting member of the CVB's governing board, didn't cite the debts in seeking Council approval for the CVB contract extension and funding increase. His memo to Councilmembers said in pertinent part:

"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 CVB debts were discussed earlier in the Council meeting by City Auditor Gary Burroughs. For LBReport.com coverage, click

City Auditor Re Aquatics Festival.

As previously reported by LBReport.com the CVB contract extension includes verbiage (similar to that in the current CVB contract) which states, "The term of this Agreement...shall terminate on September 30, 2014, subject to annual appropriation by City's City Council of funds to promote conventions and tourism. If funds are not appropriated, this Agreement shall terminate on September 30 of the fiscal year prior to the fiscal year for which no appropriate is made." The current agreement also specifies that "[e]ither party may terminate this Agreement by giving the other party ninety (90) days' prior notice."

City Manager Miller indicated that LB's hotel room tax ("transient occupancy tax") has now reached an estimated $14 million in just concluded FY 04...an increase from about $12.78 million in FY 2000, $13.33 million in FY 01, $12.44 million in FY 02 (reflecting Sept. 11/01), $13.13 million in FY 03 to (estimated) $14.08 million in FY 04.

Half of LB's hotel room tax currently goes to the General Fund, with the other half given to Special Advertising and Promotional items (mainly the CVB) and the Redevelopment Agency.

CVB President/CEO Steve Goodling delivered a presentation indicating that the CVB had recently achieved a record number of hotel room night bookings (218,834). Video excerpts of NBC television coverage of the Olympics were shown which put Long Beach in a positive light.

In public comment, LB writer and activist Bry Myown acknowledged the positive coverage but noted:

"If we were to directly repay the debt [for the Aquatics Festival] that would be an illegal gift of public funds and this looks like a rather tortured way around that," questioning whether others might claim remedies against the city if it chose to end the CVB contract. Noting that the proposed contract amendment, the current contract and the City Auditor's report were not online for the public, Ms. Myown urged the Council to not take action immediately or vote to not extend the contract to 2014, keep the current contract in place and revisit the issue when it expires in 2007.

City Attorney Shannon didn't directly respond to Ms. Myown...but told LBReport.com earlier in the day that Article 16, section 6 of the CA Constitution effectively precludes any CA city from paying a debt incurred by a private party or guaranteeing a loan to pay that debt. "Once a debt incurred, a city can't undertake to underwrite the debt and has no legal ability to pay the debt or guarantee a loan to pay the debt," City Attorney Shannon told LBReport.com.

Speaking on behalf of the LB Area Chamber of Commerce, Immediate Past Board Chair Dave Neary backed continuation of the CVB contract with the proposed city funding increase, telling the Council:

"As any business owner knows, the best money spent is on that of marketing and advertising, but it's the hardest to see the direct results until it stops and then it's too late."