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    No To A CVB Bailout, Because...

    See also additional coverage, post:
  • Oct. 19. 2004: City Auditor Told City Mgr. Of $1.7 Million In CVB Debts Related to Aquatics Festival On October 4; Some Council Offices 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.

  • Oct. 19, 2004: Proposed CVB Contract Extension Includes Verbiage Seemingly Letting Council End Agreement Annually
  • (October 18, 2004) -- urges Long Beach City Councilmembers not to approve a blank check bailout of the privately-run Long Beach Convention and Visitors Bureau with what we consider gifts of an immediate contract increase and extended public resources.

    No matter how it's camouflaged, we think an offer to extend CVB's contract by seven years amounts to saddling LB taxpayers to a commitment of at least $28 million ($4 million times seven years) with an open door to more.

    We consider this a gift of public resources. Under CA law, public bodies are not allowed to make gifts of public money or resources.

    To our knowledge, LB taxpayers have no legal obligation to pay CVB's debts. That's why we think City Manager Jerry Miller is trying so hard to portray his request for a $200,000 instant increase in CVB funding as a way 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."

    Oh, c'mon. The City Manager's budget, which he brought to the Council for passage last month, didn't specify any additional $200,000. Mr. Miller candidly admits he doesn't know at the moment from what source he'll take that $200,000.

    It's painfully obvious to us that the $200,000 would be a de facto immediate gift to bail out the CVB...and if the Council doesn't say no, that gift could end up costing the City at least $2 million more over ten years ($200,000 times ten) on top of the $28 million gift of seven additional years on the CVB contract.

    We fully expect City Auditor Gary Burroughs to serve as a tag-team member in trying to sell the CVB bailout. In our view, Auditor Burroughs has amply shown himself unhelpful to taxpayers in recent years. He failed to sound the alarm over the Queen Mary rent credits. (Where is that forensic audit that an outside firm recommended?) He didn't uncover the CVB room night booking fiasco (under prior CVB management). Taxpayer Traci Wilson-Kleekamp blew the whistle on both...without Burroughs' six figure salary.

    Auditor Burroughs also served as a tag-team member with then-City Manager Hankla in peddling a costly LBPD "Strategic Plan." Its preliminary staffing strategy called for 1,023 sworn officers by FY 99-00. That deadline passed five years ago and today, LB taxpayers still don't have those cops.

    Now Auditor Burroughs has told and the Press-Telegram that he thinks it's appropriate for the City Council to consider providing assistance to CVB.

    Here's the governing board now running LB's CVB:

    2004-2005 BOARD OF DIRECTORS


    Chair: Ms. Jane J. Netherton
    International City Bank

    Vice Chair: Mr. Jerry Slatton
    General Manager
    Long Beach Marriott

    Secretary: Ms. Cheryl Phelps
    Vice President & Managing Director
    Hyatt Regency Long Beach

    Chief Financial Officer: Mr. Larry Jackson*
    President & General Manager
    Long Beach Transit

    * Nomination notice sent out for new term expiring Sept. 2007

    President & CEO: Mr. Stephen Goodling
    Long Beach Area CVB


    Mr. Greg Bombard
    Catalina Express

    Mr. Joachim Ortmayer
    General Manager
    Renaissance Long Beach Hotel

    Mr. Ken Pilgrim
    General Manager
    The Westin Long Beach

    2003-2004 Regular Board Members

    Mr. Terry Antonelli
    Del L'Opera Restaurant Group

    Ms. Kristy Ardizzone
    Government and Community Affairs Manager
    JetBlue Airways Corporation

    Mr. Reuben Brasser*
    Lord Mayor's Inn

    Mr. Sabir Jaffer
    General Manager
    Holiday Inn Long Beach Airport

    Mr. Jim Michaelian*
    President & CEO
    Grand Prix Association of Long Beach

    Mr. John Morris
    Mum's Restaurant

    Mr. Dennis Patel
    Travelodge Convention Center

    Mr. Hitu Patel
    Rodeway Inn

    Mr. Bill Peterson
    Managing Director
    Home Depot Center

    Mr. Joseph Prevratil
    President, RMS Foundation, Inc.
    The Queen Mary

    Mr. Ed Proenza*
    General Manager
    Hilton Long Beach & EMC

    Mr. Mitchell Rouse*
    President & CEO
    Taxi Systems, Inc.

    Mr. Richard Sandoval
    General Manager
    The Coast Long Beach Hotel

    Ms. Patricia Schille
    General Manager
    Residence Inn by Marriott

    Dr. Jerry R. Schubel
    President & CEO
    Aquarium of the Pacific

    Mr. William Simmons
    President & CEO
    City Light & Power, Inc.

    Mr. Doug Smith*
    General Manager
    Courtyard by Marriott

    * Nomination notice sent out for new term expiring Sept. 2007


    Mr. Rich Foster
    Attorney at Law
    Cameron, Pearlson & Foster

    Mr. David Gordon
    General Manager
    L.B. Convention & Entertainment Center

    Mr. Randy Gordon
    Long Beach Area Chamber of Commerce

    Mr. Wayne Griffin
    President & CEO
    Catalina Island Chamber of Commerce

    Mr. Kraig Kojian
    President and CEO
    Downtown Long Beach Associates

    Mr. Gerald R. "Jerry" Miller
    City Manager
    City of Long Beach

    With all due respect, we think LB's convention and visitors promotional entity should do its job by consuming less, not more, in LB public money (in part from more member dues).

    Other cities, including L.A., tap a larger percentage of their hotel room taxes to pay for general fund services like police and fire. In contrast, LB City Hall diverts half of our hotel room away from general fund items. Half is now spent on a matrix of other items, composed mainly of the CVB, which already consumes roughly $3.7 million in LB hotel room taxes annually. Our hotel room taxes pay roughly 75% of CVB's yearly operating budget.

    The proposed CVB bailout would make it even harder for Councilmembers -- from now until 2014 -- to get a larger, fairer percentage of LB's hotel room tax to fix broken sidewalks, reopen libraries and provide cops.

    Meanwhile, CVB has backed policy positions on matters we think should be off limits. Prior CVB management testified in support of City Hall's "Queensway Bay" project when others wisely warned against it. CVB's current Board has sent President/CEO Steve Goodling to testify in favor of new permanent Airport terminal facilities (while stopping short of advocating a particular size option). We cringed at seeing Mr. Goodling, a straight shooter, put in this awkward position.

    We don't think it's the interest of the 4th, 5th, 7th and 8th districts to hand over $4 million a year (possibly more) until 2014 to a CVB currently run without serious oversight or control by (among others) representatives of JetBlue Airways, multiple major hotels and LB's taxi franchise.

    LB's City Manager is an ex officio non-voting CVB Board what did LB City Hall know about the Aquatics Festival and when did it know it?

    On October 7, made Public Records Act (freedom of information) requests for documents that should show this from the offices of the City Manager, City Auditor, Mayor and Councilmembers. We're still waiting. (A response is due today; we predict it will cite a statutory loophole to eat more time.)

    Meanwhile, in tag-team fashion to coincide with the Manager's request, City Auditor Burroughs agendized a "report" on the Aquatics Festival for the October 19 Council meeting. That date had been scheduled for discussion of a CVB contract item weeks earlier. As of the morning of October 18, Auditor Burroughs had not released his "report," promising it on the afternoon of the October 18.

    In our view, this delay shows a polite disrespect for Councilmembers and the public. No respectable legislative body would let others manipulate it into a ten year deal with long term consequences by dumping a "report" on them not released until 24 hours before the vote.

    That's particularly true when the source of the "report" is a party who's indicated his openness to some type of bailout. We predict the Monday afternoon release of the "report" (even the thin gruel we've come to expect from Burroughs) will produce a story in Tuesday's Press-Telegram that in previous years might have stampeded some Councilmembers into a vote.

    We don't think that will work now because too much has changed.

    The Council can't even lay the matter over until October 26 (unless it calls a special meeting) because it cancelled its last meeting of every month (motion by Kell) ostensibly to save money. Those were pennies saved compared to long term obligations the Council is being asked to approve now.

    In our opinion, the CVB shouldn't be handed an instantaneous six figure reward with guaranteed continuing LB public revenue until 2014. If it can't perform on the money the Council budgeted last month, we think it should seek a businesslike negotiated release from its contract with City Hall so the City Manager can put to competitive public bid a new contract to perform LB's convention and visitor booking and promotion services, explicitly conditioned on consuming less of LB's hotel room tax, operating under Council (not just management) oversight and compliance with the Public Records Act and Brown (open meetings) Act.

    We don't favor hanging buisnesspeople out to dry if they've been led-on by, or relied on representations from, city officialdom. Our opinion on this parallels our view of the QM rent credit issue. In both cases, we want to know what city officials did. To us, this is a matter of public accountability. It's the reason we made a Public Records Act request here.

    We think the proper Council motion is to receive and file the Manager and Auditor reports, renew the CVB contract on the amount budgeted in September 04 by the City Council and leave the next step to CVB.

    We believe this issue goes to the heart of the way LB City Hall has used public money in the past. We think LB taxpayers want a new way of doing business.

    We think the Council's action on this will show which Councilmembers are part of LB's past and which are part of the city's future.

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