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    News in Depth/Perspective

    Vice Mayor Colonna Moves To Reverse Recent Council Action Directing Convention & Visitors Bureau Boardmembers To File Financial Disclosure Form

    (March 30, 2003) -- Vice Mayor/3d district Councilman Frank Colonna has agendized an item for the April 1 [not a joke] City Council meeting that would reverse part of a March 4 Council vote that directed LB Convention & Visitors Bureau (CVB) boardmembers to file a financial disclosure form.

    The Council-directed reform involves filing a "Statement of Economic Interest" Form 700, previously required for several City Hall commissions and boards and all LB elected officials; the March 4 Council reform, championed by 9th district Councilman Val Lerch, applied it to other city commissions and well as CVB boardmembers (not CVB rank and file).

    In seeking to reverse the Council directive concerning the CVB board, Vice Mayor Colonna states in his agendizing memo:

    I respectfully request that the City Council clarify its March 4, 2003 action regarding the requirement that all city advisory committees and commissions file Form-700 Financial Disclosure Statements. Due to the unique nature of the Convention and Visitors Bureau Board of Directors it should not be subject to that requirement.

    Colonna, along with Councilmembers Carroll, Kell and Webb, initially tried to send Lerch's proposal to a Council committee first, but failed on a 4-5 vote. Faced with defeat, they publicly joined with Councilmembers who did not want a delay in approving the proposal -- Lowenthal, Baker, Richardson, Reyes-Uranga and Lerch -- to approve the plan 9-0.

    During the Council discussion, Assistant City Attorney Heather Mahood confirmed that the requirement would apply to boardmembers of the CVB. Councilwoman Lowenthal asked if the CVB Boardmembers are currently required to fill out Form 700, to which Assistant City Attorney Heather Mahood said:

    "The CVB does not [currently] fill out that form...Now should the Council's action pass tonight, that would be different. We will require them to file..."

    Later in the meeting, Councilman Webb pursued the issue and Ms. Mahood amplified her answer:

    Ms. Mahood: The reason that they [CVB boardmembers] would be required to file [Form 700] under this motion is that they deal with city money. I mean obviously it's the City Council's choice as to what you choose to, who you have file now. There are certain boards that are non-public corporations that are required, because of what they do, they have to file them under law. The Housing Development Co. is one of those because they do entirely city duties, even though they're a non profit corporation and the Mayor does appoint their members. The CVB is in a different situation, because they really do not do city functions, or what is traditionally city functions. It is obviously your choice as a City Council to decide whether tonight you are going to require them to file your statements.

    [Later in the colloquy]

    You do take the CVB's advice on measures regarding the use of the CVB funds, so it's a little bit different relationship with the Aquarium. The Aquarium is simply a lessee which you have a contract with. The CVB is advisory to you on tourism matters.

    Councilman Lerch doggedly pursued his proposal as a matter of principle, undeterred by opposition from the Press-Telegram. The PT blasted Lerch's proposal editorially, urging the Council to vote "no." When the Council voted "yes," the PT ran a Sunday front page above-the-fold news piece (Mar. 16) to the effect that some CVB boardmembers were "rankled" by the Council action. Nine days later, the PT editorially sandpapered Councilmembers Lerch, Lowenthal, Baker & Richardson for advancing a budget proposal that would reduce CVB's $3.5+ million budget by about $390,000.

    Neither of the PT's two editorials, nor its CVB news story, mentioned that PT publisher, Ian Lamont, is a member of the CVB board. Mr. Lamont is the CVB's current Vice chair. Effective October 2004, he is scheduled to become CVB Chair. [April 3 Update: In an April 3 PT op-ed page piece, Mr. Lamont told readers that he resigned as Vice Chair and from the CVB board on April 2.]

    The CVB board also includes other familiar civic names: Kristy Ardizzone (JetBlue West Coast Gov't & Community Affairs Mgr.), John Morris (Mum's) and Joe Prevratil (firm operates Queen Mary under lease with City of LB).

    Against this backdrop, Vice Mayor Colonna has now agendized an item that would effectively rescind the recent Council directive that CVB boardmembers file Form 700 financial disclosures.

    On learning that Colonna was planning to agendize an item involving the Lerch disclosure requirement, Councilwoman Lowenthal advised her Council colleagues and the Mayor that she would be out of the country in early April...and asked that discussion of Form 700s be postponed until she returns.

    "The issue of Form 700 filing was an important issue discussed by the Ethics Review Task Force...and included in their final report to the Council," Councilwoman Lowenthal wrote, adding "Due to my close involvement with issues born from the task force, I respectfully request that any...discussions around Form 700s be layed over until the April 15 regular meeting."

    Reached for comment on March 28 by, the office of Vice Mayor Frank Colonna indicated that his CVB item would not be postponed.

    Although the CVB is nominally an independent not-for-profit entity, it gets roughly 3/4 of its annual operating budget from LB public money: LB's hotel "bed tax" (transient occupancy tax or TOT).

    As reported over two years ago, LB uses only half of LB's bed tax to fund General Fund taxpayer services such as police, fire, libraries and parks. The other half LB"s hotel bed tax is diverted using a formula -- created years ago and not seriously reexamined despite LB's budget crisis -- that gives some of it to LB's Redevelopment Agency (from hotels in the Downtown Redevelopment Project Area) with the rest to City Hall's "Special Advertising and Promotion Fund."

    In recent years, the Council has given most of the city's "Special Advertising and Promotion Fund" to the CVB...although there is no legal requirement that it do so. The Council's $3.5+ annual million allocation to CVB -- which the Council voted a few years ago to increase despite revelations of previous dubious hotel booking figures -- takes place when the Council votes to adopt the city's annual spending budget in September.

    CVB operates under a contract periodically renewed with City Hall, also approved by voted action of the Council.

    LB's hotel bed tax totals roughly $12 million annually [very roughly, rounded estimate to keep this article readable], but LB taxpayers get only roughly $6 million for police, fire, libraries and parks and other General Fund purposes...while nearly $4 million a year goes to CVB.

    By comparison, over 90% of L.A.'s hotel bed tax is used for General Fund purposes like police and fire.

    Beyond Councilmembers' current ability to use the Special Advertising and Promotion Fund for purposes other than CVB, LB taxpayers could get a larger percentage (or all of) their city's hotel bed tax to fund General Fund services...if the Council put such a change on the ballot and the public approved it.

    A recent Council-endorsed, city management 3-year deficit reduction strategy assumes LB voters will approve a future ballot measure to increase LB's hotel bed tax...but it makes no mention of changing the current formula that deprives LB's General Fund of half of LB's bed tax...and currently supports CVB.

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