Tourism funding dispute reaches apparent end, again

SAN DIEGO (CNS) – A months-long dispute over the release of funding for
a city agency that promotes San Diego as a vacation destination came to an
apparent end Monday with an agreement between Mayor Bob Filner, the City Council
and hoteliers.

Filner signed a document containing amendments, and his staff promised
that he would sign an operating agreement for the city's Tourism Marketing
District when he returns from a three-day trip to Mexico. The action would
release administrative funds to the agency.

The City Council renewed the TMD last November, but then-Mayor Jerry
Sanders was unable to sign all the necessary paperwork by the time he left
office.

Filner objected to several aspects of the deal, including protections
for the city in case judges invalidate the TMD's funding mechanism.

Multiple lawsuits have been filed challenging the 2 percent levy on
hotel room rates that generates money for the agency. The charge is separate
from the hotel room tax.

If judges rule that money collected from the levy is an illegal tax and
has to be reimbursed, Filner wants San Diego's largest hotels to protect the
city from liability. Otherwise, the city's general fund — which pays for basic
services like public safety and recreation centers — would have to pick up the
tab.

“We have now an agreement which, as amended, will fully protect the
general fund of the city of San Diego against any liability if the TMD is ruled
by the courts to be violative of Proposition 26,” said Vince Hall, the mayor's
chief of staff. “This has been the major concern that the mayor has had since
the beginning of this process.”

City Attorney Jan Goldsmith said he was not involved in crafting the
amendments, but in looking over it quickly, it does not appear to be the
“ultimate protection” for the city — and some risk remained. Not marketing
San Diego was a bigger gamble, he said.

Cory Briggs, who filed one of the lawsuits and promised to carry it
through to the end, said the amendments offer no protection to the city's
general fund.

Most of Filner's other objections to the operating agreement were
addressed in negotiations.

Tourism industry leaders had threatened to start laying off employees
next month if funding wasn't released. They had already canceled a television
commercial campaign in Las Vegas, Los Angeles and Phoenix that advertised San
Diego as a vacation spot.

The dispute has included a prior deal between Filner and hoteliers that
collapsed, accusations by the mayor that Goldsmith and City Council members
were beholden to the hotel industry after receiving campaign contributions, and
a mayoral veto of the operating agreement.

The City Council unanimously overrode the veto before voting 8-0 to
approve the amendments.

“If we're to be successful in a competitive, 21st century global
economy, we have to tell people about San Diego,” City Council President Todd
Gloria said. “Folks are not just going to come here.”

Lee Burdick, a legal adviser for Filner, told the council members that
resolution on the TMD funding lawsuits probably won't come until the middle of
next year.

Categories: KUSI