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CITY COUNCIL RECAP: JUNE 27, PART TWO
Another contentious TBID discussion
As is our usual, we will recapping the meeting’s highlights but encourage our readers to view the agenda and the video. This was Council’s final meeting before a month long summer break, making for a long night and 2-1/2 hours of discussion - so long that we decided to split our recap into two parts! For information on Invocations, a report from the Wastewater Committee, discussion of affordable housing, including self help housing, Project Phoenix sewage treatment, and general public comment see Part One.
#11 Visit 29 Palms Civitas Advisors Contract Services for TBID Conversion
The Tourism Improvement District (TBID) was organized in 2017 to promote tourism. The Board consists of five local hoteliers, and its $285,000 budget is derived from a 1.5% tax on hotels, motels and STRs. Council reauthorizes TBID on a yearly basis. TBID is proposing that it be updated from the 1989 law under which it was formed to a 1994 law. To manage this transformation, the TBID has employed CIvitas Advisors, which is a consulting firm specializing in the development and formation of special districts.
While the yearly reauthorizations have been unchallenged by City Council, they are often contentious, with business owners questioning how the TBID spends its budget and whether it it is effective in promoting tourism. It wasn’t a surprise when Council member Scott pulled this item from the Consent Calendar for discussion. Desert Trumpet believes the TBID deserves attention as it is generating the only City authorized outward facing promotion for tourism. The Annual Report, presented at an August 2022 City Council meeting, is attached above.
Per TBID Marketing Director Breanne Dusastre, 77% of municipal TBIDs are operating under the new ‘94’ law. Per the proposal supplied by Civitas, changes include:
1. Renewal moves from every year to every five years, with the possibility of renewals taking place every 10 years.
2. This necessitates TBID becoming an independent 501c3 nonprofit.
3. Currently the TBID Board is appointed by Council. As an independent nonprofit, new Board members would be selected by “stakeholders.”
Council approval is needed to move to the next phase of the conversion, a $26,000 petition drive for signatures from the accommodations businesses that are taxed to fund TBID. While this is paid from the TBID budget, the choices made in the allocation of funds has been an additional source of controversy.
Given the history of public concern, questions about oversight were expected. Scott kicked that discussion off by asking, “Once your organization becomes a nonprofit, where does the oversight lie?” While Dusastre answered “we will still come to you with an annual report once a year, so in a sense, similar to how we’re structured now.” In fact, Council would lose voting authority over that yearly budget, one of several structural differences reducing Council oversight.
Civitas Project Manager Kelly Rankin chimed in by phone to clarify that Council and public oversight lie in the conversion process:
1. Approval of a management district plan that is binding,
2. Public hearings during the conversion process, and
3. Approval of formation according to the 1994 law.
Rankin reiterated that an annual report would be submitted to the City and that the City would be responsible for collecting the tax and remitting it to the district.
When being questioned about staff time for the conversion, Dusastre said that one of the benefits of the conversion is the reduction in the staff time needed to prepare for the annual renewal of TBID by Council. Luckino added that there are additional advantages in contracting, as an annually authorized budget prevents contracts lasting longer than one year. However, Scott pointed out that an annual report would still be needed, using staff time. When he asked Dusastre if there were long-term contracts that were required or they were considering, she mentioned the Palm Springs Airport and that there were other contracts that would benefit from longer terms.
As in prior TBID agenda items before Council, public comment centered on whether the TBID has been effective in its mission—different points were made, so we are highlighting selections from comments:
Six successful authorizations has led to no demonstrable results to any branding. And I would even go one step further and to no benefits to short-term rentals, hoteliers, in getting their occupancy rates up. In addition, I think there's a very big mistake in this town looking at TBID [the] as only to help tourism. There is no reason we can't be putting on events that also benefit our locals—why can’t we have big events that benefit everyone? — Eileen Leslie, business and STR owner, former Planning Commissioner
I'm a stakeholder in the TBID. We have a partnership with the TBID. In a partnership, if a partnership is not working out, the partners will say “Hey, listen, we've tried we've done our best, I'm sorry, it’s not working out”….But if I'm not making money, just like you or anybody in this audience, if you keep putting money, you're going to say how long? I’m going to revisit what I have.” — Veno Nathraj, owner of America’s Best Value Inn, Oasis Inn and Suites
The way I understand what's going to happen if it goes to five years is it takes it (TBID oversight) away from the City. I understand that it's more timely for the TBID Committee to do a five year rather than an annual. But who's the oversight of this? It's gonna go for five years with no oversight? Unfortunately, I've seen too many disasters with the Twentynine Palms Chamber of Commerce over the years, even with people being put in jail for mismanagement of money. So I’d feel better If the City was more involved in this five-year plan, then then being out of the picture for five years. –– Mary Jane Binge, STR owner
I keep hearing we've been successful, we've been successful, we've been successful. How are we measuring our success, not only from the leadership portion, but what measurable outcomes and metrics do we have and who is keeping track of them? If there is a dip from one year to another are we saying is that because of COVID? Are we saying is that because of poor marketing? Are we saying that because we didn't spend enough time here — we don't have a brand? Who ultimately is holding them accountable for this — of meeting certain goals — and what are our goals as a City? What do we want to do? Do we want to have three events within eight months? Do we want to have a certain amount of people visit within a six month span? And if we don't meet those, those metrics, what are we going to do about it? What kind of plan do we have in place to fix that moving forward? — April Ramirez, nurse with experience in healthcare management and business development
TBID, Downtown Business Association member and Desert Beacon STR manager Eric Menedez disputed claims made that advertising in Palm Springs is ineffective pointing out Palm Springs residents attending Pride events and interest on the part of Palm Springs Villagefest in wanting to do “more with the Hi-Desert.”
After some Council discussion on the cost of the different phases (Council member Joel Klink), on the phasing (Mintz) and Council process and timeline (Luckino), Mintz suggested they could reauthorize the TBID for one year beginning at October 1, then consider the conversion, “What I'm most interested in is the petition of the hoteliers.”
Mintz moved to table this item for future discussion. Motion to table was passed 5-0.
Read Part One.
Disclosure: Desert Trumpet co-founder and editor Cindy Bernard is a member of the Public Arts Advisory Committee, which is a part of the City of Twentynine Palms.
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