SAN DIEGO (CNS) - An amendment to the city of San Diego's contract with its Tourism Marketing District, which will free up more money for advertising the area as a vacation destination, was passed by the City Council Thursday on an 8-1 vote.
The action voids a previous deal that ended a months-long struggle over funding for tourism promotion earlier this year.
The new plan is designed to protect the city's general fund against lawsuits over the way the district is funded while releasing more money to the agency. The standoff between former Mayor Bob Filner and the city's hotels put campaigns that advertise San Diego tourism on hold.
According to city Financial Management Director Craig Sturak, hotel tax revenues to the city are falling below budgeted levels, despite a big first month to the current fiscal year fueled by Comic-Con International.
Under the basic funding arrangement, hotels collect a 2 percent levy on room rates and send the revenue to the city. The charge is separate from the normal room tax.
The city turns the revenue over to the district -- commonly known as the TMD -- to promote San Diego to tourists and support special events that bring visitors to town.
The lawsuits challenge the 2 percent levy as an illegal tax.
Filner's plan called for hotels to pledge to indemnify the city in case any legal judgments invalidated the district, which would require the money to be paid back. His deal, which Councilman and now-mayoral candidate David Alvarez helped to negotiate, resulted in only 18 percent of collections actually going to the TMD because so few hotels ended up agreeing to protect the city, according to municipal documents.
Alvarez was the lone dissenter Thursday.
The new agreement will provide the TMD with an extra $6 million to use for promotion, with $4 million held back to establish a reserve account which could be used in the event of an adverse legal judgment. The reserves will grow annually to $30 million by 2017.
"I think we have to acknowledge that even in this agreement there is a holding back of some of those funds, and it's for a reason, there is a risk," Alvarez said. "How comfortable each one of us is with that risk is, I think, what this comes down to."
He said he didn't have enough data to show a return on investment for the agency's advertising efforts that outweighed protecting the city's finances.
Councilman Kevin Faulconer, who will face Alvarez in the mayoral runoff election next year, said fewer visitors to San Diego means less room tax income for the city budget.
"We're talking about jobs, but we're also talking about revenues that we use in this city every single day to pave our streets, to keep our libraries open, to keep our rec centers open," Faulconer said. "(The room tax) is the third-largest source of revenue that we have in the city of San Diego."
Council President and Interim Mayor Todd Gloria called the amendment "a no-brainer" that should have been done several months ago.
"I think it's a reasonable and practical approach to mitigating the risk, while making sure we're doing the best we can to grow jobs and stimulate our local economy," Gloria said. He said the amendment has more legal protection for the city than Filner's deal.
Gloria said the reserve money will be released to the TMD as soon as litigation concludes.
Thousands of people marched through downtown San Diego and San Marcos in the second annual Women's March Saturday. The San Diego event began at 10 a.m. at the downtown Waterfront Park on Pacific Highway, while the North County event began at 11 a.m. at Palomar College.
Thousands of people marched through downtown San Diego and San Marcos in the second annual Women's March Saturday. The San Diego event began at 10 a.m. at the downtown Waterfront Park on Pacific Highway, while the North County event began at 11 a.m. at Palomar College. The two marches were held in conjunction with other marches across the country.
The federal government shut down at the stroke of midnight Friday, which prompted the closure of many federal operations, such as national parks and monuments and that included the shutdown of Cabrillo National Monument.
Chilly temperatures and scattered showers started the weekend. Temperatures at the coast and inland communities hovered around 60 degrees with some areas of San Diego County receiving rain during the morning hours.
A transient accused of fatally stabbing a man after they got into an argument near a 7-Eleven store in Poway pleaded not guilty Friday to a murder charge.
Coastal rail closures could complicate the commute for the thousands of people expected at Women's Marches set for downtown San Diego and San Marcos Saturday, though additional transit options are being made available.
A man arrested in the doctor's lounge at Sharp Grossmont Hospital in La Mesa after claiming to be an anesthesiologist pleaded not guilty Friday to a felony charge of treating the sick without a certificate.
People who bought new homes in Otay Ranch's Village of Escaya can start moving in Friday - later than planned but after the developer took steps to address methane found at the site.
Recent assaults by tactical teams on prototypes of President Donald Trump’s proposed wall with Mexico found their imposing heights should stop border crossers, The Associated Press has learned, a finding that’s likely to please security hawks but raise concerns about costs and environmental damage.
Two of the region's largest federal enterprises, military bases and border patrol, are unlikely to face major disruptions in the event of a looming government shutdown that experts say likely is to occur at midnight.