San Diego City Council Passes Resolution Requiring Mayor to Sign Agreement

The San Diego City Council has passed a resolution 6-1 approving an operating agreement with the San Diego Tourism Marketing District (SDTMD). This resolution restates the council's prior approval and requires San Diego Mayor Bob Filner to sign the operating agreement in the form in which it had been approved.

Previously, San Diego Superior Court Judge Timothy Taylor had ruled that Filner has the discretion to not sign the agreement that would release $30 million in funds to the San Diego Tourism Marketing District, according to a statement from Filner's office. The SDTMD had filed the suit against Filner because he had refused to sign the five-year operating agreement.

Part of Taylor's ruling, however, redirected the issue back to the city council. According to a statement from SDTMD Chairman Terry Brown, the ruling made it clear that it is within the city council's authority to adopt a resolution directing the mayor to sign the contract.

"The council unanimously voted to approve [the] settlement agreement...with its November 26, 2012, approval of the TMD Assessment and Operating Agreement. The court is directing the council to reaffirm this point," explained Brown.

Before the council voted, Filner spoke about the changes he'd like to see in the agreement. "All I'm asking...is for transparency. That the knowledge is open to everyone," said Filner.

Councilman Kevin Faulconer directly addressed the travel-industry employees who attended the city council meeting. "This industry and what it means to our city's bottom line is incredibly important. Know that you are valued and that we need to you to be successful in all our sectors," said Faulconer.

According to the SDTA, travel is San Diego's second largest industry, contributing $18.3 billion in total economic impact in 2012.

"There are many people whose jobs are on the line... This is why I think the council must act today," said Council President Todd Gloria.

The controversy revolves around a 2 percent assessment on hotels that is specifically used to promote tourism. The assessment was approved and put into place prior to Filner taking office on December 3, 2012. But in order for the funds collected by the assessment to be released, Filner must sign an operating agreement governing the transfer of funds to the SDTMD.

Also affected by this case is the San Diego Tourism Authority, which receives 80 percent of its funding from the SDTMD. The tourism authority has issued 60-day layoff notices to 85 employees, but the organization will be able to retain its employees if the funding comes through, said SDTA President and CEO Joe Terzi in an exclusive interview with Association News.

"It is inconceivable that San Diego would not have any resources to promote itself," said Terzi. "We're dealing with a mayor who has a whole different approach to tourism and ... what we see as challenging beliefs about the tourism industry."

"Many of our staff have dedicated their careers to our organization and the local tourism industry, and this affects everyone from our accounting and IT teams to our award-winning sales and marketing associates," Terzi said in a press release.

The only SDTA department unaffected by the potential layoffs is the citywide sales team, which books major conventions and trade shows at the San Diego Convention Center, according to the SDTA. "The responsibilities and roles of the citywide sales team remain intact and are not impacted by the SDTA's current funding challenges," said the SDTA statement.

Terzi also indicated that the expansion of the San Diego Convention Center would not be affected.

"The mayor is a supporter of the convention center expansion and has not challenged the funding of the convention center," said Terzi.

On March 11, a California Superior Court judge ruled that the $520 million collected from a hotel-use tax to fund the expansion of the convention center was collected legally. Terzi said the next step is a review of the planned expansion by the California Coastal Commission and, of course, any appeals that may come from the judge's ruling. Concerning the review by the commission, Terzi said, "A lot of us feel very confident that that will be a positive declaration, probably with some opinions, but I think it will be more positive and get us prepared to start building in the future." The review by the commission is expected in June.