Business

Release of contract with Hilton Head chamber delayed; negotiations continue in secret

A new contract being negotiated between the Town of Hilton Head Island and the Chamber of Commerce designed to increase transparency apparently won't be finished this week.

Town Council members had hoped their meeting Tuesday would be the public's first glimpse at the first-of-its-kind contract with the chamber, which gets tax dollars to market the town.

Instead, the council wants another closed session to address any final questions or concerns about the agreement's terms, Councilman John McCann said Friday.

"It's really getting close, so close," said McCann, chairman of the Finance and Administrative Committee that is negotiating the contract. "We need another (executive session) meeting to air it one more time, and I hope to get the time frame for when we're going to (vote)."

The contract has been months in the making as the council and Mayor David Bennett attempt to deliver on promises for more financial disclosure and accountability for the chamber -- negotiations which have taken place almost entirely in secret this summer and fall.

This marks the third delay in the highly scrutinized deal, with a vote now most likely bumped back to early November, McCann said.

"No, I'm not frustrated," Bennett said Friday. "Yes, I like to get things done expediently, but not to the sacrifice of doing things right.

"At the end of the day, I want my own legacy and that of my fellow council members to be marked by improvements that stand the test of time for our community and produce the very best results for all of us -- that's what's important."

Council members and the mayor have hinted at the parameters of the proposed contract, but refused to divulge any of the specifics before the vote.

What is clear, though, is that the council's main intent behind the contract is to formalize the town's long-standing partnership with the chamber, which now receives more than $1.5 million in tax dollars each year to market the town.

What is not clear is whether the contract's requirements will go above and beyond the myriad state laws that already govern the chamber's disclosures about how it spends that public money, how it markets the island, and how the town and state can police those efforts.

That behind-the-scenes clash between "business as usual" and Bennett's call for greater transparency are due to come to a head when the proposed contract is finally revealed.

In anticipation of that, here is a brief look at three of the most significant issues that will impact the agreement:

WILL IT HAVE TEETH?

Various local and state reviews already govern the purpose and use of the public funding the chamber receives from the state's accommodations tax on lodging and restaurants.

They include the town's Accommodations Tax Advisory Committee, Town Council, the state's Tourism Expenditure Review Board and the chamber's required annual audit as a nonprofit corporation. The chamber is also regularly reviewed and accredited by the U.S. Chamber of Commerce and Destination Marketing Association International.

Chamber board chairman Jay Wiendl, general manager of the Sonesta Resort Hilton Head Island, detailed the regulations in an editorial to The Island Packet last week. The piece responds to an editorial penned by the mayor just a week before and reiterates that chamber leaders welcome a town contract.

Beyond the existing reviews, council members and the mayor have suggested the contract contain new performance evaluation measures based on Destination Marketing Association International guidelines.

But whether the final contract will put in new regulations or simply affirm those already in place remains to be seen.

TO AUDIT OR NOT TO AUDIT?

Whether the town can or should impose an annual audit on the public tax dollars the chamber receives and spends has been a hotly debated part of the proposed contract.

The chamber already undergoes an audit each year as a tax-exempt nonprofit, but the mayor and some council members have suggested they want an additional review to double-check that spending. That could include the town hiring an independent auditor to review the public funding portions of the chamber's financials, or it could include some kind of certification of compliance from a tax attorney or certified public accountant, town leaders have said.

In either case, the reviewer would be hired by and work on behalf of the town to ensure that person's independence from the chamber.

Those close to the negotiations suggest there will be some kind of provision denoting such a review in the final contract. The details of how have become the most closely guarded piece of the negotiations to date.

THE DEEP CUTS

If an audit were ordered, how deep would it go? And could it peek back at previous years?

This is the main point of contention for outspoken chamber critic Skip Hoagland, who believes a retroactive forensic audit would reveal financial malfeasance by chamber administrators.

Hoagland argues the annual audits the chamber undergoes now are minimal and could be skewed because the auditing firm is hired by the chamber.

Council members and the mayor have bristled at the suggestion, saying their contract will only address the town's relationship with the chamber going forward.

If there were provisions about some type of audit or review in the new contract, they won't go as far as Hoagland wants, leaders have said.

Follow reporter Zach Murdock on Twitter at twitter.com/IPBG_Zach and on Facebook at facebook.com/IPBGZach.

Related content:

  Comments