The proposed new contract between Hilton Head Island and its designated marketing organization includes new parameters to give town leaders closer oversight of the Hilton Head Island-Bluffton Chamber of Commerce.
Released publicly for the first time Friday afternoon, the draft contract includes provisions that a third-party attorney annually review how the chamber spends tax dollars to market the island to verify it follows state tax and nonprofit laws.
The draft contract also includes provisions that outline a dozen metrics to measure the chamber's effectiveness and would give the town a hand in choosing what firm audits the chamber's financials each year.
The first-of-its-kind agreement, if approved, would add several layers of new reviews on the more than $1.5 million the chamber receives each year in accommodations tax funding -- collected on lodging and restaurants -- to market the island.
"I think this takes a substantial step forward in addressing accountability and transparency with the chamber," said Mayor David Bennett, who has led the charge for more transparency since taking office almost a year ago. "This is really not a matter of trust or distrust."
Town and chamber leaders have discussed the potential contract behind closed doors for months and, until Friday, had only hinted at what it could include.
They now want residents' input on the parameters of the possible agreement before taking a vote on the contract at the next Town Council meeting on Nov. 17.
"We're trying to get out there early so no one feels rushed," said Councilman Bill Harkins, who helped craft the contract as part of the council's Finance and Administrative Committee. "People can review it at their leisure over the next two weeks and still get back to us with comments."
In total, the five-year contract would essentially formalize much of what the chamber and town already do, including chamber accreditation and regular updates to town leaders.
But it also will give the town a formal seat at the table to help craft the chamber's marketing plan for the island and to pick the firm that audits the chamber. Both of these have typically been handled by chamber board committees, said Finance and Administrative Committee Chairman John McCann.
The contract also would formalize town leaders' ability to inspect all of the chamber's financial records, including third-party invoices, to personally verify those audits, according to the draft document. However, the provision limits those inspections to twice each fiscal year.
If approved, the contract would give council members clearer documents to "show, not tell" that the chamber is meeting its obligations, councilman Tom Lennox said.
Chamber officials have repeatedly said they welcome the contract, and the chamber board already has endorsed the agreement as drafted, town manager Steve Riley said Friday. Chamber president Bill Miles and spokeswoman Charlie Clark were out of town Friday, and attempts to reach them were unsuccessful.
The chamber's harshest opponent argues the contract does not go far enough, however.
Outspoken chamber critic Skip Hoagland, who is waging a legal battle for chamber documents under state public records laws, believes the contract should include a retroactive investigative audit and force the chamber to comply with the state's Freedom of Information Act.
"Having reviewed the contract, I am disappointed and more frustrated than ever," Hoagland wrote in an email Friday evening. "In my opinion, the contract is not worth the paper it is written on.
"Without a clear FOIA provision and an independent audit, the chamber can simply continue its secrecy," he continued. "The so-called 'financial inspection' provision is shockingly weak and inexcusably vague."
Council members have dismissed Hoagland's demand for an audit of past years' financials, and Bennett did so again Friday.
"Personally, I view enacting things like a forensic audit when you have reason to believe things have occurred, like fraud or mismanagement," he said. "I don't have evidence to indicate that, and I can't impute some general statement like that to our chamber. I have no reason to believe any of that."
Instead, the proposed agreement will be a workable solution that improves accountability for the town while maintaining the decades-long partnership the town and chamber already have, Harkins and McCann said.
The majority of the council supports the contract as presented, but Bennett would not say whether he'll vote for it.
"I'm not going to interject myself into that until the vote," he said. "Yes, it's up for a vote, but it's not over yet. It may very well be that at public comment we hear something new and want to incorporate that."
The proposed contract between the town and the chamber of commerce includes requirements that:
- The chamber maintain its current accreditation levels with the Destination Marketing Association International and the U.S. Chamber of Commerce.
- The chamber meet a dozen industry metrics that must be tracked and reviewed on a regular basis. If not met, the contract would establish a process for correcting underperformance and provide for regular inspection of certain financial records.
- The Town Council and chamber receive an annual third-party legal opinion that the chamber is in compliance with state accommodations tax and nonprofit regulations.
- The town leaders participate in the process of selecting future chamber auditing firms.
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- Release of contract with Hilton Head chamber delayed; negotiations continue in secret, Oct. 18, 2015
- As chamber of commerce contract nears completion, Skip Hoagland brings supporters to Town Council, Oct. 6, 2015
- Hilton Head Mayor David Bennett calls out chamber of commerce, critics over contract controversy, Sept. 29, 2015
- Beaufort, Hilton Head chambers of commerce want more county funding, Aug. 23, 2015
- Chamber launches once-controversial app amid contract negotiations with town, July 31, 2015