By Raiza Giorgi

The troubled relationship between the Solvang City Council and the community’s two primary groups supporting local business and tourism remains unresolved after a special council meeting on July 23.

With an emotional audience packing the room, the City Council approved a three-month contract with the Solvang Chamber of Commerce on a 3-2 vote but tabled further discussion of a contract with the Solvang Conference and Visitors Bureau.

The chamber’s contract, with $37,500 of city funding, is intended to support previously committed events and programs such as the Music in the Park concert series and production of a “Walk, Shop, Wine, Dine” map of the city. Councilmembers Daniel Johnson and Chris Djernaes dissented on the vote.

When Djernaes questioned why chamber Director Tracy Beard was not in attendance and why reports and presentations had not been made, Councilwoman Karen Waite responded that the council had canceled the agencies’ presentations at the last meeting after canceling their existing contracts in a closed session. Beard was attending a conference in Chicago.

Interim City Attorney Chip Wullbrandt added that the chamber’s report for the fiscal quarter ending June 30 typically isn’t due until the end of the following month, so the council would be getting a full report from the chamber soon.

Further discussion of the Solvang Conference and Visitors Bureau (SCVB) contract was tabled until Monday, Aug. 12, after SCVB representative Jessy Verkler said the contract in front of the council was not the same as the one the agency’s board had approved.

“The contract you have in your packet was not what we decided as a board to accept,” SCVB representative Jessy Verkler told the council.

The two parties said they would go back to the negotiation table to resolve the issues.

The SCVB had asked for a year-long contract to support its scheduled events, including some for which tickets had already been sold, but city representatives had countered with an offer for six months.

One issue was the Christmas-season Julefest celebration.

Djernaes asked when Julefest occurs and whether it falls in early December.

“The question has more to do with, is it possible to put on two events? They can have their Julefest, which is great, but I think last year they did it at the very beginning of the month.”

Audience members began grumbling and one woman shouted, “It runs the whole month of December,” prompting Mayor Ryan Toussaint to call for decorum.

Solvang’s Julefest celebration this year is scheduled from Nov. 29 though Jan. 5.

The SCVB’s tax situation was also questioned. The nonprofit tourism agency’s representatives said they had been late filing their 2017 and 2018 returns but received extensions and incurred no penalties.

“Maybe their nonprofit (status) has been revoked. We don’t know,” Johnson said, adding that he wondered if the city could be held liable for the organization’s missed tax deadlines.

Verkler said the agency goes through financial audits by the city every year, gives the city regular reports and works with the city’s finance staff. City Manager David Gassaway confirmed the city auditor did review SCVB finances for 2017-2018, although with a checklist that had some items left blank. Mayor Ryan Toussaint then questioned the validity of that report and whether the audit was really completed.

During public comment of the SCVB contract, local businessman Kenny “Esko” Lama said that the city needs to change tourism because there is a duplication of events by other local tourism agencies.

“We want smart tourism with less costs and more efficiency. It’s time for a change. We don’t want day trippers only spending $20 per visit. We are against wasting 20 percent of the city’s budget on two incompetent and ineffective organizations,” he said. “Like most of the business owners we do not benefit from them. I’m sure a better way can be done with more professional organizations,”.

Former Councilman Hans Duus argued that taking away funding from tourism promotion is a dangerous idea, as the city has spent 35 years building up the SCVB.

“If it was not for tourism we would still be a municipal improvement district (rather than an incorporated city). There isn’t enough tax base to run a city government. Go out to secondary streets of Los Olivos and Santa Ynez. We are spoiled here with curbs, gutters and sidewalks,” Duus said.

“Tourism is a fickle thing. You’re in one moment you’re out the next. When we started we were the only game in town; now there’s attractions everywhere and competition. Cut back for six months and you might not feel it, but long term with significant reductions, the further out you get from promotion the more you will,” Duus said.

Resident Michelle Boyle responded to angry comments from some councilmembers about detractors in the audience and supporters who weren’t at the meeting.

“I’m a person who has not made any negative comments, doing reading and talking with friends, staying interested. It is unrealistic you won’t have strong opinions expressed. No idea who supports or (is) really watching — I would like our interactions to be respectful and labeling to stop,” Boyle said.

Lawrence Gerard, director of the Solvang Nativity Pageant, said that the $1,000 contribution from the SCVB to the pageant roughly equates to $12,000 in city “bed tax” revenue, which shows the rate of return on the city’s investment. The pageant is always sold out, with the majority of the tickets bought by tourists who stay in hotels, shop locally, and patronize the food and drinking establishments.

“If you don’t plant the corn, there’s no harvest,” Gerard said.

Nancy Orchard spoke out against the organizations, saying a vocal group has run the city behind the scenes for years.

“The chamber and the SCVB is the biggest elephant in the room for the current drama the city is having and hidden agendas that have run throughout Solvang for too many years to count,” Orchard said.

David Rasmussen gave a history of bed tax funding and how it started with hoteliers about 50 to 60 years ago because they wanted to advertise the region. They created a tax that was collected and administered by Santa Barbara County, which added 10 percent to each guest’s bill.

Then voters passed Prop 13 and property tax collections stagnated, and creators of the bed tax realized they had made a mistake by allowing that money to go into governments’ general fund.

“It was strictly for advertising, but now runs the city. You’ve really stolen the bed tax money,” Rasmussen said. “Without the tourist dollar we wouldn’t have the hospital, the festival theater, the YMCA, I wouldn’t be buying building material to remodel the bathroom, support groups. It’s key, and our industry. It’s important we not mess with this too much. It’s a long way to correct. I respectfully ask you tread on this with care. You’re messing with my livelihood.”

Councilmembers then complained about how they have been portrayed in the news media and community. Johnson said they have had to deal with “fake news” regarding their actions with the two agencies, after several media outlets including the SYV Star questioned whether the cancellation of the two agencies’ contracts in closed session violated the Brown Act. The Brown Act requires, with some exceptions, that public agencies conduct their business in open session.

Wullbrandt’s office responded to the SYV Star’s letter asking for public records related to the contracts, saying they do not believe the action violated the Brown Act. However, the Star has yet to see any supporting documents or other justification for the council taking action on an item that had not been included on the night’s agenda.

Noozhawk North County Editor Janene Scully contributed to this report. She can be reached at jscully@noozhawk.com.