PHA counters city's court claims
The summer tourism season is rapidly approaching, but more than $200,000 earmarked for tourism marketing remains unspent and on hold thanks to the ongoing dispute between the City of Penticton and the Penticton Hospitality Association.
According to records obtained by the Western News under a freedom of information request, the city is holding $206, 898.98 received from the province for August through November 2013, money raised through the two per cent additional hotel room tax by local accomodators and formerly being passed to the PHA for external marketing of the city.
That ended on Oct. 31, 2013, when the city declared the PHA was in breach of their contract to control the HRT funds. At stake are HRT funds totalling more than $428,000 in 2011, $432,000 in 2012 and $443,000 in 2013; more than $1.3 million over the three years Penticton’s tourism marketing has been in flux. In the termination letter, also obtained through a freedom of information request, the city’s lawyer, Tyrone Duerr of Boyle and Co., cites four reasons for the termination: that the PHA failed to spend HRT funds in 2012 and 2013; that they failed to make financial data available for the city to review and that the PHA failed to act in a punctual and professional manner.
The final point is that the PHA hired Tim Hodgkinson to handle the HRT marketing, a PHA board member in “an obvious conflict of interest.” That, Hodgkinson said, is a false accusation, as are the other points included in the termination letter and that the city cited in their petition for an injunction to prevent the PHA from spending any of the HRT funds still in their possession on external marketing.
“The city conveniently dropped two of them in the courtroom, one of which was any accusation against me,” said Hodgkinson, adding that the main point the city’s case focused on was the alleged lack of spending.
“Council believe that the failure of the PHA to spend any HRT money in 2012 (other than those funds earmarked for spending by the Tourism Society and in cooperation with the previous executive of the PHA in the first half of 2012) is unacceptable,” writes Duerr in the termination letter.
That, along with the other points made by the city, are false accusations according to Hodgkinson, and that marketing for 2012 and 2013 was not compromised, despite the city’s claim in their petition for an injunction.
The city themselves spent the money for 2012, he said, and in 2013, the PHA exceeded their projected budget. He admits there were surplus funds, but those were funds the city didn’t spend in 2011 and 2012, which the PHA wasn’t aware of until late in 2012, having taken over in July 2012.
“Over the course of the end of 2012 and the beginning of 2013, we recognized there were indeed these surplus funds, the money that the city hadn’t spent,” he said. “They accused us of not spending money but they had passed us a load of money they hadn’t spent in 2011.”
Hodgkinson also dismissed claims that the PHA hadn’t been making financial data available so the city was fully aware of how the money was being spent, including a financial audit for 2012, which the city received in mid-October 2013.
“They were happy with the information we were supplying, because they weren’t complaining. We were giving them monthly financials and at one point we even gave them our general ledger,” he said, adding that the city seemed to be shifting the requirements they were making for the PHA over the 16 months before the termination.
“They then moved the goalposts. It was calculated to try and make us non-compliant, that is what they were trying to do,” he said.
The city and the PHA spent three days before a B.C. Supreme Court justice last month airing their arguments. A decision is expected later this month.