PHA and city headed to litigation over tourism funds

Single organization to handle tourism marketing for Penticton is about the only thing the city and the PHA agree on.

The need for a single organization to handle tourism marketing for Penticton is about the only thing the city and the Penticton Hospitality Association agree on.

But that hasn’t stopped lawyers for both the PHA and the city from readying their arguments as the legal battle enters its preliminary stages.

PHA director Tim Hodgkinson said the city may not have had all the information it should have when city council made the decision to strip control of the two per cent hotel room tax, about $400,000 annually and award it to Tourism Penticton, saying the PHA had not been living up to the terms of a five-year contract signed last year.

Hodgkinson said city council should have been aware of how far along negotiations were between Tourism Penticton and the PHA, especially since a city staff member, Chuck Loewen, sits on the Tourism Penticton society executive.

“In my own mind, I don’t believe that we were close. If I felt we were close, then we wouldn’t have taken the action we did,” said Mayor Garry Litke.

“It’s not the PHA’s job to manage other organizations, we do understand that if the city was given selective information or wasn’t in receipt of the full facts, then they may have made this decision incorrectly,” said Hodgkinson. “There is always an opportunity for cooler, calmer decision making that’s based on full receipt of the facts. Everybody wants this behind them and to just get on with getting on.”

However, Hodgkinson said it has been an uphill battle over the past year trying to create a good relationship with city hall. The PHA, he said, isn’t aware of not meeting any of their contractual obligations.

“If it’s not one problem then it’s another. It’s a constant barrage of legal correspondence,” he said. Any requirements that may have been delayed, he continued, are due to the city not communicating fully and clearly with the PHA.

“It’s always shifting sands and goalposts. It’s been very frustrating.”

“Over the course of some months, the PHA believes it has been subjected to a campaign designed to hinder and ultimately derail its efforts,” the group stated in a press release announcing their choice of Alfred Kempf, a lawyer with Pushor Mitchell LLP to act on their behalf.

Litke denies there is any animosity on the part of the city or in their actions.

“Our only motivation in taking the actions we have taken is our need to comply with the agreement that was made with the province and the PHA,” said Litke.

“We all agreed to a contract and despite months of negotiation and a mediation process in September, we did not feel the agreement was being honoured in the way it needed to be.

“I hope that at the end, we will have one organization working to promote tourism in Penticton, working from a single budget.”

The city’s objective, according to Litke, is to create more efficient use of the tourism budget.

“Right now, with the people working at cross purposes and now beginning to spend money on legal fees, the money that should be spent on tourism marketing is being diverted and that is a cause for some concern,” he said.

Earlier this month, the city said $21,000 had already been spent on legal fees.

“It’s never too late. I always believe in negotiation, even if there is a legal action taking place. Sometimes it takes a legal action to get to a table to talk seriously,” said Litke.

He’d like to see the two groups continue their negotiations.

Hodgkinson echoed Litke’s comments, but added there had been no contact from the city since the letter advising the PHA of the city’s actions.