Rusty elaborates … presents further details regarding BID proposal

At a meeting of community leaders held at the Mammoth Lakes Tourism offices on Thursday afternoon, Mammoth Mountain Ski Area CEO Rusty Gregory laid out further details regarding the proposal to establish a Town-wide BID (Business Improvement District).

Gregory suggested the following BID parameters: that lodging pay 1% of gross revenues, that retail establishments contribute 1.5% sales tax, and that the Mountain contribute a 2% admissions fee (on lift ticket sales).

The three components of the proposed BID would be expected to raise some $6 million annually to be put towards an aggressive marketing effort.

The initial time horizon for the BID would be five years with a renewal clause.

Gregory’s support for his own proposal is based upon two conditions:

1.) “Council takes nothing off the table [in regard to its funding support of Mammoth Lakes Tourism] or we’re out.”

2.) If Mammoth’s Town Council imposes an admissions tax, the Mountain is out.

The difference between the admissions fee and an admissions tax is that the fee, being voluntary, would have a sunset.

The proposal certainly gave those attending the meeting something to chew on.

Before Gregory laid out his plan, Footloose Sports’ Tony Colasardo said any sales tax number under 9% would be “palatable.”

Kittredge Sports’ Tom Cage said that in his conversations with his own staff and others, going to 8.5% was not an issue.

With the state passage of Proposition 30 and the Town’s existing Measure R committment of a half-point, Mammoth’s current sales tax rate is 8%.

A sales tax hike of 1.5% proposed by Gregory would push Mammoth’s sales tax rate to 9.5%.

Gregory reminded those in the room that the Mountain would be paying the same tax and that it does more business.

He also believed that retail should pay more than lodging because lodging “already carries enough of a burden.”

Gregory confirmed that the Mountain’s participation is above and beyond what it currently spends in marketing dollars. “We think this is a new revenue source.”

The Sheet asked Gregory if the Mountain would continue to fund the winter air subsidy out of its own marketing dollars or would he expect the BID to take care of that responsibility.

Gregory said it should be up to the group to decide whether it’s a group or Mountain responsibility, but that “this is not a scam for us to come up with money for air service.”

The group should decide its commitments, said Gregory, whether it be to subsidize commercial air service or shelve it.

Gregory said MMSA paid a $3.3 million commercial air subsidy last ski season and typically budgets $1.5 million for the subsidy for winter flights.

When asked whether the Mountain’s commitment would still be valid in the event of a sale, Gregory said, “We wouldn’t be working so hard on this if we were for sale.” That said, MMSA’s commitment would stand for the next five years, regardless of ownership.

The timeframe for implementation of the BID, according to Mammoth Lakes Tourism (MLT) Executive Director John Urdi, is May 1, 2013 if all goes well.

The voting on approval of a BID is based upon just those entities that are affected. The voting can be conducted on a piece-by-piece basis (a separate lodging vote, a separate retail vote, etc.) or can be conducted as a whole.

The weight of one’s vote is proportional based upon revenue, but no single entity can exercise more than a 40% share.

A BID requires 51% approval for passage.

Urdi emphasized that MLT has been talking about a BID for two-and-a-half years and that “this doesn’t have anything to do with December 5 [when the Town finalizes its restructuring plans triggered by the airport litigation judgment].”

Legal Eagle 

In the wake of the Town’s $48.5 million settlement of  its airport litigation, many local residents have questioned the amount of money the Town is spending on upper management, particularly in regard to retaining both a Town Manager and Assistant Town Manager who each cost the Town well in excess of $200,000 to employ.

But when it comes to annual compensation, Town Manager Dave Wilbrecht and his Assistant Triple M can’t hold a candle to Town Attorney Andrew Morris.

Public records obtained by The Sheet indicate that the Town paid $368,050 to Morris’s firm Best, Best and Krieger within the past 12 months.

This number is independent of what the Town spent on its bankruptcy experts.

Unlike former Town Attorney Peter Tracy, who was a Town employee, Morris’ firm is contracted and paid on an hourly basis.

“Everything is done on an hourly basis,” said Morris, “because that’s what the Town wanted to do. Going forward, [the cost of] legal services should come in lower because the bankruptcy is done.” Morris estimated the Town should expect to pay about $250,000 annually for legal services.

Note: Last year, BB and K billed $68,750.96 to the Town in bankruptcy work, according to Kirkner’s calculations (not a math major).

Tracy, by contrast, used to make approximately $165,000 annually plus benefits.

Morris said, however, that his is a larger firm that handles all manner of items which Tracy may have once contracted out elsewhere.

Morris says he personally spends about 40% of his time on Mammoth matters, though this percentage does not reflect the total time his firm spent on Mammoth.

BB and K’s basic rates, according to the contract it has with the Town, are $205/hour for attorneys and $130/hour for paralegals and clerks.

For “special legal services” the rates are $255 and $150 respectively.

For “complex legal services” $295 and $165

For bankruptcy, $450 or $470 depending upon the attorney.

Cost reimbursement for Morris’ travel = billing for one half of the roundtrip he makes from Truckee to attend Council meetings in Mammoth. The billing is for both time and mileage.

As an FYI, Morris also serves as Town Attorney for Truckee, Woodland and Jackson.

Truckee has him on a monthly retainer. The other communities, like Mammoth, compensate him on an hourly basis.

Mayor Matthew Lehman said of Morris, “We haven’t been using him nearly as much [recently] … I’m confortable with it [the contract]. I like the firm. And I like Andy. Unlike most lawyers, when you ask him a question, he gives you an answer.”