Weighing the Rusty plan
Several years ago, an attractive young lady came to see me at my office. She announced that she was there on behalf of the Mountain and CEO Rusty Gregory, and that she had plans that would remake Mammoth into a new and improved version. The plans she presented were for Rusty’s notorious gondola that would have required a parking lot at the entrance to town where all our visitors would be required to park. They would then board the gondola and be whisked high over Main Street to the Village and the Mountain, where they would be allowed to disembark, choose their hotel, do their shopping, etc. Main Street would effectively become a ghost town and the Village and the Mountain would happily benefit from all the commercial activity formerly enjoyed on Main St. by the longtime merchants and restaurateurs there.
Many of Rusty’s admirers in the Town were very much in favor of this approach; they said we would be saved from economic decline and the property owners on Main Street would all become rich hoteliers. Of course, the “Rusty Plan” would have been paid for with a bond issued by the Town. In other words, taxpayer dollars would support a magic carpet that would deliver millions of dollars of business to the Village and the Mountain, leaving the Town behind. As I escorted Rusty’s blonde emissary from my office, she was aghast that I did not wish to cheer the plan as something great which would imminently occur in Mammoth.
Subsequently, reality took hold and people started to realize that substituting empty hotels for busy shopping centers would have been good for the Mountain but not for Main St. The “Rusty Plan,” or, as Mark Wardlaw, the Town Planning Director called it, “a bus on a string,” was put far on the back burner where it belonged.
Now, under the pressure of the Town’s massive loss in the airport litigation, some people are suggesting that a “lift tax” is the way out of our present mess. In response, Rusty has come up with a new plan, a “business improvement district” that would grow “the pie,” meaning the total amount of business done in the town, and grow it so big that it would generate unprecedented levels of local taxes, and a lift tax would not be needed to pay the tab for the latest disaster.
Specifically, Rusty says, local businesses would tax themselves to create a fund for marketing that would really get Mammoth up and moving. In return, Rusty advises, he would quit doing his cutthroat competition thing against local businesses and instead would cooperate to grow the pie for everyone, instead of simply trying to cut himself in for a bigger piece.
Okay, full disclosure, I am a business and property owner on Main Street and Old Mammoth Road, and I, and my tenants, would be among the group of people paying the additional taxes Rusty is talking about. Also, it is true, (see above) that I tend to be skeptical of “Rusty plans.”
That said, we desperately need a way out of the hole that the Town has put itself in, and we are just as desperately in need of leadership that will show us how to do that. The Mountain is our biggest enterprise and the greatest driver of our local economy, so why shouldn’t the head of the Mountain be the leader here? Just as important, to have the Mountain change from a fierce competitor with local business to a cooperator that would enhance its own operation and the locals, all at the same time, would be more than welcome. But as some wise sage once said, the devil is in the details.
Some people are suggesting that the new “Rusty Plan” is just a ploy by which Rusty will acquire a huge marketing budget courtesy of the local merchants and landlords, which the Mountain can use to its best advantage. The Mountain’s contribution would then be a portion of the money it presently spends on marketing anyway, so it would not actually have to come up with a dime of new cash. If a BID (Business Improvement District) were created and then stocked with Rusty surrogates and Mountain employees, the Mountain could easily decide that the best way to spend marketing dollars is to promote the Mountain and its “visitor experience,” and then we’d have the marketing equivalent of a gondola right over the town, and be right back where we started.
But, as the surrogates will be shouting when they read this, “you can’t be negative about a good idea because of where it comes from, if you are going to oppose everything that Rusty proposes, you’ll throw the baby out with the bath water, and that would be a total over-reaction! While I think that’s fair, we still have to take a close look at what Rusty suggests.
First we need to look at where are we now, and to do that, let us regress a little. The problem facing the Town and the Mountain is that our ski business comes mainly on the weekends, when the Town has a huge influx of visitors and neither the Town nor the Mountain has much room for improvement after the first 20,000 people get here to ski. Meanwhile, we have the same capacity for 20,000 plus skiers Monday through Friday, but the Town and the Mountain are largely empty during that period. So the measure of a successful winter marketing program is whether or not business has increased substantially during “mid-week” when we have the capacity, but don’t have the visitors.
If memory serves, didn’t the townspeople and the business community vote to create a huge fund for marketing by increasing the T.O.T. tax from ten percent to thirteen percent? Wasn’t this going to attack the “mid-week” problem and help solve the real shortcoming of Mammoth as a business? At the same time, since the Mountain was sold by Dave McCoy, hasn’t Rusty been in charge of a substantial ten million dollar marketing program that would propel the Mountain into the first rank of ticket-selling ski areas like it used to be?
In short, have we experienced success? The numbers argue otherwise. The point of this analysis is that creating a “huge” fund for marketing is no guarantee of success all by itself. There simply is no history to prove that, should local businesspeople agree to augment or replace the Mountain’s marketing money, that such an activity, all by itself, will solve our problems. Further, is there any way to guarantee before forming the BID that the money will be spent on marketing for the entire Town, not just the Mountain and/or the Village? And, can we vote to take back our additional three percent of T.O.T. and give it to the new BID to spend? I doubt that the Town government would be wild about that idea. These are some of the concerns that the new “Rusty Plan” creates. Clearly the “Plan” needs much more detail. How much would the “Plan” raise? Who would run it? What would be done with the money? Would there be a period of time for it to “succeed” or would the tax go on forever? Would we just be creating a new bureaucracy? How would this help the Town solve its financing problems in the short term, and the long term? What uses would the money raised be put to?
I think that it is terrific that Rusty has seen the light and is prepared to take the Mountain and himself into a real partnership with the Town and its businesses. We should all encourage that. On the other hand, we need to look closely at programs and proposals that would create huge new taxes. So far, huge new taxes do not have a favorable track record for solving huge new problems or even old ones. It has to be “buyer beware” before we go down that road again. I believe we should give the new “Rusty plan” every opportunity to be explained in detail. When the dust settles, let’s make sure the promise and the performance end up being the same thing.
Let’s honor our commitments
In the face of significant financial challenges, the citizens of Mammoth Lakes are looking for solutions to keep programs and infrastructure, like the Whitmore Pool, open, alive and well. To do this, we must stay focused on win-win solutions, think out-of-the-box and honor our commitments. Our primary commitments include the MLLA (airport) lawsuit settlement and our voter approved tax measures – R, U, A and T.
The MLLA settlement is clearly outlined and not subject to interpretation. There is risk, however, that we might “play” with our commitments to the tax measures.
People in this community who want to preserve the integrity of Measures R & U as well as prior Measures A & T have the right to expect that the Town leadership will uphold their integrity. We talk about temporarily using these funds to cover shortfalls and loaning monies to cover unanticipated financial obligations. However, regardless of the circumstances or the language, using special tax measure funds for anything that the general fund has funded in the past is supplanting. There is no “playing” with that fact.
The right answer to loaning money to the air guarantee or funding Whitmore pool operations and maintenance, or the laundry-list of other items that will come before Council with measure money as the solution is to take it to a public vote. If it is truly the will of two-thirds of the voting community to supplant, then the right thing to do is to go back to the voters to approve it. Otherwise, it’s the squeaky wheel getting the grease, the community at large being left with its trust violated, and the Town vulnerable to another lawsuit. This is not win-win.
The importance of “special taxes” throughout the state of California is very real. I have worked on many projects and programs funded by special taxes and I’ve earned a very real understanding of the gravity of violating the public trust when it comes to spending special tax dollars.
A Little History
Special tax districts in California came into existence because communities recognized that essential services and projects they desired were not being delivered by the established government agencies. It took several measures going to the ballot which were challenged in expensive lawsuits to define supplanting and require a two-thirds vote to pass these sales taxes. These are the tax measures that set precedent in the California special tax community as to the accepted definition of supplanting.
Since those early days, many more counties and some cities have passed special tax measures, mostly for transportation expenditures. To the best of my knowledge, no other agency has attempted to supplant general fund obligations with these special tax monies. This is because these measures have endured a great deal of scrutiny to gain the public’s vote to pay for the promised
projects and services. In the transportation industry, it is understood that ANY supplanting language, especially combined with a 2/3rd’s vote, is a clear signal that the intent is NOT to use these special taxes to replace monies traditionally funded by the agencies general fund, even if those fund sources are no longer available.
The TOML special tax measure campaigns had clear messages that these monies would not be for the Town’s general fund use, but for improving and enhancing the quality of life through improving our parks, recreation, trails, arts and culture, transit and mobility. In lieu of listing specific projects and services as many special taxes do, our Measures and our Town committed to specific, thorough and detailed processes for spending these dollars (the Measure R and Measure U application processes) and approving projects that meet the intent of the law and the campaigns’ promises. Just because the Town is in a financial position that challenges the traditional funding for existing services does not represent an opportunity to change that commitment and promise. There could easily be legal implications to such actions.
If we as a community want to consider using these funds (R, U, A and T) to replace general fund monies, please take it to the voters. They’ll tell you how they are willing to spend this money. Otherwise, honor the funding source commitments and adjust the general fund spending accordingly.
We must take the opportunity in all of this chaos to think outside the box. We have so many good options and people willing to make it all happen. Let’s find the win-win for everyone so we build the trust within our community to work through our challenges as good neighbors.
Joyce Clark Turner
Measure U Application Committee
California Licensed Civil Engineer