A watchdog panel criticized the City of Lompoc for an inadequate system of checks and balances, recommending better oversight of the Visit Lompoc tourism organization amid questions about unaccounted-for funding adding up to hundreds of thousands of dollars.

The 2023-24 Santa Barbara County Civil Grand Jury’s criticism stems from the tourism business improvement district funding generated by guests staying in Lompoc hotels. The funding goes to Visit Lompoc, which operates as Explore Lompoc to attract tourists.

However, Lompoc officials on Monday said City Attorney Jeff Malawy had responded to many of the allegations in an eight-page report to the City Council in May 2023, concluding that claims raised by resident Martin Bender “are without merit.”

The grand jurors report, Lompoc Tourism Improvement District Management Agreement 2019-2028, released recently knocks the nonprofit group for lacking transparency regarding how funds get spent, questioning accounting for thousands of dollars. 

“Accounting is not a disappearing act, and neither cash nor accrual methods cause year-over-year carryover discrepancies of this magnitude,” the panel stated.

California’s Property and Business Improvement District Law of 1994 spells out the rules for organizations such as Visit Lompoc, including that funds can be spent only on tourism enhancement projects and cannot be used for general purposes. Similar organizations, such as Visit Santa Ynez Valley and the Santa Maria Tourism Marketing District, exist to fund tourism organizations in other North County communities.

The report notes six findings and makes 10 recommendations. 

“These recommendations will enable a transparent relationship benefitting all parties, including the businesses, residents and tourists of Lompoc,” the report stated. 

One recommendation calls for the Lompoc City Council to instruct Visit Lompoc to conduct an independent audit, and calls for the organization to use its excess funds to pay for the audit. 

Grand jurors raised questions about financial discrepancies adding up to more than $500,000. 

“There has been a consistent lack of oversight by Lompoc,” the grand jury report stated.

The report stated that a Visit Lompoc board member, who was not named, volunteered during a Lompoc council meeting to have an independent audit conducted of the organization’s financial records, but the grand jury did not find any evidence that an audit has been requested or completed. 

By the end of 2024, the panel recommended, the Lompoc City Council should re-evaluate the terms of the agreement to determine whether the 3% fee assessed on hotel customers is achieving its intended objectives. 

Visit Lompoc board members said they neither concurred nor disagreed with the jury’s findings of Lompoc’s analysis, according to the report. 

The organization uses a consultant, Civitas Advisors, to help prep its annual report, but the firm didn’t complete a 2023 report because of several issues that grand jurors were not able to identify, according to the report.

Visit Lompoc has a five-member board made up of people involved in the community’s hospitality industry, with Gilda Cordova serving as president. 

Cordova also serves on the City Council, and the same people making allegations about Visit Lompoc had alleged that she didn’t live in the city, which she vehemently disputed.

The four additional board members are Preyesh Patel and Atul Patel from Hilton Garden Inn, Paul Patel from Lompoc Valley Inn & Suites and Ken Ostini, a retired Lompoc Valley Chamber of Commerce leader. 

Other similar tourism groups, including those serving Santa Maria and the Santa Ynez Valley, have board agendas and regular reports readily available on their websites, but Visit Lompoc does not. 

Santa Maria’s similar organization falls under the Santa Maria Valley Chamber of Commerce while Visit SYV is an independent organization.

The grand jury has ordered the Lompoc City Council to respond to the findings and recommendation within 90 days, and city spokeswoman Samantha Scroggin said a formal response to the panel will be submitted within the allotted time.