The Daily News, for fear of seeming self-serving, has until now refrained from commenting about Island Soul, a glossy magazine produced by Galveston’s Park Board of Trustees and subsidized with public money in the form of hotel occupancy tax revenue — that stuff of so much recent controversy.
Two things have changed, and today, we object to the existence of that publicly underwritten competitor to several private publications, including our own Coast Monthly.
Park board officials initially justified getting into the magazine publishing business by arguing they needed a vehicle to reach potential tourists in distant markets. We were not happy about that, but willing to live with it.
Recently, however, the park board has been distributing the tax-subsidized Island Soul in this market in direct competition with at least three magazines forced to live or die in the hard reality of the free market.
The park board has been making its government-subsidized magazine available at local hotels, retail shops and public facilities.
Second, it was disclosed at the city council workshop Thursday that Island Soul is not just a break-even proposition for the government but is earning profits in the hundreds of thousands of dollars a year.
Park board leaders assert that’s not true. But that could be a semantic quibble about the word “profit,” because there certainly seems to be money other than hotel revenue at issue here.
Call it profit or something else; if the park board is generating large amounts of unrestricted money, there are so many problems it’s hard to pick where to start, but here will do.
Such an arrangement seems somewhat akin to money laundering used to convert highly restricted hotel tax revenue into money that’s not restricted at all.
Hotels, for example, collect occupancy tax revenue from their guests and remit that to the park board. The park board uses some of that public money to underwrite the costs for those hotels to advertise in its magazine, which it then delivers to the hotels.
The hotels get cut-rate advertising, and the park board can claim the “profit” from that advertising is not highly restricted occupancy tax revenue but just money that can be spent for anything.
Sweet deal, for a few.
The city argues the park board is generating for its own benefit $400,000 a year or more of unrestricted money through the magazine alone.
The city argues, as park board leaders have, that money generated through the investment of hotel tax money is not restricted and could be put to use for just about anything.
The questions of who should control the money and how it might be spent are interesting, but there are deeper, more fundamental questions.
For example, how could the park board justify making a profit at all on anything? It’s the government.
In fact, park board leaders recently have spent a lot of public money, and publicly funded time and effort, attempting to prove the organization is a governmental entity on some sort of par with the city.
The city should explore the control of the park board’s amassed profit, which reportedly is about $4 million, and how to spend it.
But answer these questions first.
Is the park board running for-profit operations?
If so, why is the government being allowed to use tax dollars as free investment capital to generate profit in direct competition with the private sector?
Aside from its magazine, what else is a profit-maker for the park board? In other words, what other private-sector employers and taxpayers are being forced to compete with the government?
What’s next? A government-subsidized hotel or restaurant?
This whole issue calls into question both the city’s and park board’s stewardship of their authority to impose and collect taxes.
It’s intolerable, and private-sector operators should not tolerate it.
The GCDN has catered to and treated deSchaun as some sort of celebrity for years. She is undeniably arrogant and disregards the same people that employ her. The City has clipped her wings and she is furious, now another honey pot has been discovered that she wants untouchable. She forgot long ago who she works for, citizens aren't tourists so she has little use for their opinions. Now she has turned on the private sector in the form of advertising and basically has monopoly of the tourism advertising as it relates to the hotel industry. She dares you to stop her and her bosses to make her turn over the profits of Island Soul. This Park Board is something else, time to define what they truly are and proceed forward. When's that free drone show taking place, at the Grand Opening of the East End Lagoon ?
I used to get Coast Monthly then, it just stopped coming. I live out of town so I'm a subscriber. I had been for many years and then it quit coming. No renewal notice, nothing. Sorry I changed the subject a bit.
Just another example of a tax supported pseudo-bureaucracy becoming a fiefdom. Recently the Park Board has created chaos on several fronts.
The struggle between the City and Park Board over fund control has moved to the expensive litigation arena where tax money is being wasted/paid to lawyers.
The Park Board has move into the ethnic/political arena by funding/subsidizing the specific event of Juneteenth and its museum. Surely other events (Lone Star, Spring Break, other museum, etc.) will be demanding for equity treatment.
The oversite and strict conforming to the Park Boards charter has been so lax that the Park Board aggressive CEO has inferred that laxity as permission to adopt feudal control.
All to often we see Tax money seeding activities that have an entities self serving agenda to be an unfettered fiefdom.
Michael, the park board is a political subdivision of the State, however it was never designed to go into direct competition with the private sector simply because a political subdivision has an unfair advantage to n the marketplace. It’s easy to be lured by profitability. Fair assessment on the magazine!!
Motel -hotel tax money no matter what are public funds
Pat, the park board is a component unit of the city. Council created a it, appoints its board and approves its budget. That it was created by the legislature is a myth. One they have fostered relentlessly. But everything they do is with the people’s money on the people’s property.
David, why not make the PB just another department of the city? The person who replaced Kelly would be a city executive in charge of tourism doing the same thing she is but more open.
The question we should pose is what is the purpose of a society having any governance by democratic ideology. The representation of the peoples (general public, majority) needs is what the election should produce. But when the general public has no defined majority and is so frivolous the election results is leaders that are more self-interest than a public servant. Those self-interest want more power and control thus a fiefdom is born.
PB was all about preserving the beaches for the use of "we the people." "We the people" own nothing individually therefore the beaches are PUBLIC property. The community/city/society with a beach in the boundaries of it's boarders is the custodians of that PUBLIC beach. All the legislative and legal floundering has made our beaches subject to private ventures for ownership and financial manipulations. Even defining a beach by it's boundaries and barriers is a constant struggle.
The PB - Trustees and management - needs to commit to open government. Is the PB posting all committee meetings including the Executive Committee so the public and other Trustees can attend if they so desire? Is the PB willing to allow a city internal control audit and asset review and stop fighting the city for public money under the city’s elected leadership’s control? Is the PB willing to start conducting ACFR audits which are mandated in Texas for public transparency? Is the PB willing to help resolve issues where the charter for HOT conflicts with state law?
Very interesting exposé of a revenue stream that pits government subsidized perqs to favored businesses against everyone else, who doesn't have that advantage to share.
I would join Mr. Smith in asking: what other product lines is this sausage making operation running currently?
Mr. Smith, you’ve hit the nail on the head but you have only scratched the surface. The unlawful activities are far reaching in scope and I hope more becomes clear to you and the readers sooner rather than later.
When will the Park Board members & their management be held to account for their actions.
If this was a public or private company, heads would have rolled after an embarrassing spectacle by the CEO at a recent City Council meeting where she all but flipped the bird to the members of City Council.
It is time to clean house. From the Park Board members to the CEO to the CFO. We must all demand that they purge the Board of Directors - purge the Management and let’s get people in there that know who they work for. I for one am fed up with it!
News flash - at the most recent City Council workshop, Councilwoman Marie Robb raised the issue of a “SIGNIFICANT” number of audit findings that will be coming out in the soon to be released Park Board public audit. A much larger number of issues (audit findings) versus last year and this was confirmed by the Asst. City Manager Mike Loftin. Why is the GCDN not reporting on that?
Where there is smoke there is fire and someone is burning bull chips at Park Board Plaza.
Oh - can we talk about their plan to renovate (waste money) at Park Board Plaza. When you give egotistical megalomaniacs millions of $$’s - this is what happens. Wasteful projects that DO NOT make the life on the Island for residents one bit better are running rampant! Let’s get our priorities straight!
The Parks Board is not the only government entity that competes with private businesses. The city does by placing ad signs on the trolley busses and the Seawll stops. And the Port competes with privately owned parking garages. How is this different?
Correct Lee. Be reminded that many (if not most) of our state supported health science centers compete with private physicians all the time and for a long time with state dollars.
Michael didn't quite make clear that one of those competing magazines is GCDNs own Coast Magazine.
Hi Lee, good question. All public services performed by government-the city, PB, or Port-can compete in some way with private industry and could be outsourced to private sources. If this site had formatting we could do a chart for all three public governmental entities for comparison.
I think the biggest difference people would see is how the entities are primarily funded/supported:
City – property tax, user fees, sales tax
PB – city HOT tax
Port – Port operating revenues through tariffs (user fees) and leases
—————
The Port creates parking lots- it’s own and private- by attracting the cruise business by using its own operating profit to entice the business. It’s important governmental bodies don’t produce policies for the inability of private companies to compete.
The PB doesn’t create opportunities for other magazines by using the city’s HOT. Instead it can put magazines out of business using the city’s public HOT dollars.(148)
Let’s all agree there is no objectivity in anyone unless they are not benefiting or are not directly affected. Can this newspaper honestly state its editorial judgment is not influenced by the vendors who submit paid advertisements, for example? Both public & private sectors are almost indistinguishable. Always follow the money.
Michael. You know I like being a subscriber and my wife and I love the GDN coast magazine when it comes
Having said that, let me urge you to take a closer look at the two products cause I think they appeal to two different markets. Coast seems to say. “ look at the grand style of this island! Wouldn’t you want to live here ?” While the park board says “ look at the stuff of the vacation spot, wouldn’t you want to visit here?”
I think the markets are different. Call up the park board and chat. There’s room for both and the park board needs to get stuff printed somewhere and you hit a lot of fine printing stuff. There is room for cooperation since your in two different markets I think
I don’t understand why anyone would want to discourage advertising our island. They don’t have to be all Real Estate magazines. Any publication that shows of what we have is a good thing.
I have been advertising our island for years. Each time we visit other places in Texas and the states we bring with us issues of island publications and hand them out to people that intend to visit our island.
Well, it seems like beating up the Park Board, here in Galveston, is a full-time sport for some. First lets discuss the magazine. I have looked at Island Soul and am a subscriber to Coast Monthly. They are completely different publications! Island soul reminds me of the magazines I see in most hotels around the world - it is aimed at tourists and visitors. Notice that I didnt say I subscribe to it - it doesnt even have subscribers!!! Its a place to find the hours at Rainforest cafe or where Gypsy Joint has moved.
Where Coast Monthly, to me, IS something I subscribe to. It is an ability to get a peek into the gorgeous homes on the island and see what I am missing.
Island Soul is a publication aimed at visitors and SHOULD be a place where our HOT money goes! After all, it IS the money of tourists that pay for it!
Lets all keep some perspective about publications and who they target. After all, anything that brings $, recognition and respect to our homes..isnt that good?
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(26) comments
Be careful Mike. our city council bows before the PB. The mayor cowers when Kelly walks into his office. The PB has power in Galveston.
The GCDN has catered to and treated deSchaun as some sort of celebrity for years. She is undeniably arrogant and disregards the same people that employ her. The City has clipped her wings and she is furious, now another honey pot has been discovered that she wants untouchable. She forgot long ago who she works for, citizens aren't tourists so she has little use for their opinions. Now she has turned on the private sector in the form of advertising and basically has monopoly of the tourism advertising as it relates to the hotel industry. She dares you to stop her and her bosses to make her turn over the profits of Island Soul. This Park Board is something else, time to define what they truly are and proceed forward. When's that free drone show taking place, at the Grand Opening of the East End Lagoon ?
[thumbup][thumbup][thumbup][thumbup]
First I’m hearing that MY tax dollars are being used for profit?… This should be a problem for all Galveston residents.
That they are using them to compete with local businesses using tax monies? Sounds like a legal issue
I used to get Coast Monthly then, it just stopped coming. I live out of town so I'm a subscriber. I had been for many years and then it quit coming. No renewal notice, nothing. Sorry I changed the subject a bit.
Just another example of a tax supported pseudo-bureaucracy becoming a fiefdom. Recently the Park Board has created chaos on several fronts.
The struggle between the City and Park Board over fund control has moved to the expensive litigation arena where tax money is being wasted/paid to lawyers.
The Park Board has move into the ethnic/political arena by funding/subsidizing the specific event of Juneteenth and its museum. Surely other events (Lone Star, Spring Break, other museum, etc.) will be demanding for equity treatment.
The oversite and strict conforming to the Park Boards charter has been so lax that the Park Board aggressive CEO has inferred that laxity as permission to adopt feudal control.
All to often we see Tax money seeding activities that have an entities self serving agenda to be an unfettered fiefdom.
Michael, the park board is a political subdivision of the State, however it was never designed to go into direct competition with the private sector simply because a political subdivision has an unfair advantage to n the marketplace. It’s easy to be lured by profitability. Fair assessment on the magazine!!
Motel -hotel tax money no matter what are public funds
Pat, the park board is a component unit of the city. Council created a it, appoints its board and approves its budget. That it was created by the legislature is a myth. One they have fostered relentlessly. But everything they do is with the people’s money on the people’s property.
David, why not make the PB just another department of the city? The person who replaced Kelly would be a city executive in charge of tourism doing the same thing she is but more open.
The question we should pose is what is the purpose of a society having any governance by democratic ideology. The representation of the peoples (general public, majority) needs is what the election should produce. But when the general public has no defined majority and is so frivolous the election results is leaders that are more self-interest than a public servant. Those self-interest want more power and control thus a fiefdom is born.
PB was all about preserving the beaches for the use of "we the people." "We the people" own nothing individually therefore the beaches are PUBLIC property. The community/city/society with a beach in the boundaries of it's boarders is the custodians of that PUBLIC beach. All the legislative and legal floundering has made our beaches subject to private ventures for ownership and financial manipulations. Even defining a beach by it's boundaries and barriers is a constant struggle.
The PB - Trustees and management - needs to commit to open government. Is the PB posting all committee meetings including the Executive Committee so the public and other Trustees can attend if they so desire? Is the PB willing to allow a city internal control audit and asset review and stop fighting the city for public money under the city’s elected leadership’s control? Is the PB willing to start conducting ACFR audits which are mandated in Texas for public transparency? Is the PB willing to help resolve issues where the charter for HOT conflicts with state law?
I surely hope so.
Sorry … my cut and paste didn’t finish …
I surely hope so. The issues are much bigger than just using public HOT to compete against private business for profit.
Seems like everyone is in agreement that the Park Board has overstepped its boundaries. Question is….now what?
PS. The magazines revenue last year was closer to $100k than $400k. That was not clear during council discussion. But Michael’s point stands.
Very interesting exposé of a revenue stream that pits government subsidized perqs to favored businesses against everyone else, who doesn't have that advantage to share.
I would join Mr. Smith in asking: what other product lines is this sausage making operation running currently?
Mr. Smith, you’ve hit the nail on the head but you have only scratched the surface. The unlawful activities are far reaching in scope and I hope more becomes clear to you and the readers sooner rather than later.
When will the Park Board members & their management be held to account for their actions.
If this was a public or private company, heads would have rolled after an embarrassing spectacle by the CEO at a recent City Council meeting where she all but flipped the bird to the members of City Council.
It is time to clean house. From the Park Board members to the CEO to the CFO. We must all demand that they purge the Board of Directors - purge the Management and let’s get people in there that know who they work for. I for one am fed up with it!
News flash - at the most recent City Council workshop, Councilwoman Marie Robb raised the issue of a “SIGNIFICANT” number of audit findings that will be coming out in the soon to be released Park Board public audit. A much larger number of issues (audit findings) versus last year and this was confirmed by the Asst. City Manager Mike Loftin. Why is the GCDN not reporting on that?
Where there is smoke there is fire and someone is burning bull chips at Park Board Plaza.
Oh - can we talk about their plan to renovate (waste money) at Park Board Plaza. When you give egotistical megalomaniacs millions of $$’s - this is what happens. Wasteful projects that DO NOT make the life on the Island for residents one bit better are running rampant! Let’s get our priorities straight!
The Parks Board is not the only government entity that competes with private businesses. The city does by placing ad signs on the trolley busses and the Seawll stops. And the Port competes with privately owned parking garages. How is this different?
Correct Lee. Be reminded that many (if not most) of our state supported health science centers compete with private physicians all the time and for a long time with state dollars.
Michael didn't quite make clear that one of those competing magazines is GCDNs own Coast Magazine.
Hi Lee, good question. All public services performed by government-the city, PB, or Port-can compete in some way with private industry and could be outsourced to private sources. If this site had formatting we could do a chart for all three public governmental entities for comparison.
I think the biggest difference people would see is how the entities are primarily funded/supported:
City – property tax, user fees, sales tax
PB – city HOT tax
Port – Port operating revenues through tariffs (user fees) and leases
—————
The Port creates parking lots- it’s own and private- by attracting the cruise business by using its own operating profit to entice the business. It’s important governmental bodies don’t produce policies for the inability of private companies to compete.
The PB doesn’t create opportunities for other magazines by using the city’s HOT. Instead it can put magazines out of business using the city’s public HOT dollars.(148)
There are "beach user fees"/beach parking as well - the intended source of funding for PB.
Let’s all agree there is no objectivity in anyone unless they are not benefiting or are not directly affected. Can this newspaper honestly state its editorial judgment is not influenced by the vendors who submit paid advertisements, for example? Both public & private sectors are almost indistinguishable. Always follow the money.
Michael. You know I like being a subscriber and my wife and I love the GDN coast magazine when it comes
Having said that, let me urge you to take a closer look at the two products cause I think they appeal to two different markets. Coast seems to say. “ look at the grand style of this island! Wouldn’t you want to live here ?” While the park board says “ look at the stuff of the vacation spot, wouldn’t you want to visit here?”
I think the markets are different. Call up the park board and chat. There’s room for both and the park board needs to get stuff printed somewhere and you hit a lot of fine printing stuff. There is room for cooperation since your in two different markets I think
It's a good point you make, Michael. See also the Dellanera RV Park for a similar situation.
I don’t understand why anyone would want to discourage advertising our island. They don’t have to be all Real Estate magazines. Any publication that shows of what we have is a good thing.
I have been advertising our island for years. Each time we visit other places in Texas and the states we bring with us issues of island publications and hand them out to people that intend to visit our island.
Well, it seems like beating up the Park Board, here in Galveston, is a full-time sport for some. First lets discuss the magazine. I have looked at Island Soul and am a subscriber to Coast Monthly. They are completely different publications! Island soul reminds me of the magazines I see in most hotels around the world - it is aimed at tourists and visitors. Notice that I didnt say I subscribe to it - it doesnt even have subscribers!!! Its a place to find the hours at Rainforest cafe or where Gypsy Joint has moved.
Where Coast Monthly, to me, IS something I subscribe to. It is an ability to get a peek into the gorgeous homes on the island and see what I am missing.
Island Soul is a publication aimed at visitors and SHOULD be a place where our HOT money goes! After all, it IS the money of tourists that pay for it!
Lets all keep some perspective about publications and who they target. After all, anything that brings $, recognition and respect to our homes..isnt that good?
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