Newport Beach approves $6.7-million budget for tourism marketing

The Newport Beach City Council late last month reviewed the $6.7-million budget allotted to a marketing agency for the upcoming fiscal year and gave its unanimous approval, albeit with some reservations over the agency’s top executive’s compensation.

Through an agreement with the city, nonprofit marketing agency Newport Beach & Co., which operates Visit Newport Beach, receives about 18% of all transient occupancy taxes collected in a given year for operation purposes. The levy, typically referred to as the hotel tax is paid on any hotel stay of under 30 days. It is one of the primary contributors to the city’s general operating budget and covers the entirety of Newport Beach & Co.’s budget.

Newport Beach & Co. projects the amount collected in 2024 will be around $6.7 million — lower than the city’s estimate of $7 million by about 4.7%.

The largest portion of the agency’s budget in the coming year, $3 million, will be spent on advertising, followed by an estimated $935,000 for public relations and communications. A not insignificant portion — $199,000 — will be spent on community relations, such as work done boosting other local events like the Hoag Classic at the Newport Beach Country Club.

According to documents filed with the IRS and published by ProPublica about Newport Beach and Co., the nonprofit reported chief executive officer and president Gary Sherwin’s compensation as $329,134 in the 2021-22 fiscal year. Sherwin also received $28,841 in retirement and other deferred compensation and $40,565 in nontaxable benefits, for a combined total of $398,540 in overall compensation for the year.

Mayor Pro Tem Will O’Neill, who is also chair of the city’s finance committee, raised concerns about Sherwin’s compensation, as well as that of the marketing agency’s other officials.

“Because all of the money going to [Sherwin] is taxpayer money and it flows through the city, it’s important for us to have really solid transparency when it comes to the money, and as this has grown significantly from even the time I got onto City Council until now — we’re looking at almost $7 million going to the organization and then we’re anticipating more than $7 million going next year,” said O’Neill.

“That pot of money is substantially bigger and, so, all the more reason for us to have better eyes on how the money’s being spent,” he said.

According to the same ProPublica data, chief marketing officer Doug McClain earned a total of $203,913 in pay and benefits in 2021-22, while vice president of finance Lily Pearson received $173,781 in compensation and benefits.

O’Neill noted that up until the recent discussion on the item, he’d never seen the compensation given to the nonprofit’s top brass, Sherwin specifically.

“That is literally more money than every employee in the city of Newport Beach [is paid],” O’Neill said, adding that it was a discussion that needed to be had when contract negotiations occur in the upcoming year. He said his comments were not a criticism of Sherwin, nor his work, but the compensation package is still substantial for a nonprofit funded by taxpayer dollars. O’Neill said he felt compensation totals should be included in the budget documents to inform the council as an oversight body.