For approximately seven months, Morro Bay has been making monthly payments to the Morro Bay Chamber of Commerce as part of a contract that long since expired for services the chamber can no longer provide in full.
So far this fiscal year, the city has paid the chamber $34,081 of the $58,425 annual allotment under the original 2012 contract with the city to provide economic development services in exchange for a lease on a former fire station modular building on Harbor Street. That contract, however, expired last June—unbeknownst to city officials. Chamber officials had falsely assumed the contract payments were included as an automatically renewed line item in the budget.
Though the chamber has continued to receive payments, it’s unable to fully meet the intended scope of work, Chamber of Commerce President-elect John Hedding told the city on Feb. 25. Recent shuffles within the chamber’s organization—including the resignation of former CEO Craig Schmidt and the elimination of business liaison Hank Roth—have made it difficult for the chamber to fully meet the terms of the existing contact. Hedding noted that the chamber has met its reporting deadlines and kept the city up to date on progress regarding economic development, but admitted, “The existing scope of work, given the changes in the chamber, obviously cannot be met.”
City councilmembers were divided on how to handle the situation, though none opted to entirely terminate the contract, which was a viable option, according to city staffers.
Councilwoman Nancy Johnson and Councilman George Leage floated a motion to continue paying the full amount, which failed to receive majority support.
“You may not be doing everything in that contract, but I certainly think you’re doing a very good job with what’s happening,” Johnson said of the chamber.
Instead, a majority of the City Council asked the chamber to come back in 30 days with a revised estimate and invoice to determine what services it actually can provide, and how much those services are worth. The full contract will be revisited during the city’s normal budget process in June.