The Biggest Users: Here’s Who Spent the Most Discounted Nights at County-Owned Hotel

The Dana Point Marina Inn, the county-owned hotel where an employee discount program was abused. (Photo credit: Expedia)

The Dana Point Marina Inn, the county-owned hotel where an employee discount program was abused. (Photo credit: Expedia)

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Former Dana Point Police Chief Lynn Koehmstedt was the most prolific user of a room rate discount at the county-owned Dana Point Marina Inn, staying at the hotel at a reduced rate for 159 nights, according to hotel records from the Orange County Auditor-Controller’s office.

Koehmstedt, a county Sheriff’s Department official who headed the department per the city’s contract with the county, stayed in a suite between February and September 2013, including one stay that lasted 147 days.

Koehmstedt and other county employees who utilized the discount are now the subject of an internal investigation by the county “to determine the scope of unauthorized activity,” following an audit released by Auditor-Controller Eric Woolery earlier this month.

Lt. Lynn M. Koehmstedt, former chief of police services in Dana Point, is now part of the department's homeland security division. Photo courtesy of Sheriff's Department website.

Lt. Lynn M. Koehmstedt, former chief of police services in Dana Point, is now part of the department’s homeland security division. Photo courtesy of Sheriff’s Department website.

The audit found 988 discounted nights were granted between 2009 and 2014 as part of a “friends and family” discount at the Marina Inn, a discount which was never approved by the Board of Supervisors or vetted by the county counsel’s office.

It also raised questions about whether use of the discount should be considered a gift, and if it is a conflict of interest for employees who have oversight over the contract and performance of the Marina Inn’s private operator, Great Western Hotel Corporation.

Paul Lawrence, the former operations manager at Dana Point Harbor who left in 2014 for a job with the city of Oceanside, signed off on many of the hotel discounts. He used the discount for 75 nights for dozens of people during 2013 and 2014, including himself, his wife, mother-in-law and daughter, according to records provided by the Auditor-Controller’s office.

Brad Gross, the former Harbor director who resigned a day after the audit was made public, also utilized the discount for 13 nights.

Discounted rooms could go for $35 to $50 a night, compared to an average rate of $102 a night, according to the audit.

Koehmstedt, a lieutenant in the Sheriff’s Department, stepped down as the Dana Point contract police chief in 2014 to take a position in the department’s homeland security division.

When contacted for comment, Sheriff’s Department spokesman Lt. Mark Stichter said Koehmstedt is prohibited from commenting on the issue and the ongoing internal investigation due to provisions within the state Police Officer’s Bill of Rights.

Lawrence and Gross also did not return calls for comment.

Hotel discounts are commonly used in the hotel industry to fill rooms during off-peak seasons. The audit also noted that the discount could be used to reduce costs for the county, such as to house contractors working in Dana Point, who would bill their lodging costs to the county anyway.

But according to the audit, the discount was not a formal program and few records were kept by hotel management to document how discounts were approved and why. Records collected and compiled by the Auditor-Controller’s office show who stayed in the hotel, how many nights they stayed, the relationship that allowed them to use the discount and who approved the discount. However, some of that information is missing in several instances.

(View an excel spreadsheet of county employees, businesses and hotel employees who used the discount).

Seven other county employees used the discount for a total of 53 nights.

Discounts were also approved for county contractors, lessees and operators at Dana Point Harbor, including:

  • Harbor contractor Jack McCormick
  • Tim Flanagan of Doheny Plumbing
  • Kevin DeGanci, owner of Brig Restaurant
  • Dana Wharf Sportfishing
  • Pacific Asian Enterprises
  • Steve Zdrakas, owner of Proud Mary restaurant
  • Jack Balson, cousin of the owner of Woody Hut retail store
  • Gemmel’s Restaurant
  • Ocean Institute

Dana Point Assistant City Manager Mike Killebrew is listed in documents as utilizing the discount for 17 nights, for himself and for two other individuals in 2013.

City Manager Doug Chotkevys said he was notified by the county of the audit’s preliminary findings, including Killebrew’s use of the discount, and immediately conducted an investigation.

“After we completed our investigation and interviewed Mr. Killebrew, we found that Mr. Killebrew did NOTHING wrong and in no way benefited from a ‘friends and family’ discount program,” Chotkevys wrote in an email.

According to Chotkevy, the rooms were rented at a government rate for a city-sponsored event for the principals and an actor of a theater production company, New Vision Theatre Company.

“I view it as entirely appropriate to seek the lowest price available when expending city funds for city-sponsored events,” Chotkevy said.“I also have to question the reason why such a material finding, of this nature, was not included in the final audit report by the county auditor-controller and why we are even discussing this matter.”

As for Koehmstedt, Chotkevy said he was a county employee and he did not have knowledge of Koehmstedt’s extended stay at the Marina Inn.

Meanwhile, Supervisor Todd Spitzer is taking a hard line on the audit and disagrees with Chotkevy and others who suggest the audit went too far.

“This is not an intergovernmental discount. This is an informal, off-the-books discount. It’s not a program, it’s not recognized or sanctioned,” said Spitzer. “Someone cooked up a reduced rate and extended it to their friends and people they had relationships with – all inappropriate.”

Spitzer believes use of the discount by public employees should have been subject to state and county regulations for accepting gifts, and said those who may have violated those limits should be prosecuted by the district attorney.

“The fact of the matter is they got something they weren’t entitled to, and the general public is not entitled to, so therefore that is a gift,” said Spitzer. “Anything above and beyond – what any general member of the public is not entitled to – should be reported on form 700s.”

The county’s gift ban ordinance prohibits businesses that contract with the county from giving gifts to public officials and to county employees, particularly those who might have influence over any government decisions related to that business. It also prohibits employees from accepting such gifts.

Violating those restrictions is considered a misdemeanor, and employees or appointed officials who violate the gift ban could be prosecuted, fired or removed from office.

State law also prohibits certain public employees from accepting more than $460 in gifts from a single source in a calendar year. Gifts must be reported by officials on their annual statement of economic interests, or form 700.

Gross, Koehmstedt and Lawrence did not reported any gifts on their economic disclosure forms.

Through its spokeswoman Jean Pasco, the county issued a short statement stating that “neither the [supervisors] nor county CEO ever authorized any type of discount or gift program” and employees are expected to follow the rules for accepting and reporting gifts outlined in a county ordinance and by the state.

“The County is confident that ongoing personnel and other administrative investigations will determine the scope of the unauthorized activity and restore the integrity of harbor operations,” Pasco wrote in an email.

Contact Thy Vo at tvo@voiceofoc.org or follow her on Twitter @thyanhvo.

  • Paul Lucas

    Will POBOR protect the DP police chief from prosecution or restitution?

    • LFOldTimer

      How many times do we have to see a replay of that movie to figure out how it ends?

    • Ltpar

      No, it merely assures that he gets the same Constitutional rights that a criminal gets.

      • Paul Lucas

        Dude how you can you even remotely suggest that POBPR is equivalent to what average citizens have. pathetic.

  • Jim MacNee

    The off the book discounts are certainly an issue… but can someone please explain to me why the county owns a hotel in the first place?

  • OCservant_Leader

    Ah ha! It appears this scam bubbled up at the City of Dana Point- and the County family “bosses” could no longer exert the “OC Code of Silence” so they went into damage control – included it in the County Audit and worked out a BOS spin.

    This scam shows how they run the scams – which includes several County Agencies, City, Contractors and even Community Groups all under the watchful eye of the Board of Supervisors.

    This is why they deploy their EA Fraternity – many levels deep in each Agency – so they have no surprises and if there is a scam – they want to leverage it.

    What will happen to those who committed and covered up the theft? Nothing. That’s how you know it’s a another cover up.

    The BOS can’t control ALL HR hiring in the County and then claim not to know what their operatives are doing.

    • Kathleen Tahilramani

      Don’t you enjoy the fiction spin that the BOS were caught flatfooted…had no idea ……HA!

      • OCservant_Leader

        It takes an incredible liar to pull that off.

  • Kathleen Tahilramani

    Nice little list of cheapskates. Highly doubtful that there will be any consequences for anyone.Maybe they could start by paying back the county the difference between what they paid and the market rate for the gen pop. Oh and revise those pesky form 700’s…..waiting…..

    • Judy Allen

      “Paying back the county”? WHAT…. how about paying us back, the taxpayers whose hard earned money is expected to benefit them and their Orange County neighbors.

      • Kathleen Tahilramani

        I think we are saying the same thing…..since the County of Orange owns this dumb hotel
        ( how is that a core County business? but I digress) then these cheap ‘o’s should pay back the county…which by default and in theory returns the $ to the county to spend (waste) again on behalf of the taxpayers. I agree 100% why do these select few get this benefit? Totally greedy.

        • Judy Allen

          I agree Kathleen. I’m involved, at a distance, with the animal advocate “shelter” bunch. SO much money spent in HIGH payments to a “behaviorist” who works “a few hours a week” and others who do nothing for these innocent souls who cannot speak for themselves. AGAIN…. our tax dollars flow out and even the many rescues that want to help are not treated well. It disgusts me every day. Many areas are now “No Kill”…. The OC people take the easy way out and KILL, KILL, KILL, ON MY TAX DOLLARS. Sorry, I’m off the topic but I’m sick of these people who take advantage of us in SO many ways!