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HomeMy WebLinkAboutMinutes Corpus Christi Convention & Visitor Bureau - 04/20/1993 sM aopeasigt CCACVB BOARD OF DIRECTORS MEETING MINUTES TUESDAY, APRIL 20, 1993 3:00 PM CCACVB BOARD ROOM, 2ND FLOOR 1. Call to Order The meeting was called to order at 3:03PM. II. Roll Call Chairman Jones ca/led the roll (ATTACHMENT A). Directors attending.: Al Jones (Chairman), presiding Stern Feinberg, Cathy Harrison, Lillian Murray, Shirley Pagan, Bill Pruet, E.J. Schanfarber, Berney Seal, Barbara Sheppard, and Eugene Urban. Absent: Roy Mayo, Ricardo Sanchez, and Erich Wendel. Attending Staff: Keith E. Arnold, Rob Earley, Pat Rousseau, Dana Stephens, and Dottie Sylvester. Guests: John Bell (Wood, Boykin & Wolter), Scott McGehee (ITS), Elaine Motl (E.M. Marketing), Holly Osborn (MDL), Jim Steinberg (Caller Times), and Jerry Van Beveren (Flusche, Van Beveren, Kilgore). Ill. Motion to Approve Minutes of March 76, 1993 Board of Directors Meeting Q The above minutes were moved by Lillian Murray, and seconded by Cathy Harrison W for approval. Chairman Jones submitted letters for inclusion in the above minutes related to efforts in bringing Los Barcos to Corpus Christi last year(ATTACHMENT 8). The minutes were then approved by the Board. VIV. CCACVB Financial Report Pat Rousseau, Vice President of Finance & Administration, explained the graphs and variance reports submitted by her department(ATTACHMENT C). She noted that the Corpus Christi Area Convention & Visitors Bureau 1201 N. Shoreline. P. 0. Box 2664.Corpus Christi.Texas 78403-2664 USA N�PYD (512)882-5603. 1-800-678-0CEAN, FAX: (512) 882-4256 2 variance report shows expenditures that are plus or minus 10% over or under the budget. When asked by Chairman Jones whether there were any concerns the Board needs to know of, the response was "no". Mrs. Rousseau noted that she and Mr. Arnold had met with the City yesterday regarding the CVB's budget. It was pointed out that the City would be paying the Bureau the balance of the payment due them by the end of May rather than over a three month period. The City has penalized the Bureau $28,000 for receiving overpayment last year. This overpayment occurred in the fourth quarter of the fiscal year and arose out of an estimated figure being used rather than an actual. Shirley Pagan asked when the Bureau would be receiving $73,000 from the USS Lexington. Chairman Jones responded that that should occur within 30-60 days although that was not definite. This would help the Bureau's cash flow. It was also reiterated that the CVB is guaranteed 57.62 million by the City of Corpus Christi from City occupancy taxes. A question arose regarding the usage of the Bureau van -- if it was fulfilling the purpose for which it had been obtained. The response was "yes"because it was an effective tool to utilize for negotiation with the three transportation services currently being used by the Bureau. V. Departmental Reports Keith Arnold gave a brief overview (ATTACHMENT D) noting that there had been a significant increase in visitors from Mexico for Holy Week. Two Bureau employees, Ann Neese and Elena Ramirez, will be going to Mexico for Encuentro Amigos del Turismo to build on that. He noted that he was pleased with the convention activity reports as the conversion from leads to bookings is running over 50%. Also, visitor inquires are up over 58% from last year. At this time, Mr. Arnold introduced Scott McGehee of Intelligent Technological Solutions, Inc. (ITS) to explain on the fulfillment services his company is providing for the CCACVB. Mr. McGehee began by stating that he has a background in tourism which covers over 20+ years, i.e. Aquarena Springs. Three years ago he started a fulfillment service in San Antonio. On a daily basis for San Antonio, he downloads three computer systems of visitor information requests. Additionally, he receives coupons from magazines for San Antonio as well as labels from publications. ITS handles 100% of San Antonio's envelope stuffing. ITS also handles fulfillment services for all of Mexico and Texas Monthly Magazine. They have the capability to design computer software to help individual firms, i.e. the software that the CCACVB uses in their lobby was written by them. They also have the capacity to maintain every request that the CCA CVB receives on a database and can perform surveys for the Bureau, i.e. how many requests converted to a trip, what income areas responded to advertising. He pointed out that the reason they can offer these services is because they have "the equipment and the people". Mr. Arnold interjected that ITS has offered the Bureau efficiencies in 800 costs, etc. and that they can download the input from our front desk. "They have capabilities for however big we grow. " He pointed out that, hopefully, the CCACVB will be able to buy space as a coop partner in San Antonio's mail-out packets. This would cut the cost ,M appeaeithet 3 drastically for the CVB as it would pay no postage at all and instead would pay per outgoing piece. The CVB would be looking at being able to send 25,000 pieces over a certain time for less than 15 cents per piece. When asked if the CVB would be a billing for ITS the response was that San Antonio wouldn't want to get involved in that. Instead, the CVB would send a check with any pieces it wanted sent out which would get them "out of the bookkeeping business". It was confirmed that a mailing list was currently being processed. The option of a label system would a/so exist. The question arose as to what method the CVB would pursue in getting coop partners. The response was that a mailing would be done to the hospitality industry, the Area Council and the Regional Tourism Council. Mr. Arnold stated that he had had a computer consultant come in recently to the Bureau to assess its overall automation capabilities principally focusing on software and to a lesser degree hardware. An emphasis was stressed on motorcoach tracking and upgrading the housing system. The consultant's report will be presented to the Board in June. He noted that last week he had visited with the State Division of Tourism in Austin to "put down rumors" that have been circulating lately regarding the CCACVB, i.e. it is doing away with tourism. He felt his reception had been "positive" and that we have the basis for a "good relationship with them". Also noted was that the State has a lot of data the Bureau can use, i.e. research and statistics. Mr. Arnold has been elected to the TACVB Board of Directors. VI. John Bell: Los Barcos Bylaws, CVB Bylaws, CVB Articles of Incorporation, USS Lexington Resolution Mr. Bell began by addressing the Bureau's Articles of Incorporation and Bylaws /ATTACHMENT El. As the Bureau's articles were originally set up to expire after 50 years rather than being perpetual, Mr. Bell felt that would need to be changed. Also, he thought it would be important to amend the articles to indemnify the Bureau's directors(corporate indemnification is state-of-the-art). Additionally,he recommended the purpose clause be updated to correspond with the IRS, that the registered agent be updated and that voting member status for non dues paying Chamber members be eliminated. In order to amend the articles of incorporation, he suggested having a vote taken by the Chamber members at one of their breakfast gatherings. It was asked if this matter had been brought to the Chamber's attention. The response was "no". Mr. Bell had informed the Chamber he was performing "clean-up work for the CVB". It was reiterated that "non-voting members would be best rather than ones who question Board actions". Mr. Arnold suggested spelling out limitations for members so that they would know what services they are entitled to. On a motion made by Berney Seal and seconded by Chairman Jones, the above changes to the CVB's Articles of Incorporation were approved by the Board. .M Gay> 4 Although the CVB Bylaws were addressed next, it was suggested that the Board defer on them until the Articles of Incorporation were completely taken care of. One of the proposed changes to the bylaws would consist of deleting members and establishing an associate category. Mr. Bell also pointed out that under the new bylaws, four members of the Chamber of Commerce could be added to the Board and two members from affiliated organizations, i.e. Lexington, could be included. He felt this would give the Board flexibility to have up to six additional members. He also pointed out that in the new bylaws an Executive Committee would be added which would comprise three officers of the Board and three directors at-large. A discussion arose regarding absences and forfeitures of Board membership. One of the concerns was that in raising the number of directors on the Board, a higher quorum would be needed. The response was that the Board had the option to reduce the quorum requirement, i.e. one-third, one-half. It was also pointed out that any additional directors appointed would be for one year of service only. A decision was made that the bylaws would state any director missing more than three meetings per fiscal year would forfeit membership on the Board. They would be notified after missing their second meeting -- by the fourth missed meeting they would already be gone. Bill Pruet made a move to table the above discussion on the CVB Bylaws which was accepted by the Board. Regarding the resolution for the USS Lexington (ATTACHMENT F/, Mr. Bell explained the reason why the it was being handled was to "isolate liabilities" the Bureau might have for the Museum. It was pointed out that the pier improvement contracts were created in the name of the Bureau and the Lexington Association. A question arose if the Bureau was transferring ownership back to the Lexington. The response was that the Lexington is the lessee under the lease with the City. As the Bureau guaranteed the debt service for the Lexington, the only liability it has for the City is $3 million. With the resolution and quitclaim deed, the CVB would not be named as a party in any liability cases. At this point in time, the Navy has not been cooperative with Mr. Bell in preparing a new agreement which would eliminate the Bureau's responsibility, from the Navy's perspective, for the Lexington. It was stressed that with the resolution and quitclaim deed the Bureau would be "giving up assets to avoid liabilities associated with the assets". It was clarified that the resolution would cover the approachway and the vessel itself and that the Bureau was obligated to the Navy for the vessel and not the public. When asked if he had spoken with the City Attorney regarding this matter, Mr. Bell responded that the "Lexington is the lessee. The Bureau's only obligation is the $3 million debt service". The quitclaim deed would eliminate any premises liability element. On a motion made by Mr. Pruet and seconded by Berney Seal, the Board approved the resolution and quitclaim deed. The last topic addressed by Mr. Bell was the Bylaws for Los Barcos (ATTACHMENT G). He pointed out that the Bureau would have no financial liability whatsoever for the ships and that the Articles of Incorporation and Bylaws for Los Barcos were subject to appointment and approval by the CCA CVB Board of Directors. There would be 20 people on the Board for Los Barcos. It was also stressed that the name the I GoGYv 5 association would prefer to use now for the ships is Las Carabelas rather than Los Barcos. On a motion made by Mr. Seal and seconded by Barbara Sheppard, the above articles of incorporation and bylaws were approved by the Board. VII. Flusche, Van Beveren & Kilgore (FVBK): CVB Audit Jerry Van Beveren made a presentation on the 1992 audit his firm had done for the CCACVB (ATTACHMENT H). He gave the Board a "short course in auditing"and elaborated on the following charts: Generally Accepted Accounting Principles GAAP Who determines GAAP? AICPA FASB - Industry. Generally Accepted Auditing Standards GAAS Who determines GAAS? A/CPA CPAs - Judgement. What Auditors Must Do o Issue an opinion re: GAAP o Report conditions to the Board or owners o Provide recommendations o Be your advocate. 41 .M God 6 What Auditors Don't Do o Find all errors o Find out if anyone is stealing o Tell clients what they must do. Mr. Van Beveren stated that in their audit they found no materials weaknesses in the CCACVB (material weakness being the "worst case" scenario) nor did they find anything out of the ordinary in financial statements. He addressed the management letter which had gone out with the audit and the following four points: 1) There was a delay in the completion of the CVB audit as FVBK had to finish the Lexington audit first. The Lexington audit took longer than anticipated due to lack of records and internal control problems. He suggested that the CVB select an auditor this year before the end of their fiscal year. He stressed that the auditor chosen for the Lexington should be the same auditor for the CVB because of their subsidiary arrangement. 2) Financial reporting to the Board should include a balance sheet (assets, liabilities, receivables, payables), a projection for the next 30 - 60 days and the cash needs of the CVB. He felt more information was needed by the Board. 3) More information should be readily available on third party contractors. He suggested requiring quarterly reports as part of any contracts. 4) Accounting Controls for special events, i.e. Los Barcos, are needed which would show what the actual operations are. In the case of Los Barcos, there were no records to show where problems occurred. Internal controls need to be in place for auditors to examine, i.e. to see if the handling of cash is being done well. A question arose if the Bureau has contracts with third parties. The response was that it has letters of agreement. It was suggested by Mr. Van Beveren that rather than requiring audits of third parties, the CVB has them conform to staff reports. Chairman Jones noted that "standard operating forms and procedures will be developed by the CVB". He also felt that the Board should expect to see "management's response to the management letter". He elaborated that he wanted a financial report package devised that would meet the needs of the Board. He expressed the desire that the President "work with financial people to determine what the Board needs". On a motion made by Stern Feinberg and seconded by Mrs. Sheppard, the Board approved having the President provide them with balance and financial sheets and other related documents. SM aValatigt 7 VIII. New Marketing Committee Mr. Arnold noted that the first meeting of the newly formed Marketing Committee would held on Friday, April 23rd. There will be three additional meetings held after that before the next Board meeting so that their findings can be presented to the Board in May. He listed the makeup of the committee: Lillian Murray (Chairman), Stern Feinberg, E.J. Schanfarber, Bill Morgan (Holiday Inn-Emerald Beach), Susan Taft (Tejas Management Systems, Inc.), Pat Townsend(Pacific Southwest Bank) and Ariel Garcia (Geico/Garcia Insurance Agency). IX. Elaine Mork Miss Texas Pageant/APBA Elaine Mod began by distributing a report on the 1993 Miss Texas USA Pageant ATTACHMENT I). She noted that the Bayfront Convention Center requirements have been met and that a press release had been done on the pageant February 1st. It was pointed out that a few more hotels are still needed to commit to the event. The opening number for the pageant will take place on the deck of the Lexington with the contestants doing a dance routine on the flight deck. The Lexington will also be part of the City documentary. To-date, Crystal Productions has not obtained network sponsors. When questioned about that, Ms. Motl remarked that she was surprised at that also but was told by Crystal Productions they are "holding out to find the largest sponsor". Mr. Arnold interjected that that would not impact the Bureau as the pageant will be on network television. Regarding the American Power Boat Association (APBA) race, Ms. Mot/ began by stating that she has been "unsuccessful all three years getting sponsorship for it". She gave a brief history of the race's beginning in Corpus Christi and how she became the promoter for the event. She noted that in February she had sent a letter to the people in the community regarding the APBA race. There was not a large response. At this point, she informed the APBA the race would be canceled. They told Ms. Mot/ they would bring in another marketing company to help sponsor the event. When they went to PEPSICO, they were turned down. Ms. Motl stated that she would be willing to share revenues with the Bureau or pay back money, but she was not willing to pay for the event. She also added that Texans should be focused on as an audience. Chairman Jones reminded the Board that they've committed S10,000 to the APBA races for promotional use. He asked if the Board could reallocate the $ 10,000 they've already committed, preserving $5,000 of that amount for marketing. Ms. Motl felt that radio advertising outside the community would be advisable and specified San Antonio, Austin and Houston. Mr. Feinberg, Mrs. Sheppard and Ms. Harrison expressed an interest in having the race run again this year. Ms. Harrison urged the other Board members to "get personally involved"and noted that 58 boats have committed to coming to this year's race. She felt it would be a "black-eye"if the race did not occur this year. Chairman Jones proposed "pushing it across the M 8 finish line for this year" and noted that the Board should not be in this position next year. Ms. Motl interjected that she would need to know by September if the Board was going to again support the race. A motion was made by Mr. Pruet to free up $5,000 of the $ 10,000 already committed by the Board to the race and to add to that $5,000 another $ 10,000 for marketing purposes. The total commitment by the Board for the APBA race would be $20,000. This motion was seconded by Ms. Harrison. It was elaborated that the marketing would consist of paid radio advertising, promotional giveaways and communications in newspapers and magazines. Mr. Pruet then made an amendment to his motion regarding splitting of net proceeds -- that the Board's portion be held in escrow until it was determined whether or not the Board was supporting the APBA race for next year. If it was determined not to proceed with the race next year, the money would go into the general fund. This amended motion was seconded by Shirley Pagan. The above motion and amendment was opposed by E.J. Schenfarber and approved by the remainder of the Board members present. X. Old Business No one brought forth any of the above. Xl. New Business Mrs. Pagan brought it to the Board's attention that Lou Gitlin, the new head of American Airlines in Corpus Christi, would like to be on the CVB Board of Directors. Mrs. Sheppard informed the Board that the Area Council had a nomination for Area Council membership to replace Tim McAuliffe's vacated seat. Mr. McAuliffe resigned because of job relocation to Houston. She noted that she had spoken with Bart Wells, Mayor of Refugio and an active member of the Coastal Bend Regional Tourism Council, regarding an appropriate replacement for Mr. McAuliffe. He suggested Maxine Reilly, an employee of the Museum in Refugio and head of the Refugio County Historical Society. Ms. Reilly expressed an interest to Mrs. Sheppard in becoming a member of the Area Council. Mrs. Sheppard reminded the Board that the Town of Refugio and Refugio County are both paid members of the CCACVB. Prior to the Board meeting she had polled the other Area Council members regarding Ms. Reilly's nomination and they were in agreement of it. On a motion made by Gene Urban and seconded by Ms. Murray, the Board approved Maxine Reilly's election to the Area Council. Mr. Arnold noted that approved Lexington Board minutes would be sent out in the future with CVB Board minutes. XII. Adjournment to Closed Session Pursuant to the provisions of the Open Meetings Act, the Board elected at 5:10PM to go into closed session to discuss matters properly brought before them under provisions of said act. Dottie Sylvester Recording Secretary SM Gum