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HomeMy WebLinkAboutMinutes Corpus Christi Convention & Visitor Bureau - 11/23/1993 2i> . figri 110 IS `,t1g97071/2y� r n.t`• �St § ev 'd THE ISLES OF TEXAS Iii CCACVB BOARD OF DIRECTORS MEETING . MINUTES TUESDAY, NOVEMBER 23, 1993 3:00 PM CONVENTION & VISITORS BUREAU, 2ND FLOOR BOARD ROOM 1. Call to Order The meeting was called to order at 3:01PMby Secretary-Treasurer, E.J. Schanfarber. Mr. Schanfarber led the meeting in the absence of Chairman Jones. ll. Roll Call Directors attending: E.J. Schanfarber, presiding Marco Arredondo, Rosario Chapa Carrizo, David Coggins, Ralph Ehrlich, Cathy , Harrison, Rex Kinnison, Bill Pruet, Ricardo Sanchez, Barbara Sheppard, Jean Titus and Erich Wendt. Absent: Al Jones, Lillian Murray and Gene Urban. Attending Staff: Keith E. Arnold, Mary Etta Brundidge, Ann Neese, Marilyn Pierce, Dana Stephens, and Dottie Sylvester. Guests: Fred Dotts (MDL), Holly Osborn (MDL) and Jerry Van Beveren (Flusche, Van Beveren & Kilgore). It was noted that there was a quorum of Directors present. 111. Motion to approve Minutes of October 19, 1993 Board of Directors Meeting On a motion made by Erich Wendl which was seconded by Rosario Chapa Carrizo, the above minutes were approved by the Board. SCANNED ,,,aa CORPUS CHRISTI AREA CONVENTION&VISITORS BUREAU 1201 N SHORELINE,P.O.Box 2664,CORPUS CHRISTI,TEXAS 78403.2664 USA • 512.883.5603 • L800.67S-OCEAN16232) • FAX 512-682-4256 V 2 IV. Flusche, Van Beveren & Kilgore Audit of CCACVB Mr. Jerry Van Beveren presented the audit done by his firm of the CCACVB (ATTACHMENT A). He began by defining what an audit is. An auditor reviews financial statements of an organization to see if they are in conformity with GAAS (generally accepted auditing standards). The auditor then gives an opinion on the statements as to whether they are in conformity with GAAP (generally accepted accounting principles). FVBK's audit of the CCACVB's last fiscal year resulted in a "qualified opinion letter". It was qualified because of the Lexington not because of the CCACVB. Contributory factors for the qualification were documentation problems in the ship's early start-up as well as a lack of controls. Mr. Van Beveren pointed out that the qualification was the lowest type they could give. As a result of the audit some adjustments have been made to the financial statement. It was also noted that the opinion was delayed again this year because of the Lexington. In the management letter (ATTACHMENT B) FVBK made four recommendations for improvement: 7. Funds for Los Barcos should be set aside in a separate bank account. (NOTE: approved by Board this date). 2. As there has been a turnover in Accounting staff at the Bureau, the Board should make sure the internal controls continue as best they can. 3. The relationship between the CCACVB and the Lexington as well as the CCACVB and the Las Carabelas needs to be defined. FVBK was of the opinion you have ownership of an entity if you exercise control over that entity. 4. The pension plan for the Lexington needs to be identical with the CCACVB. It would also need to be legally reviewed to make sure there are no technical violations. (NOTE: The CCACVB's attorney, John Bell, has already handled this matter and it has been communicated to the Lexington.) It was noted that new controls have been established for the Lexington by Peat Marwick and that they have improved significantly since June. A question arose about the handling of money at the Lexington. The response was that as "cash doesn't have a lot of tracks"a dual control is needed to avoid theft. It was pointed out that a division of responsibility between handling money and recording or tracking it has been improved upon. Procedures now in place give an accountability of 99.9%. Another question arose regarding spending controls. The response was that that is locked in place by the budget. Mr. Arnold added that he now has signature power on Lexington checks. It was also pointed out that the Executive Committee of the Lexington keeps a close watch on the budget. 3 It was asked why the services of two firms were being used. The response was that Peat Marwick was not acting in an auditing capacity but rather in a bookkeeping role. FVBKis the auditor. It was also stated that an auditor cannot audit their own work. It was explained that the outsourced cash management effort with the Texas State Aquarium has been assumed by Peat Marwick. Mr. Arnold was asked to expound on the ownership issue of the Lexington. He explained that the issue stems from two different viewpoints -- accounting vs. legal professionals. The CCACVB has filed a quitclaim deed on the Lexington so that the ship wouldn't be perceived as a subsidiary of the CCACVB. It was on request by the City that the Bureau became responsible for approval of Board members for the Las Carabelas. Other than that request, the CVB is only assisting the Las Carabelas with their marketing efforts. There is no ownership by the Bureau in either case. The CVB did not/ease the Las Carabelas. It did make a financial obligation to the Lexington by guaranteeing its debt. "The relationship managerially to the Lexington is still unclear. " Barbara Sheppard pointed out that Mr. Arnold is mentioned as a guest in the Lexington minutes although the four representatives from the Bureau to the Lexington Board of Directors were designated in the past as Mr. Arnold, Rob Earley, Al Jones and Bill Pruet. Mr. Arnold noted that "this won't be resolved today" adding that "we have input but we don't have oversight". At this point Mr. Arnold asked CVB Financial Administrator, Mary Etta Brundidge, to inform the Board of financial changes which have taken effect recently. She noted that department heads are now signing all P.O.s and that the petty cash fund is now handled by another department outside of Accounting. She added that she is in the process of setting up a numerical accounts receivable file. A check log for every check showing where the money has gone has a/so been set-up. Ms. Brundidge ended by stating that "all accruals are in this month". On a suggestion by Mr. Arnold, a motion was made by Barbara Sheppard to separate out the residual $25,000 funds for the Los Barcos and place the money in its own account. The motion was seconded by Mr. Pruet and moved by the Board. At this point in time, Mr. Arnold invited the Board to walk downstairs with him to the Bureau's lobby area to better understand what reconstruction would be needed in order for the Bureau to be able to take fulfillment service inhouse. It costs the Bureau 40 cents for their current fulfillment service to handle an telephone inquiry and 15 cents for each packet the fulfillment service performs. In addition, the Bureau also pays for postage, envelopes and telephone costs incurred by the fulfillment service. The Bureau wants to take fulfillment inhouse in order to facilitate information getting out faster. They have also received a lot of local requests for access to the CVB's data base of inquiries. The Sparklers have offered to handle the fulfillment Even with two new data personnel the savings to the Bureau would be $700/month. In order to take fulfillment inhouse a new phone system and reconstruction of the Information Services Center in the lobby of the CCACVB would need to be obtained. V 4 Reconstruction would involve providing additional workspace for people to work in. An island would be added for more work surface, the receptionist would work next to the Visitor Information personnel instead of being isolated on the other side of the lobby, carpeting would be installed to deaden sound, etc. Appointments would be routed through the back door of the building while visitors would be encouraged to use the front entrance. Mailing functions would be performed behind the wall while data would be input on terminals alongside the wall in open view. With a new voicemail system, people could input inquiries from taped messages. It was pointed out that during work hours a live operator would always be available from voicemail. Visitors calling in would also be able to hit a button to request written materials. Total cost for the new phone system and construction would be $35,000 which would be paid for over a 38 month period. The overall intent of the reconstruction is to maximize the available space in the building (beyond relocation to another site). ($25,000 telephone, $10,000 construction) It was asked what would happen to the space should the consolidation become a reality. The response was "unless we move from this building -- nothing". There would still be a need for the Visitor Information Center whether or not the consolidation took place. It was pointed out that even if there was a move it wouldn't occur for at least another 18 months. It was stressed that the phone system can be easily adapted for consolidation and that potentially the Bureau could get some of their initial investment back from the other entities. Remote access will also be available on the new phone system. The question arose if the money for the phone system and reconstruction was in the revised operating budget. The response was yes -- additionally there is $ 70,000 in receivables for transportation subsidies which can be recovered from the hotels still delinquent. The $10,000 was discovered as a result of the Bureau updating its accounts receivable. The Solomon accounts receivable package was not being used but is being implemented by the new Financial Administrator. V. CCACVB Financial Report Mr. Arnold informed the Board that they had a revised budget (October/November) placed in their binders (ATTACHMENT C) in front of the original budget. The budget was revised as the Bureau is now on an accrual basis. He thanked Marilyn Pierce and Mary Etta Brundidge for their diligent work on the revised budget. He then went over in detail the revisions which were made (ATTACHMENT D). It was noted that Salary now had a total of $530,820. Had the Bureau continued with the same number of employees it had a year ago with the recommended 4% merit increase the salary line would have been $659,000. Added with savings of benefits the Bureau is realizing $130,000 in savings on personnel. Under 6020 (Subcontractors) it was noted that Diana Otton is the Bureau's computer consultant taking the place of a former Bureau accounting person who functioned in that capacity part-time. As she is an independent contractor she will receive no additional benefits. Peat Marwick costs were incurred by the Bureau for interim bookkeeping help prior to Ms. Brundidge's employment. Under 6540 (Board of Directors) expenses are now budgeted. 5 It was noted that under 6550 (Dues & Subscriptions) $6,000 had been cut from last year's original budget. 6560 (Travel & Expense) is used for sales trips. It is used strictly for sales calls and association type travel. 7020 (Utilities/Building Maintenance) includes external site costs as the Bureau has two Visitor Information Centers other than its Shoreline location. It was pointed out that 7040 (Local Event Hosting) is the hardest line item over which to gain control, because of commitments made for the future several years ago. It usually relates to transportation. The Bureau is asking hotels to levy an additional fee per night to offset this cost. It also plans on finding partners to help pay for this line item. It was explained that the Bureau doesn't offer things to convention groups for free -- it views their history and sees what things they've been offered in the past. Then it negotiates. Some groups have bid specifications, i.e. the CCACVB hosting a welcome dinner and reception. The CCACVB also looks at a group's spending patterns and the size of their group. 7140-03 (Trade Shows - Tourism) has been cut $25,000 over the last two years. Under 7150-00 (Education/Staff Development) $3,000 will be utilized for 10 CVB employees to learn Business Spanish over a 12 week period. 7180-00 (Promo/CINET/TNET) helps the Bureau find leads and track convention business. Regarding 7230 (Sparklers), it was noted that the Sparklers have given the Bureau over 30,000 comp hours of manpower. 7310 (Print Advertising) should read $364,000 rather than $364. It was noted that the Los Barcos fund is shown on the balance sheet. It was pointed out that it is standard practice to have 22% of an association budget allotted for contingency. In the past the Bureau has not allocated money for this. Through reorganization and new found dollars a marketing contingency account has been set up. To-date there is $75,745 in the contingency account. On a motion made by Mr. Pruet which was seconded by Rex Kinnison, the Board approved the submitted revised budget. Mr. Schanfarber thanked Mr. Arnold, Marilyn Pierce and Ms. Brundidge for their work on the revised budget. VI. Departmental Reports Mr. Arnold brought the Quarterly Report to the Board's attention which had been mailed to them prior to today's meeting and placed in their notebooks. He noted that it would be sent to the City Council, hotels, attractions and Restaurant Association as well. He felt that the Convention Department was "off to a good start for FY room nights"adding that the staff is aggressive. The Board will regularly receive reports of trade shows attended by the Bureau. Their goal is to have a return on investment which they can then show the Board. JJ I B It was noted that the Bureau provides a housing service for conventions. Elena Ramirez, Housing Manager, spends approximately 70% of her time placing reservations for them. At this point Marilyn Pierce gave a monthly report for the departments under her (ATTACHMENT El. She began by stating it was definitely a highlight for the Bureau to make the front business page of a San Antonio newspaper as a result of their San Antonio sales blitz. She noted that Lou Garcia's trip to Monterrey strengthened our relationship with that city. New maps have been purchased which will be framed and placed in all of the three Visitor Information Centers. Mr. Arnold interjected that a new research project has been started by the Visitor Information Centers to find out who are visitors are (ATTACHMENT Fl. Ms. Pierce noted at the recent Sparkler meeting held at the Best Western-Corpus Christi Inn it was stated by the Sparklers that Corpus Christi is picking up approximately 10 German visitors a week. A question was asked if conventions booked by Sandi McNorton for the Lexington were reflected in the Convention Department's room night figures. The response was that the Bureau has supplied leads to Ms. McNorton rather than the reverse. Mr. Arnold noted that he and Dave Coggins have been attending Tuesday morning signage meetings. In his estimation the Task Force has moved a long way. A concept for a Seaside Trail is in the process of being formed which will use a loop incorporating Corpus Christi, Mustang Island and Padre Island. Other communities will be able to add on to the trail as well. It was felt that the trail will be a new way to package Corpus Christi. A brochure will be put together on the trail as well. In addition, mention was made of a cassette to be produced with which people could ride the trail. It was noted that 80% of the City's visitors arrive via driving. Mr. Coggins added that he felt the City has given the Signage Task Force "good support". Mr. Arnold met with Dan Pedro tti this past week who is interested in tying the airlines into a package process. Up till now the airlines have not expressed an interest in doing this. The CVB felt it would be best to better understand what the needs of the airlines are before pursuing such a process. Mrs. Sheppard thanked Mr. Arnold and the CVB staff for helping the Area Council with its recent media event onboard the Lexington. She added that the Area Council plans on doing another such event using another attraction as a base. Vll. Old Business No old business was brought forth. 7 VIII. New Business Mr. Schanfarber noted that the Interim Board of Directors for the Alliance had met earlier this morning. Organization, Finance and Legal Task Forces were setup by the Interim Board. Mr. Schanfarber encouraged the CCACVB Board to attend meetings of the Interim Board as they are open meetings. CCACVB Board members will receive minutes of the Interim Board meetings as well. Dottie Sylvester will notify the CCACVB Board concerning Interim Board meeting dates. Mr. Arnold felt there was a "spirit of openness" in the Interim Board meeting held earlier this morning. The consensus is that the Interim Board will not "make a move" until all Boards agree. On a motion made by Mr. Pruet which was seconded by Mrs. Sheppard, the CCACVB Board approved skipping a formal Board meeting for the month of December. Mr. Arnold added that the Board would be invited to an informal gathering. IX. Adjournment The meeting was adjourned at 4:25PM. Dottie Sylvester Recording Secretary