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April 19, 2012 Door County Tourism Zone Executive Committee Minutes

DOOR COUNTY TOURISM ZONE
EXECUTIVE COMMITTEE
Minutes of April 19, 2012, 9:00 a.m.
Kerber Rose & Associates, 10568 Country Walk Lane, Sister Bay 54234

ACTION ITEMS:
Nelson moved and Larson seconded to approve the agenda. All ayes.

Skare moved and Holtz seconded to approve the March 15, 2012 minutes as corrected. All ayes.

Nelson moved and Larson seconded to approve the financials and checks to be paid. All ayes.

Larson moved and Skare seconded to adjourn. All ayes.

Committee Members Present by Roll Call: Robert Kufrin, Jeff Larson, Bryan Nelson, Dick Skare, Dave Holtz

Excused: Bob Starr and Bill Weddig

Also in Attendance: Dianne Lensert/ Kerber Rose, Josh Van Lieshout/ Administrator Village of Egg Harbor and Kim Roberts/Administrative Assistant

Call to Orders
Chair Bob Kufrin called the meeting to order at 9:00 a.m.

Approval of the Agendas
Nelson moved and Larson seconded to approve the agenda. All ayes.

Approval of the March 15, 2012 minutes
Nelson added the following corrections: In the minutes of March 15, 2012 meeting: page 2, line 2 remove they word “it” to read “it has been pulled off the table”. On page 4, line 9 correct the name “Lumley” to “Lump”. Skare moved and Holtz seconded to approve the March 15, 2012 minutes as amended. All ayes.

Report from Kim Roberts
Roberts introduced herself to the committee and then proceeded to report that thirty five (35) “no report” letters went out in February for the reporting month of January. Roberts stated that the total outstanding money due is $31,206.30 of which $25,377.74is tax itself, including properties involved in enforcement actions. For February four (4) new properties were permitted and four (4) properties were removed. Roberts informed the committee of her webinar that was completed with LexisNexis. She gave the committee an example of a property posted on Homeway.com that she wasn’t able to ascertain if the property was permitted with the email that was provided in the listing. With the LexisNexis service she was able to enter the email and be provided with a mailing address, phone number, and cell phone carrier name. With that information she was able to look up property records to discover the property wasn’t permitted. She then was able to send a permit packet to the property owner to attempt to bring the property into compliance. Kufrin suggested approval for the two week trial in addition to a two month subscription. Roberts will report her findings at the end of the two months. Larson moved and Nelson seconded the motion. Roberts also reported that the Zone now has an external hard drive that has been linked to the SyncBackSE program for daily and weekly backups.

Approval of Letter of Authorization for Administrative Assistant and Authorization Letter to Remove Former Administrative Assistant for the ACH Filter Access.
Nelson feels that it is still necessary to maintain the ACH filter access and Positive Pay Portal as a safe guard to protect the municipalities’ money. By continuing with these safe guards, Nelson feels we are minimizing risk. Kufrin moved and Larson seconded to approve the letters of authorization for the ACH filter access. All ayes.

Report by the Door County Visitor Bureau on Marketing Efforts and Quarterly Report
The DCVB Executive Summary was handed out. Kufrin noted that the trend as we get closer to summer, people look to the web to see what is going on. Kufrin had a concern on page 4 of 6 of the report. He pointed out that the advertising gross impressions for March of 2012 (7,058 impressions) seemed significantly lower, year over year. Many questioned if the reported number could be a typo or maybe there was a good reason? Nelson had hoped that someone from the DCVB would be here to explain. Kufrin noted that he would contact Jon Jarosh at the DCVB to inquire if that was all the advertising that was placed for the month of March. Moreover, Kufrin wanted to know if the 7,058 gross impressions resulted from a change in planning and/or placement. Larson said he didn’t know how the impressions could be that low with the money, a typical advertisement usually yields 20,000 impressions. Larson found that it was hard to believe that was all the advertising the DCVB did. The DCVB Executive Summary report also reflected the growing trend of Facebook; Facebook was the top referring site for the month of March. Kufrin pointed out and was encouraged that Facebook was the top referring site, the number of people “talking about this” totaling 617 seemed relatively low compared to other local businesses Facebook pages. Kufrin agreed and mentioned that it is very difficult to measure how Facebook traffic translates into dollars.
Kufrin suggested that Jon Jarosh email the DCVB Executive Summary report to the Executive Committee members as well as the Administrative Assistant. The DCVB generally emails the report the day before the meeting when the Administrative Assistant does not have office hours. The committee would like the opportunity to review and therefore better discuss the report’s findings. Kufrin agreed to include this request in his email to Jon Jarosh. Nelson also pointed out that the DCVB formerly had attended the Executive Committee Meetings. Kufrin will include this in his email to Jon Jarosh. Skare suggested even a phone call during the meeting would suffice during the Executive Committee Meetings. Nelson suggested a 9:30 call during the Executive Committee meetings from the DCVB to go over the DCVB Executive Summary.

Discussion on Current Comparable Occupancy numbers for 2012
In review of the occupancy/ collection numbers for February 2012, Kufrin noted that he wondered why innkeepers were open during such a tough time of year. Lensert pointed out that February 2012 was up 4.1% and January 2012 as down 3.8%. Nelson remarked that he is hearing that reservations are reflecting a good start to the year and that many innkeepers are very optimistic for the 2012 season, advance bookings are way ahead. Van Lieshout commented that he is hearing the same. Larson noted that he sees group bookings up for the 2012 season. Kufrin asked Roberts to send out letters to the non-participating members of the Zone, giving them the option to appoint a representative to the Commission. Kufrin moved to approve financial reports; Nelson seconded. All ayes.

Compliance Update from Bill Vande Castle
Attorney Vande Castle updated the Committee regarding the LeClair court case. He reviewed the progress: A supplemental exam was scheduled on March 7, 2012 in which LeClair failed to appear. At the most recent hearing, on April 13, 2012, LeClair was found in contempt of court for failure to appear. The judge ordered LeClair to provide financial records which has since been received. The supplemental exam has been rescheduled for April 30th, 2012 at 9 AM. Roberts will attend to take notes and record the exam.

Vande Castle has discovered in reviewing the subpoenaed records (it was noted that hard copies were sent to Roberts at the DCTZ for review) that Mr. LeClair is no longer employed. His wife works for the Gibraltar School District and has a book keeping business. Her annual salary with the school district is $35,000 with an additional $15-18,000 of income from the book keeping business. However, Vande Castle pointed out that the LeClair’s tax returns don’t match up with the income proof that they have supplied. No 2011 taxes were supplied to Vande Castle (2008, 2009, 2010 are in hand). If LeClair fails to show for the April 30th supplemental exam, he will go to jail. Vande Castle reported that the Judge wasn’t happy with LeClair and when he asked LeClair why he failed to show for the last court date he said that his wife forgot to tell him that she was served by the sheriff. Vande Castle pointed out that we have the documents before the supplemental exam, which works to our advantage as we have time to examine the documents.

Kufrin asked Vande Castle for a recommendation on whether or not the Commission needed/should have a representative at the supplemental exam on April 30th. Vande Castle’s opinion was that it might be helpful for the Administrative Assistant to attend to record the exam and take notes to report back to the Commission. Vande Castle noted that he will be focusing on the income of LeClair’s wife and the possibility of garnishing wages through the Gibraltar School District. On the other hand, Mr. LeClair was running a construction business that closed its doors in December 2011 or January 2012. Vande Castle couldn’t imagine that Mr. LeClair would cease working; therefore there will be significant probing into his future plans for employment/income. Vande Castle reminded the Commission that the process is moving forward; there is a lien on the LeClair home (although it mentioned that there were outstanding property tax issues that have since been resolved, but there are still state payroll and income tax issues at hand). On a positive note, there is no third party or municipal judgment at hand, which would prevent collection. The lien continues to earn interest and barring bankruptcy the Commission will recover the tax owed via wage garnishment or other avenues, which would be the next step to consider. Nelson stated he was glad LeClair finally showed up and the process was moving forward.

Report from Commissioners on Feedback from Local Boards on Recent Issues
Van Lieshout began a discussion on the varying views of the DCVB and the relationship that the DCTZ plays; he had a conversation with Mr. Dixon who felt that the DCTZ needs to hold the DCVB responsible for the marketing dollars. He noted that there are differing opinions regarding what role the DCTZ should play in holding the DCVB accountable. Mr. Dixon felt that the DCVB needs to be held accountable. Van Lieshout said that for the Egg Harbor board a reduction of room tax of 4% isn’t a scary number, but Credit Card fees are a little rich to be reimbursed for. Skare spoke about the analysis of Assembly Committee of Tourism proposed legislation.
Skare notes that the Gibraltar board was not sure how they would deal with a 4% reduction in income if the legislation passed, which isn’t uncommon with some of the municipalities. Kufrin mentioned that Sturgeon Bay was the first municipality to have a room tax before joining the DCTZ. They had difficulty with collections and compliance. Kufrin was called by Gary Bies after the failure of the bill, who told Kufrin that the administrators “needed to get whipped into shape”. Kufrin is attending the State Association of Administrators summer meeting, June 14, 2012, in the Wisconsin Dells. Kufrin has offered to conduct a program with assistance from Pugal and Bies. He would like to find someone else to join the discussion about the law and what room tax is used for because everyone is doing it their own way. Kufrin summed up the conference as, “volunteering to create a discussion about room tax and by doing so let the State Association make their case about what they want to do.” Nelson agreed and thanked Kufrin for doing the conference. Kufrin suggested that Fred Anderson and/or Greg Stillman would be good additions to the forum to add perspective from the innkeepers standpoint. All agreed that if DCTZ didn’t collect the tax and municipalities did, the outcome would be disastrous.

Discussion on “Mail Check” Option for Room Tax Submission.
With the online option of filing room tax there is the option to file the room tax report and “mail in” the room tax payment separately Lensert explained that permit holders tend to forget to send the checks or send duplicates. She also noted that reconciliation is a challenge due to the many steps involved and is very prone to error. Nelson was concerned that he would hear that there was a form of payment taken away. Roberts researched the State of Wisconsin filing system and found that the State of Wisconsin only offers the option to file and pay online or file and pay by mail. The board felt that this would be a great time to make a change in payment policy and send notification to permit holders ahead of the busy season. The outcome would be that the mail- in filing and payment arrived together. Roberts will contact Justin with Innline to make the appropriate changes (just eliminate the option of mail-in check). Kufrin moved to approve the elimination of the “mail check” option; Nelson seconded. All ayes.

Discussion of Audit
Nelson and Larson remarked that they were happy with the audit; “clean audit” there was nothing out of order and no suggestions. Kufrin commented that it showed the DCTZ was prudent with their spending of the 4% and that not a lot changed with expenses. Kufrin noted that at next month’s full commission meeting everyone would get a copy of the audit to discuss (50 copies on hand for next meeting, one for each municipality and commissioner). Kufrin asked Roberts to contact Schenck SC for an Executive Summary (the narrated, friendly version of what the audit is saying) for the Commission. Lensert explained that collections that haven’t been dispersed are part the Zone’s assets. She further pointed out that everything outstanding in receivables including late fees and penalties are included in the total. However due to compliance we may or may not be able to collect the money. Moreover, Lensert explained that the DCVB isn’t paid until money is collected and booked as revenue. Van Lieshout thought there should be a breakdown of the $109,505 fund balance, so that there is an understanding of the liabilities. Kufrin noted that a heads up should be given to Mike Koneczy and that he should present this information. Nelson pointed out that there is money withheld during the slower revenue months (typically 3-4 months of the year) of the payments due to the DCVB that is used for operations. In July, the money is typically paid back. This is a hand shake agreement between DCVB and DCTZ. The idea is to build the fund balance. In order to build the balance the board needs to pay attention to enforcement; there is the unknown cost that cannot be budgeted for of legal bills. Van Lieshout asked if there was a written policy statement. Nelson thought that in the future, a written policy on enforcement needs to be in included in the agreement. Nelson thought it would be a good idea to get a summary of DCTZ operations, legal enforcement policies and the DCVB withholding agreement as a public document. Kufrin felt the challenge would be when you get into closed session and talk about individual properties, it would be up to the Commission to decide what dollar amount was worth pursuing and how long to pursue due to legal expenses. In summary, Kufrin felt that you can’t say the DCTZ will pursue at no cost on the low end, it just isn’t worth attorney involvement.

Discussion of Officers
The Commission has four officer positions: Chair, Vice Chair, Secretary, and Treasurer. Kufrin advised the Committee that his term as Chair of the DCTZ would be up in June. He does not intend on staying on and would like to pass the responsibilities on at the June 21, 2012 meeting. Kufrin advised the Committee that he spoke to Weddig about possible interest in accepting the Chair position, but Weddig felt that it was too difficult to commit with the business responsibilities of a small, owner run business. Kufrin felt that it may be important in the future for the Commission to discuss the number of meetings with the full Commission due to attendance and time constraints. He felt that the Executive Committee meetings were more productive and required less effort. All felt that six times a year with the full commission was acceptable with the Executive Committee meeting on the alternate months.

Kufrin suggested that a possible solution to the time limitations of a future Chair would be to structure the committee with a Co-Chair / Vice Chair. Kufrin discussed the concept of progression up through the positions of the Committee. Nelson discussed the advantages of Van Lieshout for the Chair vacancy with his skillset and understanding of how government works. Larson liked the idea of Van Lieshout as Chair and Nelson as Co-Chair/Vice Chair with a possible one year term. Van Lieshout, who is a professional administrator, pointed out that there are few guys like Kufrin that do, “it well”. He said he would like to perform the duties of Chair and would be glad to do it, but would like someone to partner with in some form. He was concerned about not knowing the relationships and history. Kufrin pointed out that challenge is attendance with the full Commission, especially during peak season months. Kufrin looks at his participation in the zone as a generation of income and a well-functioning Zone benefits each Village and producing income that comes back to the Village. For a Village Administrator the Village door never closes when attending meetings unlike a local business owner who accepts the responsibilities of a position on the Commission, his/her business may suffer.

Skare voiced his interest in the Vice Chair and felt that he could offer his local relationship knowledge in addition to his familiarity of Open Meeting Law. Kufrin noted that the Committee was not empowered to make a decision today, but the election would be held in June. Kufrin asked those who were interested to send him an email so it could go on the May 17th, 2012 agenda for a vote at the June meeting. Nelson said he would like to continue as Treasurer. Larson offered his assistance to the new chair and would be interested in the Secretary position if LeClair decides to resign from the position. Kufrin felt it was a good defensive action to separate the Secretary and Treasurer positions so that during the “peak” season months the Secretary can also sign checks.

Consider motion to convene into Closed Session pursuant to Wisconsin State Statutes, Section 19.85(1)(a)(f) or (g) to consider enforcement action against certain businesses regarding the room tax permitting, late payments and reporting, and State Statutes, Section 19.85(1)(e): deliberating or negotiating competitive or bargaining reasons requiring a closed session to discuss the Entity Agreement negotiations and DCVB audit issues.
Kufrin moved to convene into Closed Session as per statutes named; Nelson seconded. All ayes by roll call.

CLOSED SESSION

Consider a Motion to Reconvene into Open Session
Kufrin moved to reconvene into Open Session; Larson seconded. All ayes by roll call.

Van Lieshout left the meeting.

Adjournment
Nelson moved to adjourn; Skare seconded. All ayes. The meeting adjourned at 11:20 a.m.

Respectfully submitted,

Kim Roberts
Administrative Assistant

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