Door County Tourism Zone Commission : Meeting Minutes

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December 20, 2007 Door County Tourism Zone Commission Meeting

DOOR COUNTY TAX ZONE COMMISION
MINUTES OF THE DECEMBER 20, 2007 MEETING
Jacksonport Town Hall

Action Items
Hill moved and Weddig seconded to move agenda items #14 to the #4 position, #13 to the #5 position and #12 to the #6 position. Motion carried unanimously.

Hill moved and Weddig seconded to approve the minutes of the November 15th meeting as submitted. Motion carried unanimously.

Hill moved and Stayton seconded to approve the amended DCVB marketing plan and budget and to release $700,000.00 to the Visitor Bureau as �start-up� money with the provision that the DCVB come to the Commission with quarterly progress reports and requests for funding. Hill then amended his motion to remove the second point about releasing $700,000.00. Hill then withdrew that amendment and offered another amendment to release 5/12ths of the amount of excess over projected taxes (or about $200,000.00). Stayton seconded the amendment. The motion to amend carried unanimously. Then the entire amendment carried unanimously.

Nelson moved and Coulson seconded to approve moving our funds to Associated Bank�s Eurodollar Sweep Account. Motion carried unanimously.
Sarkis moved and Hill seconded to approve Kerber-Rose�s reports along with the disbursements in the monthly check detail (to include the 5/12ths of the collected tax vs. estimated tax). Motion carried unanimously.

Sarkis moved and Stayton seconded to approve the engagement letter with Kerber-Rose for 2008. Motion carried unanimously.

An Audit sub-committee was formed to develop a Request for Proposal from auditing firms and interview said firms to bring forth a recommendation to the Commission. Committee Members: Kufrin, Nedderson and Nelson.

A Budget sub-committee was formed to develop the Commission�s 2008 budget and report back to the Commission. Committee Members: Coulson, Hill, Kufrin and Nelson.

An ad hoc committee was formed to plan the required annual meeting. Committee members: Coulson, Hill, Stayton and Weddig.

A by-laws ad hoc committee was formed to analyze and amend the by-laws as drawn up by Attorney Vande Castle and recommend those changes to the Commission. Committee Members: Kufrin, Nelson and Tice.

An ad hoc committee was formed to develop and recommend amendments to the Entity Agreement. Committee Members: Hill, Kufrin and Nelson.

Members present:
Andy Coulson, Bruce Hill, Bob Kufrin, Barb Lautenbach, Ned Neddersen, Bryan Nelson, Jim Sarkis, Carol Stayton, Chuck Tice and Bill Weddig.

Also present: Dianne Lensert, Jack Moneypenny, Colonel Tim Lawrie, Vicki Wilson, Paige Funkhauser, Jon Jarosh, Greg Sunstrom, Sue Sunstrom, Fred Anderson, Dick Skare, Karl Stubenvoll, Sally Everhardus, John Lowry, Jerry Zaug, Claire Murphy, Frank Murphy, Miles Dannhausen Jr, Debbie Krause, Dina Boetcher, Dane Carter, Todd Trimberger, Natalie Nedderson, Joe Schnabel and Bill Brown.

Chairperson, Kufrin, called it to order at 9:03 a.m.

Hill moved and Weddig seconded to move agenda items #14 to the #4 position, #13 to the #5 position and #12 to the #6 position. Motion carried.

Hill moved and Weddig seconded to approve the minutes of the November 15th meeting as submitted. Motion carried unanimously.

Kufrin called for any comments or correspondence. None were offered.

Presentation and Discussion of the DCVB Marketing Budget
Jack Moneypenny handed out hard copies of the latest budget. He stated that these documents have been discussed and unanimously approved by the entire Board of the Door County Visitor Bureau. Moneypenny prefaced his remarks by explaining the balance he attempts to strike between marketing the Tax Zone as opposed to marketing Door County as a whole. He stressed that the DCVB is the marketing organization for all of Door County. But he will endeavor to ensure that the tax monies collected from the TZC get invested toward the effort of getting �heads in beds� of properties that fall within the Zone.

In answer to a question of how he allocated between administrative and marketing budgets, he stated that he has done so based on actual observations of the way his office staff uses its time. He stressed that he believes that 110% of his own personal time is spent on marketing. He also pointed out that every dollar spent on administration is a dollar that cannot be used for marketing.

Moneypenny answered a question from Kufrin about membership loss by saying that they experienced a net loss of 6 members since August 1st. Kufrin asked if any of the repayment of their loan cost is coming from the TZC monies. Moneypenny answered, �Absolutely not.� He also admitted that the Visitor Bureau is in a hole due mainly to the decreased income from dropped advertising when the Go Guide was discontinued. This resulted in a $163,000.00 shortfall while the organization continued to spend as if it were business as usual. He stated that it will take him a year or two to get out of that hole. But he will not use any TZC monies to do that. Nedderson asked about reinstating the Go Guide. Moneypenny said no. He accepts responsibility for the entire workings of the organization although he cannot explain every detail of what went on before he arrived.
He explained that his $20,000.00 �arts initiative� line item is on the administrative side of the budget because he is establishing that advisory council as a think tank. Once it turns into a running program he hopes to move it into the marketing budget. Moneypenny explained his line items for database, computer server and backup are only a beginning to get started on updating all this equipment. Kufrin questioned that approach of not buying all the needed new technology equipment immediately because the control and tracking issues need to be taken care of sooner rather than later.

Moneypenny assured the Commission that the draft report of the audit shows no �smoking gun� and that, upon his arrival, he immediately put normal business controls and systems in place. In fact the auditors commented that the controls that he had already instituted are exactly what they would have recommended.

Kufrin asked how the proposed budgets fit the transition to a calendar/fiscal year. Moneypenny answered that he will come to us next May to approve an amendment for a �short year� from August 1 through December 31, 2008 in order to make that transition. Then he will come back to us in October to ask us to approve a 3 year strategic plan (with 1 year detail) beginning January 1, 2009.

Hill took the lead in comments and questions on the marketing plan. He opined, given that a majority of DCVB members are also in the Tax Zone, that we should think about why the budgets are split into Administrative and Marketing components. Longer term we should be asking if that is the right way to do business. Hill asked for a concise �bullet-pointed� report (only 1 or 2 pages) on what marketing efforts and groups Moneypenny is focusing on. Moneypenny responded that he will be happy to provide such a paper as long as everyone understands that we are dealing with rapidly moving targets.

In answer to a question about why he used a 57% figure for overhead, Moneypenny answered that we should be attempting to be a leaner organization (because he has the sense that we were not that in the past). Hill asked for metrics on the value of the podcasts. Moneypenny answered that, anecdotally, a number of his travel industry contacts have commented that the podcasts are fantastic. Kufrin questioned the roughly $25,000.00 budget for the podcast program. Moneypenny answered that, until now, Jon has been using his own personal equipment. Jon added that his personal equipment crashes frequently and that the podcast program is at a point where it deserves professional production equipment.

Hill asked about the Midwest Living buy vis-�-vis the talk in the past about getting to our core customers more frequently. In light of that, Hill thinks that the Harley buy is perhaps more effective.

He�s also worried about the small size of the contingency fund. There ensued a brief discussion with Moneypenny on his approach to the contingency figure.

Hill talked about which efforts drive �heads in beds� as opposed to �feet on street� since the State Statute tells us our Tax monies must be spent to drive overnight stays.

Weddig questioned the $55,000.00 interest income line item as being realistic. Kufrin answered that that is the actual interest earned. Weddig also voiced his concern that there may be insufficient contingency funds available to address public relations emergencies such as beach closings. The discussion then turned to the possibility of amending our agreement with the DCVB because it does not structure our funding in such a way that it enables the Visitor Bureau to expand its services to the new level we�re demanding.

Coulson asked if the DCVB is addressing winter business. Tice asked, with $1.7 million in revenue to date and the fact that we�re spending all of it, what do we do if the economy collapses and we have all these contracts with vendors. Moneypenny answered that the vast majority of this money has already been collected. He said that his Exec. Committee urged him to keep the stated $90,000.00 - $100,000.00 contingency for just those eventualities.

Neddersen asked Moneypenny to elaborate on his new initiative for Group and Meeting Sales. Moneypenny explained his target for getting these meetings and conventions to Door County. This line item will fund one individual who will be a contract laborer. He already has a specific individual in mind. Jack would like to have this effort drive home 2,000 room nights for the first year for an investment of $80,000.00.
Kufrin again brought up the issue of equity and fairness � i.e.: marketing the TZC communities as opposed to the entire county. He asked what the DCVB is doing to bring Sturgeon Bay into the TZC. Moneypenny responded that he is trying to strike the careful balance while all the time working to market the Door County brand. There ensued a discussion regarding how to pick up the effort to get Sturgeon Bay into the Zone.

Hill moved to approve the amended DCVB marketing plan and budget as submitted and release $700,000.00 from tax collections to the DCVB as �start-up� money to get the plan rolling with the provision that, in April, July, October and January, Jack present the Commission with a quarterly review of actual vs. budget. Carol Stayton seconded. Kufrin pointed out that point #2 (the $700k) is out of order because our entity agreement requires us to reimburse rather than advance funds. Discussion ensued during which Moneypenny explained that, under the current agreement, DCVB can only submit expenses for approved budget items. Tice reinforced that we can only reimburse under the current Entity agreement and that we can�t amend the agreement at today�s meeting because it is not on the agenda. Moneypenny said that he is asking for an opportunity to earn our trust and, yes, he would like to get to a point where he can report quarterly and submit payment requests quarterly. Based upon Moneypenny�s assurance that he would come back to us if they need more money in the next 30 days, Hill amended his motion to remove point #2 about the $700,000.00. Kufrin then proposed the idea that, given the excess taxes collected over projections, it would be consistent with our agreement to write the Visitor Bureau a check for 5/12ths of that overage (the fraction is derived from how far into the DCVB�s fiscal year we are at present � August 1 through December 31). By Kufrin�s quick calculation, we could approve a payment for approximately $200,000.00 now.

Hill withdrew his amendment and moved, as an amendment, that we pay the Visitor Bureau 5/12ths of the excess tax collected, or about $200,000.00. Stayton seconded the amendment. The motion for the amendment passed unanimously. Then the entire motion passed unanimously. It was noted that complying with the 3rd point of the motion about quarterly reporting and disbursements will require an amendment of the Entity Agreement.

Moneypenny took this opportunity to make the point that any marketing suggestions from members of the Commission should be made to the DCVB, not the Commission, lest the Commission meetings become a venue for any citizen to bring forth marketing ideas.

Dane Carter from Associated Bank handed out a hard copy of options for managing what has become a large standing balance in our bank account. He explained 3 options for us to consider. Nelson moved and Coulson seconded to move our funds to the Eurodollar Sweep Account. The motion carried unanimously.

Original agenda item #4 regarding Kerber-Rose reports. Kufrin asked for questions about any of the items labeled a through g. Lensert briefly explained the Profit and Loss statement. Sarkis moved and Hill seconded to approve the reports and check detail including the 5/12ths overage payment (of approx. $200k) to the DCVB. The motion carried unanimously.

Kerber Rose Engagement Letter
Sarkis moved and Stayton seconded to approve the 2008 engagement letter with Kerber-Rose. The motion carried unanimously.

Administrative Assistant Recruitment Committee
Kufrin explained that the Committee�s first choice for Administrative Assistant withdrew as a candidate before an offer was tendered. She did so because of her commute time from Sturgeon Bay to Sister Bay. He also explained that the committee was not prepared to make an offer to its second choice. Therefore the position will be advertised again and the committee will report back to the full Commission. Stayton asked about using a temp agency. Sarkis explained that that will cost $30-$40/hr. Tice asked if it is necessary to have this position located physically at Kerber-Rose�s Sister Bay office. Kufrin thought that having the assistant work remotely might be a possibility in the not too distant future. But for the near term we need to have the administrative assistant operate out of Kerber-Rose�s office.

Lensert reported that the software development effort is in progress. She is comfortable with Bay Lakes� thought processes as it moves forward with this effort.

Check Issuance
Kufrin has alerted the Town Clerks that there will be a significant lag time in issuing checks from December. Kufrin, Nedderson and Nelson will comprise an audit sub-committee to prepare a Request for Proposal for an auditing firm and interview said firms. Similarly, Kufrin called for the formation of a budget sub-committee to deal with the issues we grapple with such as: �do we need to ask for an additional percentage point to finance the Commission�s efforts�? Hill, Kufrin, Coulson and Nelson will comprise a budget subcommittee to develop a 2008 budget and present it to the full Commission � hopefully in January.

Annual Meeting
Kufrin also asked for volunteers for an ad hoc committee to plan the required annual meeting. He explained that an annual report must be in the hands of each municipality no later than June 1st. We also have a requirement for holding an annual meeting for our clients (permit holders plus municipalities). Stayton volunteered to help plan the meeting with the help of the DCVB. Hill volunteered to build the presentation with Jack. Coulson and Weddig also volunteered.

Bylaws
Kufrin called for a by-laws ad hoc committee to recommend changes to the draft provided of Vande Castle. Kufrin, Tice and Nelson will comprise this sub-committee.

Entity Agreement
Kufrin, Hill and Nelson will make up an ad hoc committee to negotiate, with the DCVB, any amendments to the Entity Agreement and report back to the full Commission.

Hill moved to adjourn. The meeting was adjourned at 11:53 a.m.

Respectfully submitted,
Bryan Nelson, Secretary

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