Door County Tourism Zone Commission : Meeting Minutes

Home Page: Meeting Minutes

November 19, 2009 Door County Tourism Zone Commission Meeting - Minutes

DOOR COUNTY TOURISM ZONE COMMISSION
MINUTES OF NOVEMBER 19, 2009
Clay Banks Town Hall

ACTION ITEMS:
Tice moved to accept the agenda as submitted; Larson seconded. Motion passed unanimously.

LeClair moved to accept the October 15, 2009, minutes as amended; Cyrus seconded. Motion passed unanimously.

Nelson moved to approve the Door County Visitor Bureau Strategic Conversation as presented; Zacek seconded. Motion passed unanimously.

Nelson moved to approval Reports and Payables as submitted; Larson seconded. Motion passed unanimously.

Nelson moved to table the Compliance Policy decision until December�s meeting; Larson seconded. Motion passed unanimously.

Committee Members Present by Roll Call: Bob Kufrin, Mary Boston, Richard Briggs, Andy Coulson, Pauline Cyrus, Sandy D�Amico, Diane Jacobson, Mike Johnson, Jeff Larson, Jennifer Laughlin, Little Bit LeClair, Bryan Nelson, Tom Olsen, Sarah Sawyer, Dick Skare, Chuck Tice, Bill Weddig, Nora Zacek (9:22)

Excused: Carol Stayton, Nancy Goss; Dianne Lensert/Kerber Rose

Absent: Tom Benzshawel, Paul Flottman, Dave Holtz, Debra Jeanquart

Also Present: Jack Moneypenny, Mary Denis, Sally Everhardus, Phil Berndt, Jon Jarosh/DCVB; Bill Vande Castle/Vande Castle, SC

Call to Order
Chair Bob Kufrin called the meeting at 9:04 a.m.

Approval of the Agenda
Tice moved to accept the agenda as submitted; Larson seconded. All ayes.

Approval of Minutes of October 15
Misspelling of �Weddig� was noted on page 2, line 15. LeClair moved to accept the minutes as amended; Cyrus seconded. All ayes. Kufrin noted that the Finance Committee minutes are for information only.

Kufrin introduced Jennifer Laughlin from Village of Forestville. She is from Country Ovens; she has done marketing and advertising for 10 years. Also introduced was Tom Olsen who replaces Amy McClelland for Nasewaupee; his wife Brenda is their Town Clerk, and he has been a business manager in the Sturgeon Bay school district for 21 years and 17 years in either the town or county. All around the table gave short introductions.

Administrative Assistant Report
Kirkland explained the number of permits issued since October�s meeting (17) but mostly to one entity, RCI, which does timeshare swaps. They collect rentals and pay room tax if a timeshare person upgrades their stay to a level beyond their own; they do this for 4,000 properties across the country. Weddig asked whether there are other timeshare companies who should be contacted; Larson said Interval International and RCI are the largest; he has contact information for II. Weddig noted that �timeshares� are not specifically listed in the Compliance Policy draft.

Nelson asked if Kirkland had started sending e-mail reminders to small owners. Yes, she sent to all about two weeks before the deadline; however, she still sent out 62 late notices. She�ll continue to send reminders monthly. Non-permitted owners are still a problem, and more certified letters will go to those who haven�t responded. There are 128 properties with outstanding late fees/penalties; Kerber Rose wants them cleaned up before year-end. Kirkland sent out reminders on those as well. There is a report on small properties� tax collections 2008/2009 in this month�s packet.

Report by Door County Visitor Bureau on Marketing Efforts
Mary Denis said website visits are down 1%, but are inching up. October to October is up 12%. The eBrains contract started later in 2009; she�s confident they�ll match 2008, but not their goal. Ad programs and impressions are on the report. Group sales continue strong and there are many inquiries. Two group shows are coming: Ohio Road Show and Circle Wisconsin Forum. Holiday Showcase is in December; they get many leads from that. John Jarosh noted the Media Impressions (pg. 3) got a nice jump in October with a mention in USA Today and as a �Great Fall Foliage� destination on the Today show. There is one holiday theme winter/shopping press tour yet to come. Jack Moneypenny noted that Circle Wisconsin motor coach group has nominated Denis to sit on its Board of Directors.

Consideration of Approving the Door County Visitor Bureau Strategic Conversation for 2010
Moneypenny and DCVB staff gave their presentation on the Strategic Conversation and handed out a copy of the PowerPoint presentation. (Olsen left the meeting.)

Moneypenny noted that they did not make corrections from last year�s year-end, so some numbers are skewed and they�ll fix those, go to the Board and then back to the TZC. They know that September figures have shifted. Moneypenny feels this is a thoughtful plan; it�s Year 2 of a three-year plan. (Nora Zacek arrived.) The plan is about unifying and integrating all 19 communities and giving them an understanding of what the DCVB is doing for Door County. The Product Development category is projects such as bike trails that benefit individual municipalities but also tourism. The DCVB is looking at increasing operating revenue through different means.

The one-year goal is to cultivate ongoing partnerships at every level with other municipalities so there is an integrated visitor network to bring tourists here and back again. They will strive to maintain the DCVB operating budget; the 2010 budget is based on a flat budget from this year�s.

The current marketing is aggressive and creative. Their figures show Door County down 1.3%, which is phenomenal compared to the state. All municipalities need to be on same page; they�ll continue CTA beyond just managers to include retail clerks, wait staff, etc. They will let people outside tourism know how it affects them (manufacturers, employees, general quality of life). They�ll partner with member businesses, community organizations, and independent members. They�ll keep co-op opportunities available and affordable. Moneypenny has attended presentations at recent conferences and with the DCVB�s new ad agency about social media networks, which are the next frontier, beyond just the Internet.

Denis said they�ve found women are their primary market, with income over $75,000 and from the Midwest. Major interests are arts, culture, silent sports, shopping, culinary, LGBT market, and multicultural market. They will be redesigning the website with a new skin; the back information will remain the same but they�ll add such items as social marketing, quick-click videos, scrapbooking, and blogs. They will become a presence on all official and unofficial sites (Facebook, Twitter, and LinkedIn). Advertising on travel sites is the third prong (Trip Advisor, etc.). All these goals will be reached by the end of first quarter 2010.

Telephone inquiries will target marketing by analyzing area codes and matching advertising in those areas. Denis has done seven brand awareness meetings and will continue to do more. Packaged travel (group, meetings, and events) is another target; she will have leads for next year as well as a �fam� tour for group travel people. They still have a cautious approach to meeting and event planners but will extend into wedding planning, attend wedding shows, and have that presence on the website. The redesigned monthly report for the TZC now includes web visits, page views, and length of sessions, Top 10 pages, and pay-per-click results.

The Tip Newsletter connects with 200,000 subscribers by e-newsletter, which is sent and resent monthly. It has good open rates (10% is high; average for this kind of e-newsletter is 2% to 5%). New next year: Advertising programs and campaigns as well as gross impressions against 2009, bartered time, value-added through the ad agency. They�ll have quarterly ROI effectiveness reports.

Jarosh presented communications and PR. The DCVB will continue with Geiger and targeted media outlets (press releases), add to the image photo library to maintain availability for travel media. The �Explore the Door� travel show will continue; videos are available online and will become important through social networks. They currently have 4,200 views a month on their own You Tube channel. He�s promoting TV/movie/commercial location shoots. Film Wisconsin has changed some, but there is value there. Next year, they�ll shoot high-def aerial video as B-roll for the media. His goal is to increase impressions. The DCVB will host 60 journalists on 5 �fam� trips in 2010. Publicity goals will be an increase of 3% and increase for �Explore the Door� by 2%.

Everhardus presented information about the Visitor Center. Their specialists continue to work with lodging facilities to book individual rooms still open. They�ll further brand the Visitors Center by upgrading it with physical changes in the lobby (new carpeting, move the kiosk inside, and have two registration kiosks). They�ll solicit more customer feedback, track area codes and ZIP codes.

Moneypenny added that when the Visitors Bureau building burned 10 years ago, they were obligated to use same footprint and no ADA requirements were met (grandfathered). They need to change out the heavy doors and add an automated door opener. Energy use will be looked at and an �airlock� added. He discussed local partnerships and his attendance at county board and town meetings throughout the year. He wants all TZC Commissioners to understand the DCVB�s inner workings because they�re liaisons with local boards. Bruce Hill continues to handle the CMF fund and communication there is vital. The DCVB sent out a survey and got a 3.68 positive rating out of a possible 5.

Denis talked about Product Development, which includes shoulder-season marketing packages, Blossom Fest is now a 6-week period, Kingdom So Delicious is three weeks in September before the color hits, and Holly Days & Holly Nights is a new winter holiday shopping promotion. They�ve found that e-postcards work well. They now have 10 niche guides and want to add birding, Niagara Escarpment (2010 is Year of the Niagara Escarpment, declared by the State of Wisconsin), Wi-Fi, pet friendly, handicapped accessibility, and so on. It�s a way to hit niche markets without redoing the Visitor Guide.

Moneypenny added that they�re watching a Cherryland airport expansion and will be reporting on cellular availability/clarity. The bike trail is in the grant process for the entire county; some municipalities have a plan with plans but they have to connect the paths. Nelson sits on the county�s bike trail committee and is liaison with his Baileys Harbor committee.

Everhardus reported that the CTA program has add-on modules to recertify people and fine-tune areas such as active listening and dealing with angry customers. They�re offering specific sessions on specific communities for familiarity. They have a 20% renewal for 150 certified CTAs, which is high (national average is 5%).

Moneypenny noted that lobby visits are up 18% over 2008; many are new visitors. They want the lobby to become an experience center with flat screen TVs showing performing arts, artists, music from local musicians, so that people leave the Center having already experienced Door County.

Everhardus said the Destination Marketing Association International (DMAI) has an accreditation program, and the DCVB will be accredited by March 31; it is already accredited in Wisconsin�s association. Internally, they�re developing a calendar for maintenance schedules/housekeeping.

Moneypenny showed cover of the Visitor Guide. They had three concepts and this one got 68.3% of the vote. They are already building a list for the January mailing and have increased the printing to 250,000 to include outlets around the state such as airport baggage claim areas, etc.

Moneypenny asked that TZC members link to the DCVB website. He asked that he get e-mail addresses for municipality board members to add to the DCVB bi-weekly e-mailings. Berndt has been adding names, but some do not make their e-mails available. LeClair noted that she receives notices from her town clerk every month. Kufrin talked to Nate Bell at Door County Computer about wireless; Bell�s concern is identifying public Wi-Fi sites where those businesses not have signed a release to be true public access. The DCVB should confirm hotspots; Moneypenny wants to make sure they�re not �purchase required.�

Kufrin asked about the Visitor Guide 2009; were the community description components proofed by the local business associations or internally? Everhardus said each is written by the communities and then proofed.

Skare asked when the Visitor Center renovation will begin; it will be over winter. Moneypenny noted that the fulfillment office is right behind the lobby wall; a possibility for the future is to move that office and take the wall out, nearly doubling size of lobby. Skare asked if renovations will be out of cash flow or through a loan; Moneypenny said it�s budgeted to be paid out of cash flow. Skare said ADA is positive step and has made a difference for his business.

Kufrin commended the DCVB staff on the good organization and understandable goals of the Strategic Conversation. It�s clear on who-does-what, and co-op marketing campaign calendars are useful for businesses to plan. He stated that the DCVB can make changes to react to changing situations.

Weddig asked about the $285,000 in CMF; is that a reasonable figure? Moneypenny said 2009 is down $30,000 on collections ($270,000), so the DCVB went to the communities to adjust for the shortfall. Sturgeon Bay is low for many reasons and it could turn around; they will wait beyond February to make any decisions about changes. Weddig asked if the communities are rolling money into next year; Moneypenny said they could earmark funds this year but they do not want large reserves going year to year. Hill is working on funds not yet spent. Weddig asked if the CMF can roll into Year 4 from Year 3; Moneypenny said yes, but the DCVB would restrict the budgets and ensure that the money is used.

Nelson moved to approve the Strategic Conversation as presented; Zacek seconded. All ayes.

Discussion of Current Comparatible Occupancy Numbers for 2009
Lensert was unable to be at the meeting. It seems all had a good September. October was also good anecdotally.

Consideration of Approving Reports and Payable plus Receipts to Date
Nelson moved to approval Reports and Payables as submitted; Larson seconded. Kufrin drew attention to page 2; the Finance Committee is still wrestling with the budget. The TZC started the year with a $26,000 fund balance and will end up with about $20,000. We operate on negative cash flow for approximately five months of the year; unless there are revenue increases (e.g., through compliance), we�ll spend more than collecting. All ayes.

Presentation by the Finance Committee on Issues Facing Development of the 2010 Zone
Finance is meeting on Monday. The cost of compliance is an unknown TZC administrative legal expenses are relatively fixed. We anticipate having a budget for approval at the December 17th meeting. Nelson said there are some cost savings with Kerber Rose�s charges; they write off some hours as pro bono. Lensert has suggested correcting an inefficiency with reporting re: Lodgical and our Bay Lake system, which takes hours to input manually. An interface could save up to $10,000 a year. There�s really no alternative to internal controls; audits require a certain level of accounting.

Vande Castle said there are differences in communities� ordinances; when the Zone assumed responsibility for compliance, it was supposed to be consistent across all municipalities. The municipalities weren�t updated on the cost for compliance and success rate of recouping expenses. Pursuing doesn�t necessarily mean recouping; e.g., the judge stated in the Barbican case that while the TZC was entitled to the room tax, other liens came in front of us and there was no money left. As it stands now, recoupment benefits member municipalities but not the TZC; Weddig feels we need to retain the late fees and interest and start an ongoing fund. We�re pursuing compliance on behalf of municipalities; he felt the cost should come from the 30%, not the marketing end. The TZC could pay back from the reserve if there�s extra, but recoupment is hard to predict.

Kufrin said all are welcome at Monday�s meeting. There�s no specific timetable to approve the budget, but we have to get a handle on compliance and expectations that will drive the numbers going into the budget. Aggressive enforcement means higher costs. What do we expect compliance enforcement to mean as opposed to collections? Nelson said we have to be careful not to disincentivize anyone from identifying those in noncompliance. Skare said it�s mutually beneficial to have strong enforcement and suggested spreading out the cost; without enforcement and the necessity to pay, all suffer. What can we do legally and with our agreements? We have to check State statues for our parameters.

Kufrin said we have no hard figures to present today, just our discussion from the previous meeting. Larson asked about recouping legal costs. Kufrin said much is done toward enforcement before a judge awards any costs. Right now, the ordinances don�t give us authority to charge back legal costs, so it�s a Catch-22. Tice asked Vande Castle about Barbican�s ownership; Vande Castle said the bank owns it and a relative is leasing it. It�s an unusual case because it was run as a sole proprietorship before going bankrupt. Withholding taxes were paid first, then federal, then state, then sales, etc., etc. We are equivalent to a sales tax (for future reference); however, we were so far down the list, there was no money left. The owner acknowledged the debt but there was no evidence about actual collections. Weddig said the tax is a pass-through; how could the court mix it up with his income? Vande Castle said if the money�s not segregated, it goes through regular channels.

Tice asked about sale of property and withholding money equal to the tax due. If a previous owner didn�t pay, should we notify people of this clause? Vande Castle said it would be appropriate to notify title companies. Kufrin said municipalities get a property transfer request, a Letter of Specials on amounts due, assessments, etc. When a property is refinanced or sold, it would simple for the clerks to look through our list and note whether a property is permitted; if so, they�re required to note that any outstanding room tax be paid at closing. Vande Castle added that the new owner needs to contact the TZC to update a permit if they continue renting. VC said most municipalities have ordinances that state if anything is outstanding, they�re not eligible to get a permit until paid (liquor, etc.). We can withhold a license until paid. Kufrin asked all to talk to their town boards about having clerks go over the list.

Johnson asked if we can get a lender to pay the Commission directly. Local municipalities are paid by banks for property tax; can�t they set aside an escrow for room tax? Vande Castle said it�s possible when the escrow is sufficient; if a bank is aware ahead of time, they can schedule long-term payments and build it into the escrow. Weddig asked if room tax is lienable. Vande Castle will look into it but, as far as he knows, it�s not for a sales-type tax. There are provisions for utility bills, property taxes. Chapter 71 or 72 of the State statue addresses tax provisions that tell county clerks what can be put on the tax bill; he will double-check.

Discussion of Specific Enforcement Actions before the Door County Circuit Court
Kufrin asked about update on cases. Two are wrapping up in Door County Circuit Court. Vande Castle said a default judgment is pending; they�ve been hampered in filing because of a lack of cooperation, and the cost of pursuing is often dependent on obstreperousness. There have been no-shows by the parties in both cases. The court has a default judgment pending against Hanson that includes legal fees. Maple Grove has given no cooperation or communication. We have the authority to inspect records; she was given an opportunity to comply and is now in contempt of court. We�ll have an auditor inspect the records; there�s an assumption she�ll produce them, but she may not. A sheriff or PI can go along with the auditor. The other option about which he�s alerted the court is a provision in the statute to estimate taxes; we might be able to give a best guess and get a judgment. The concern is ongoing costs; one audit he did put the fees close to $10,000. We have the right to collect audit fees, but we don�t know if the revenue is there. State will estimate and just send a bill with a time-certain to contest it or have to pay. Kerber Rose would prepare an affidavit of estimate and file that with a request for judgment. The court is sympathetic to doing it that way.

Kufrin asked about the next steps in these two cases. Vande Castle said there are no hearings unless there are objections. The time limit has expired so it�s a matter of signing an order. Tice asked if we need the court�s permission to get estimate or can we just make our best judgment and send a letter? Vande Castle said the problem is actual collection. Tice suggested a collection agency (50% fee) instead of the courts. The court route has unlimited expenses and no expectation of recoupment. Vande Castle said a court judgment continues to be a lien on the property and accrue interest when refinancing or selling; that�s the benefit of the court system.

Vande Castle said part of problem is that it�s new territory. (Coulson left the meeting.) The first hearing should�ve been 15 or 20 minutes but it took an hour explaining how the room tax system works. He has not yet filed the motion on Maple Grove but will now; we have to get affidavit from Kerber Rose including costs and expenses of proceedings. Weddig asked if a court judgment is lienable, why is bankruptcy different? Vande Castle said you can have a judgment, but the judge in bankruptcy can throw it out.

Kufrin said our permit is a no-cost permit that expires December 31, 2011. Compliance language talks about non-renewal; if we have a property that gets into compliance (not merely collection), do we have ability to suspend a permit? Then we notify Moneypenny that they are not active and their business cannot be on DCVB�s website. Vande Castle said we could do that. We�d have to notify then owner and give an opportunity for a hearing in front of the Commission. Now, policy says �non-renewal� doesn�t happen until 2011, but during compliance, that may be a powerful motivator. Regarding �revocation of the permit,� Tice felt they�ll just stay in business under the table. However, he put it in despite some of those objections.

How would taking a property off the website affect the DCVB? Moneypenny said he�d have to prorate dues and send back the unused amount as long as they�re noncompliant. LeClair suggested pulling them out of the Visitor Guide if there are still taxes owed by the end of the year. That would be more punitive than just the website. Kufrin noted there�s a difference from difficulty in collection to becoming noncompliant. There are late payers but they don�t have a noncompliant status unless 1% kicks in. Do we go by the amount or the days late? Nelson said Lensert feels it�s the same owners; it has become a habit or fault. We do add penalties but it doesn�t rise to intent to defraud. Vande Castle said the analogy is like property taxes; there�s an undefined grace period but, at a certain point, they start enforcement. Tice felt we should deduct the late fee from the property�s next payment so the taxes would be short; we collect our money first that way.

Weddig asked about the Stadium Tax. Vande Castle said because it�s part of the sales tax, it�s handled by the State. The State collects a processing and handling charge, and the State is six months behind on collections. Tice said compliance pursuit depends on possible tax income.

Kufrin said the policy draft creates an internal �collection agency� with costs at each step. At some point, it engages an attorney, the courts. It starts after you�re late 10 days, then the permit holder starts getting scripted letters. What is the appropriate time for the Commission to start compliance? From a business perspective, when is the right time for us to be engaging our collection agency? The draft policy is quick and thorough; is 10 days appropriate? Nelson is worried about the PR aspect. Weddig felt if you�ve collected taxes but not paid by the end of the year, that money will disappear over the winter. There is a list of occupancy dates for all establishments. What about two months after the property�s season ends? What about year-end? Kirkland noted that in the meantime, the municipalities and DCVB are not getting money they expected. When we have to take collection action in court or otherwise, fees increase exponentially. Additional sanctions can apply to not meeting obligations.

Kufrin noted that there is a $25 late fee for not paying at the deadline; afterward, it adds 1% for the second month and then can be 25% of the tax. However, if we take out perennial lates, about 75% pay after the first late notice. He asked Kirkland to get chart of aged receivables; how big is the problem? Finance will have a closed session to look at the figures. If we have a feel for it, we can go over the magnitude. Tice asked if people are late because they forget; Kirkland said the reasons run the gamut. Briggs suggested if someone is in arrears, they automatically get letters and then a more severe letter. Kirkland noted the current lates/penalties total $13,000, much of it from one owner. However, there are those not filing reports at all, so we have no idea what�s owed.

Nelson would like to think about it one more month. He moved to table the Compliance Policy for one more month; Larson seconded. Nelson would like a closed session on the December agenda. Kirkland will have the reports for Monday�s Finance Committee meeting. All ayes.

Adjournment
Larson moved to adjourn; Skare seconded. All ayes. Meeting adjourned at 12:10 p.m.

Respectfully submitted,

Kathy Kirkland
Administrative Assistant

View all from: 2011 2010 2009 2008 2007