Door County Tourism Zone Commission : Meeting Minutes

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September 17, 2009 Door County Tourism Zone Commission Meeting - Minutes

DOOR COUNTY TOURISM ZONE COMMISSION
MINUTES OF SEPTEMBER 17, 2009
Trinity Lutheran Church � Washington Island

ACTION ITEMS:
Nelson moved to approve the August 20 minutes and accept the minutes approved by committees; LeClair seconded. Committee minutes are: Performance Committee minutes of July 28, and Compliance Committee minutes of April 30, May 4, May 11, May 18, June 1, and June 8. Motion passed unanimously.

Nelson moved to accept Kerber Rose reports and payables as submitted; LeClair seconded. Motion passed unanimously.

Nelson moved to accept the appointment of Dick Skare to the Finance Committee; Coulson seconded. Motion passed unanimously.

Nelson moved to adjourn; Tice seconded. Motion passed unanimously.

Committee Members Present by Roll Call: Robert Kufrin, Richard Briggs, Andy Coulson, Pauline Cyrus, Nancy Goss, Deb Jeanquart (arr. 10:00), Bryan Nelson, Jeff Larson, Little Bit LeClair, Carol Stayton, Chuck Tice, Bill Weddig

Excused: Tom Benzshawel, Mary Boston, Sandy D�Amico, Paul Flottman, Dave Holtz, Diane Jacobson, Mike Johnson, Sarah Sawyer, Dick Skare, Nora Zacek

Absent: George Delveaux, Amy McClelland, Tom Tostrup, Edson Stevens

Also Present: Jack Moneypenny, Mary Denis, DCVB

Audience: Frank Forkert (Liberty Grove); Dave Elliot, Visitors Bureau

Call to Order
Chair Bob Kufrin called the meeting to order at 9 a.m. Kufrin complimented Stayton on the location. There was not a quorum of the whole but there was a quorum of the Executive Committee: Bob Kufrin, Andy Coulson, Bryan Nelson, Chuck Tice, and Little Bit LeClair. The Executive Committee is permitted to conduct necessary business; other items can be deferred.

Approval of Minutes of August 20, 2009 and Acceptance of Compliance Committee and Performance Evaluation Committee Minutes
Nelson moved to approve the August 20 minutes and accept committee minutes; LeClair seconded. All ayes. Kufrin noted that the Performance Evaluation Committee with representatives of the DCVB Executive Committee met on Monday and approved the minutes in the packet.

Administrative Assistant Report
Kirkland noted that, as per her report, there are still issues with noncompliant properties, and she is eager to get Compliance Committee practices into place. She brought up the issue of agents� responsibilities; some are filing late, some are filing but not paying. Should we make owners aware that their agents are not being responsible? Coulson felt that, at some point, the owners should be made aware. Kirkland felt people might balk at putting their Social Security number on the application; she asked about including either when the property was acquired or when the owners began rentals. Kufrin noted a free Wayback Machine site that allows viewers to view old Internet pages that could show rental activity. Nelson felt the owner has the final responsibility even though the agent signed the paperwork; legal relationship is with the owner. Weddig asked about the 10 new permits issued this month; are they owners we had found or those who volunteered? Kirkland said the bulk of new permits are those we find; only a handful of owners call on their own.

Report by Door County Visitor Bureau on Marketing Efforts
Jack Moneypenny said it was another good month. Visitor Center traffic is up again by 18.8% over last August, about 1,400 people. YTD is up 27% over last year, about 27,000 people. They�re seeing many first-time visitors, which is exciting. The Visitor Guide rate on both distribution and fulfillment (direct requests) increased. In 2008, there were 36,500 requests; requests increased 5% up to 38,300, and at the end of August they were at 43,100 � 112% of goal. Kufrin asked if there�s anything in the Guide that�s not online. Moneypenny says the exact electronic version is online, but many people want the physical book. His concern is still that the State Welcome Centers shutdown was handled poorly; some of those communities have become the Welcome Centers and financed them on their own; for example, Kenosha has its cleaning woman who volunteered to fill the racks. If someone picks up a Door County guide at the border, they have hours in the car to read and plan.

About 49,000 Visitor Guides are left for the balance of the year, which should be enough. By the end of October, the DCVB puts out a call to return uncirculated guides and recycles them. January 4 will be the delivery of the 2010 Visitor Guide.

CTA Program. Moneypenny said the CTA program had 125 people as a goal; they�ve commissioned 207 Tourism Ambassadors and there are 25 to 30 signed up for the next class. Classes will start up in late October; there are still openings. Moneypenny said the attendees are all from different communities, so the varying thought processes bring interaction and learning. Larson graduated from the first class. Stayton sent all their people right away; they learned about other communities. Kufrin said the TZC should attend so we�re more familiar with the activities. The time commitment is 4 hours of reading and 4 hours of class. October and November are budget meetings. He asked Moneypenny about holding a class at the December 17 meeting. Denis said they can accommodate about 20 people. If Liberty Grove is not completed, it could be held at Sister Bay or Sevastopol. Moneypenny said anyone could also attend fall classes. Kufrin asked Moneypenny to give an update on fall dates.

Membership & Visitor Guide. Moneypenny said most of the Commission gets the membership newsletter; they�re now in the middle of the membership drive. Officially, it expired July 31, but they�ve extended it enough and it�s now over. Moneypenny said it�s the third year that rates have been held the same. Membership and Guidebook have the same expiration date. Stayton was confused by the dual deadline and others felt they didn�t get the membership renewal, only the Visitor Guide information. Moneypenny said there were two mailings: membership renewal and guidebook. Moneypenny said the last newsletter included membership, deadlines, and cutoffs. Phil Berndt also followed up with an e-mail. The deadline is October 1 for the Visitor Guide. Additional e-mails and follow-up phone calls are being done. Moneypenny says his QuickBooks software is keyed to the membership, so a mail merge was done through QuickBooks and addresses double-checked; 676 invoices were sent. Tice asked about inviting each municipality to join the Bureau; has anything happened with that previous discussion? A point of clarification subsequent to the meeting is that the DCVB now operates on membership renewals 12 months from signing up. The largest group of businesses still has the July 31 renewal date.

Moneypenny noted that the staffers are getting basic flu shots to protect the Visitor Bureau from spreading any viruses.

Web, Group Activity, Media Marketing. Denis said website activity is still down 5% but the gap is closing (last month it was down 8%). August is up from last year. They�re in the process of reviewing measurements such as unique visitors; we�re up 8% August over last year and YTD up 6% from last year. That means 33,576 new visitors to the site this year, which correlates to Visitor Center traffic. PI leads, per-inquiry leads: eBrains delivers 80,000 PI leads, and they have completed that goal with 82,148. Of the PI leads opted in the first year, 44% have visited Door County. EBrains buys ads on sites and give an offer (eVisitor Guide and/or sign up to be a Tip Newsletter subscriber, etc.). The visitor has to opt-in; eBrains confirms and then sends a postcard on Door County, stating they�ll be getting information monthly. That is considered a �qualified� visitor but not an �organic� user, which means someone typed �Door County� and clicked-thru to the site. A marketing program needs a good mix of both. PI leads are cheaper (you get a 2% to 10% opt-in); organic has a 60% opt-in rate. They�re continuing to look at eBrains� contract.

Nelson asked if that�s the extent of search engine marketing. Denis said that there are so many metatags now, �Door County� is No. 1 in the search so we don�t have to pay for it. Regarding group sales, she�s continuing to touch the market but not on a daily basis. She is still attending shows (four total this year); group sales are good for shoulder seasons or group rates in peak season. She praised the DCVB�s new assistant, who follows up for all the senior staff.

The DCVB now has an ad agency, Noise, Inc., a boutique agency based in Milwaukee. The principal has been in the market 20 years and represents entities in Florida and California, among others. An agency can get a better ad rate than the DCVB; that will help pay for their services and help with word-of-mouth social networking on Flickr, You Tube, and Twitter. Moneypenny has recently jumped into social networking and can see its power. There�ll be a flow chart coming for next year�s advertising and co-op ads. Noise, Inc. has won awards and is creative for both niche and broad-based markets. They�ll analyze ROI, phone system response after ads, etc.

Geiger�s numbers are delivering above goal. There will be 50 writers this year alone; 2 more groups this year. Geiger has a good relationship with airlines for lower rates. The AVE monitoring style will probably be changed, and they�ll run dual reports for awhile. Jarosh is working on that and with the journalists.

The DCVB now has 10 niche brochures, including the three newest: Family Fun, Golf Guide, and Wedding Planner. Previous ones are Bicycle/Silent Sports, Lighthouse, Dining, Fish Boils, Antiques, Orchards, Wineries, and Charter Fishing. Stayton asked if the businesses pay for those; she has to pay for the Guide but restaurants get free advertising? Denis said if only a few businesses wanted to pay for it, it wouldn�t be a comprehensive guide. There was discussion as to whether there�s another way to fund them, perhaps have businesses pay for them to give out. Lodging has to pay in the Visitor Guide; Room Tax money is paying for that. Kufrin said the brochures are for what a visitor wants to do �that day�; Stayton doesn�t feel it equates with heads-in-beds. Coulson asked if they bring one out for lodging, that lodging would cover it. Coulson wasn�t aware of the brochures; some are business oriented and others are not. He realizes people aren�t going to come up just for the hotels; he wants the Visitor Bureau to give people a reason to come up. If having a lodging brochure makes it a level playing field, that�s fine. Moneypenny said the DCVB began printing the brochures in house after people asked for specific venues such as wineries. After several of these started, Moneypenny had them done professionally. All of the brochures are online and in all the municipalities� Visitors Centers. They�re up to about 10,000 a year on some of them, which really aren�t in the current budget. Nelson said he�d be willing to pay for a rack and then order brochures. Denis said there may be several others added such as handicapped accessible, Wi-Fi Centers, and other topics; it�s driven by requests.

Weddig said there are two �Go Guides� out there now; there are many who wish the DCVB had continued its smaller-sized Go Guide. Coulson felt it has become frustrating for a business owner to have several. Dave Elliot commented that the two entities competing are both members of the Bureau, so it would be hard for the DCVB to compete with a member.

Kufrin asked when the members will start to see the benefit of the new advertising agency PR; Denis said it will be part of the 2010 Strategic Conversation, beginning in the first quarter. There will be a specific plan tied Noise, Inc., will be doing the cover of the Visitor Guide. Kufrin asked if they plan any common themes for inclusion in local communities to help with branding. Denis is starting to see some of that (�M� Magazine) under a banner; however, each municipality still wants its own branding and unique qualities.

Kufrin asked about the timing of the Strategic Conversation, budgeting numbers, etc. Moneypenny�s goal is to send out the budget and plan on September 30 to his Executive Committee; on October 6, he�s doing a presentation to the Board of Directors, which he hopes will be approved on the 13th. On October 21st, he�ll give an abbreviated presentation to members. November 12 is the DCVB�s goal for the Strategic Conversation. They�ll be budgeting flat numbers going into next year but can make alterations if necessary.

Moneypenny said that as soon as the TZC has numbers to give them, they can finalize. Kufrin said we won�t have August numbers until October 10, so that�s when the DCVB will get the numbers. The two-pronged approval is approving the Strategic Conversation and also approving the budget.
Last year, the TZC we had two separate meetings to okay these items. It would mean two meetings in November. Moneypenny said the annual meeting will present the Strategic Conversation on October 21; right after that, it will be sent to the TZC. The TZC November 19th meeting would be for approval. Larson said that, after seeing it, we may not need another meeting beyond the 19th; if there are questions, we�ll add a meeting. Kufrin announced that Dick Skare volunteered to become the fifth member of the Finance Committee after approval today.

Larson asked about the �Kingdom So Delicious� eBrains mailing � what�s the date? Denis said it was mailed right after Labor Day. She�ll let him know the exact date.

Discussion on the Current Comparatible Occupancy Numbers for 2009
Moneypenny asked if the TZC had heard from Sturgeon Bay regarding past room tax figures; Dave Holtz was going to look into getting rough numbers. Kufrin has not and will follow up with an e-mail to Holtz and Benzshawel and a �cc� to Steve McNeil.

Moneypenny said it looks like we�re 3.7% down without June/July adjusted. Stayton said the winter was bad, and the negative press heightened anxiety. The summer has been better. �Flat is the new good� was helpful language in the DCVB newsletter. Kirkland said June/July/August late filings and payments are up compared to earlier in the season; for July alone, she sent out 53 notices of �no report.�

Consideration of Approving Recommendations by Performance Evaluation Committee on Goals for the DCVB
Kufrin said the Performance Committee has met several times with lengthy and educational discussions. He feels once the goals and metrics are approved, the DCVB will have steady guidelines. The time to consider making changes is when the Strategic Conversation is approved in the fall. It should be in conjunction with that marketing plan, not changing tactics every couple months.

The Committee presents a draft at this meeting. The Committee met with a small group of DCVB earlier this week. The yellow highlighted portions are areas the DCVB Executive Committee needs to give its collaboration and determination rather than the TZC. Moneypenny saw the draft this past Tuesday and would like a chance to review it with his staff. He felt the ideas are good but may not be practical or cost effective. Kirkland tried to find communities evaluating the performance of their visitor bureaus, and few groups are monitoring other than Brookfield. Kirkland noted that most of the communities have had room tax many more years than Door County and are comfortable with the quarterly or annual reports they get. Kufrin asked the Commissioners to look over the draft for concerns or questions; next month, Moneypenny and the DCVB will present their opinion.

Nelson felt it was a good process and digesting it for a month will be helpful. Coulson asked if Kufrin wants input beyond what�s listed; yes, we want to make sure it�s a catchall. Coulson felt, ultimately, it doesn�t matter of the room tax money results in more journalists or web hits; it�s only about occupancy and ROI. How are we doing versus other communities? If flat�s the new increase, that tells us how we�re doing against the competition. He didn�t object to seeing the data, but ultimately it�s how good the occupancy. If it�s 67% last year and 69% this year, and if the rest of the state is up 5%, that�s not good; if the rest of the state is down 11%, that�s good. Nelson noted that�s covered on Page 2, second line from the bottom. Kufrin wasn�t sure occupancy is reported by the State for individual destinations; the relative performance of communities by the State�s criteria doesn�t measure the same criteria we look at. Larson said in other communities, there are many variables and asterisks about influences, etc. For example, Coulson said, web hits can be up while occupancy is down. Larson said the delay in collecting is too late and hard to compare. The variety of indicators in the draft will help consolidate our information.

Weddig said we need years of data to determine, but we do need to collect it so that we can look back. We do have to use smaller benchmarks such as website hits until we�re years down the line. Moneypenny said the Wisconsin Innkeepers gives stats. Door County has only 2 or 3 properties listed on Smith Travel Research (now STR Global), so we don�t show up on the radar. Smith�s report includes actual numbers for Milwaukee, Dells, etc. who have many lodgings with Smith Travel.

Stayton agreed with Weddig but she wants to know how important Visitor Bureau membership is to us; Kufrin doesn�t feel it should be a concern unless the budget shows that more of the overall costs of the organization are being shifted to room tax because membership revenue is declining. It�s more of a budget issue than a performance indicator. Moneypenny said the TZC is paying less today than 1� years ago because the 70/30 split has been changed to a 66/34. Kufrin said the goal is to get feedback from the DCVB from the Performance proposal. He asked that Commissions bring questions to the Performance Committee members: Coulson, Nelson, Larson, Kufrin, Holtz, and Skare (who missed a couple meetings). Elliot asked for a quick response. Moneypenny has split up the report to his staff�s areas of expertise. Most of the stats requested are already available but just not reported to the TZC.

Updates from the Compliance Committee and Bill Vande Castle on Specific Enforcement Actions before the Door County Circuit Court
Tice reported that The Barbican�s previous owner has not paid past taxes; Vande Castle estimated the taxes. The previous owner wanted the court to dismiss claims; however, taxes are normally considered payable in bankruptcy situations. Vande Castle is trying to find specific room tax parallels. We would set a precedent for room tax. The previous owner listed the TZC as a creditor, so he admitted to owing the taxes; whether or not he collected it from guests is irrelevant.

Peternell on Washington Island lost his property in foreclosure; he claims he doesn�t have to pay room tax now because he no longer owns it, which is untrue. He has been informed several times from the TZC office, and now Vande Castle has also sent a letter.

The George situation may be going to Vande Castle. Kirkland said Blake George first contacted an agent but then said he�d rent on his own. The agent felt he was trying to skirt the tax. Tice said the attorney will try with a letter, and then go with an audit; it may go to court. It can be a 90 day+ process.

Jon Hanson was supposed to be in court but instead wrote a letter to judge saying he was caught up on all payments; he did not �cc�d Vande Castle. However, that is not the case; he is not caught up. In the interim, he has paid about $2,000 toward late fees and penalties, leaving about $8,000 and accruing. Hanson has filed July 2009 report and tax. He�s trying not to be audited or go to court. Stayton asked if we can put a lien on the property; Tice said we cannot while Hanson�s making attempts; if he stops, there may be other things to do.

Maple Grove continues to be non-cooperative. She has failed to show up in court three times and ignored every letter, so Vande Castle went back to the court. She is now ordered to have all financial records ready for audit by the end of the month. If that doesn�t happen, she�ll be in contempt of court.

Weddig said perhaps when we send out early non-compliant letters, we could add a brief paragraph with (nameless) examples of what has happened, amount of fines. Owners would understand the serious consequences and penalties, even potential jail time. Kufrin said once the Maple Grove and Hanson are resolved, we should issue a press release that recent prosecutions have resulted in X and Y. Goss said it�s important to get the word out; every time we have to go after a non-compliant owner, Vande Castle costs a lot. Coulson said people who do comply every month would feel positive about their own diligence.

Consideration of Approving Recommendations from the Compliance Committee on Policy & Discussion of Updates to the Intergovernmental Agreement and Ordinances re: Compliance
Tice went over the draft, which is been a committee effort over several months. Some have to be mandated by either statute or agreement. We should form a policy first and then work on changing municipality ordinances where they disagree. The Intergovernmental Agreement doesn�t have a full understanding of the penalties. We can form a penalty schedule between 25% and $5,000, whichever is less; in the Agreement, there�s a 10% penalty for failure to pay, which is less than the statute�s 25%, so we should stick with the 25% and correct the Agreement. The $25 late fee is our imposition. It�s a late fee of $25 per month; it accumulates, but at some point does it become fraudulent and instead becomes 50%?

There are 4 main categories of non-compliance: Non-Permitted, and there are two ways that comes about: refusal to become permitted or a new owner who is unaware of the obligation. There�s a minimum $20 penalty to increase up to $100 after the first notification if still not permitted.

The Compliance Committee can determine tax due either a full-blown audit (through volunteering the books or getting a court order, which costs money) or by estimating the taxes with comps in the area, which is a fair tool of estimating. Presently, for The Barbican, we have used an estimate. Stayton felt there are still properties on the Island under the radar; they are not permitted and don�t collect the tax; those are good cases for estimating.

Kufrin asked about permitted vs. non-permitted (pg 3, lines 9-21, additional permit) re: adding Social Security number and Fed/State Sales Tax information. We haven�t monitored WI Department of Revenue business before; will failure of someone to put these items down cause them not to get a permit? Tice stated the extra information will be helpful if we have to start prosecution. We have a confidentiality issue, so we won�t turn them over to the higher authorities, but if they�re breaking the law for us and the rest of the government and if we want intergovernmental help - we need the information. It will alienate some people. Kufrin said if you�re an agent or an accountant, they may not want to give the Social SEcurity number. Goss felt strongly about not giving it. Jeanquart said any business should have a Federal ID number they can list; general consensus that the Federal ID number is logical. However, Weddig said a sales tax number may not be available if it�s a home rental. Tice said for the Federal Tax ID, it�s the proprietor�s Social Security number anyway; if it�s a corporation, it�d be a Federal Tax Number instead.

Kufrin asked if the permit should go on endlessly or be a specific duration; do we want to send out all the renewals at any given time or over a period of the next two or three years send an updated form, a permit renewal. There was a one-year expiration which quickly went by the wayside. Kirkland noted that right now, all permits expire on December 31, 2011, to coincide with the five-year TZC agreement. Tice said that there is a clause, both on the form and on the Internet, that permit holders have to keep their information up to date.

Kufrin said that everyone should give Tice comments on the current draft. Jeanquart appreciated the paragraphs about making it more official, making it more a government mandate. Having a Federal ID number would be important.

On pg, 10, Article 14.8, Tice said the appellate fee of $300 is a Vande Castle suggestion. Tice felt the Compliance Committee should split it among committee members after basic costs. Can we be paid? Nelson reminded that the Intergovernmental Agreement states that Commissioners cannot be compensated.

The penalty of �revoking� a permit for non-compliance states in the ordinance that we will �not reissue� the permit. Vande Castle said it would be difficult to revoke a permit before it has expired. Tice felt a business would simply still stay in business, so it may not be worthwhile.

Weddig said that Vande Castle must ensure everything is defensible in court. How does this compare to other room tax areas that have substantial experience in collecting fines? Kufrin said Sturgeon Bay is a close-by example; it�s his understanding that they never prosecuted anybody, so perhaps other areas are not pursuing it aggressively either. Weddig asked for research to see if court fees and other penalties are reasonable. Tice said as far as prosecuting delinquent tax, we haven�t gained much unless it�s a large corporation.

Weddig noted it�s only $25 for late filing; after that it�s 1% accruing and then 25%. Kirkland will double-check that; it�s a Kerber Rose function now. Cyrus asked if there�s a limit on the fees; Tice said no. The Intergovernmental Agreement and Statute references fines specifically. Tice felt it could be done in three letters; but with varying situations, a canned letter may not work beyond the original contact and first late notice. It makes a difference if the lodging is trying to evade tax or refusing to work with us. The Committee is still hashing out the language, which is being fine-tuned by an attorney. Kufrin reiterated that all Commissioners should contact Tice with comments.

Consideration of Approving Reports and Payables plus Receipts to Date
Nelson moved to pay Kerber Rose reports payables as submitted; LeClair seconded. All ayes.

Appointment of Individual to Finance Committee
Dick Skare volunteered for Finance Committee. Nelson moved to accept his appointment; Coulson seconded. All ayes.

Discussion on the Renewal Process for the Commission�s Liability and Workers Compensation Policy for 2010
Kufrin stated that the TZC has carried League of Wisconsin insurance since the beginning of the organization; if Commissioners are driving to and from a meeting for business, they�re covered for liability under the TZC policy. If there�s an accident, the policy covers up to $500 deductible. That�s a standard municipality policy and costs about $2,000. Two years ago, the TZC discussed making sure all have an opportunity to participate in insurance bids. Should we start with Finance and look for other proposals? Weddig wanted to know if we�d find anything competitive. Kufrin said the TZC doesn�t own anything; it�s E&O and liability. Goss said having worked with the League in Ephraim, she did cost comparisons and, although they varied year to year, they kept coming back with good rates. It�s a good product with good service. Ephraim did solicit proposals in 2007 and went with the League. Cyrus said she knows someone who might be interested in making a contact. Nelson said it�s due diligence to look at other bids every so often; Coulson suggested requesting proposals. The Finance Committee will look at that first and we�ll discuss the subject at the October meeting.

Adjournment
Nelson moved to adjourn; Tice seconded. All ayes. The meeting adjourned at 11:45 a.m.

NEXT MEETING: October 15 at the Gardner Town Hall

Respectfully submitted,

Kathy Kirkland
Administrative Assistant

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