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HomeMy Public PortalAbout08-05-2019 Minutes Tourism Board Regular MeetingPage 1 of 7 Approved Minutes Tourism Board 6:30 p.m. Aug. 5, 2019 Town Hall Annex Board Meeting Room, 105 E. Corbin St. Present: Chair Mary Catherine McKee, Mark Bateman, Matt Hughes, Barry Hupp, Tommy Stann, Jeff Strickler and Kim Tesoro Absent: Billy Maupin Staff: Economic Development Planner Shannan Campbell and Public Information Specialist Cheryl Sadgrove Guests: Sarah DeGennaro, Mauri Douglas, Virginia Ferguson, David Hays and Steve Peck 1. Call to order Chair Mary Catherine McKee called the meeting to order at 6:36 p.m. Economic Development Planner Shannan Campbell confirmed the presence of a quorum. 2. Agenda changes and approval The agenda stood as presented. 3. Minutes review and approval Minutes from regular meeting on June 3, 2019 Motion: Commissioner Matt Hughes moved approval of both sets of minutes. Member Barry Hupp seconded. Vote: Unanimous 4. Action items A. Update: Burwell School Financial Report Campbell stated that because of an ongoing investigation of possible fiduciary fraud and the departure of Burwell School’s staff that she had not forwarded the contract for FY20 for signatures by the Tourism Board Chair and Vice Chair or the Historic Hillsborough Commission, which owns the site and provides maintenance and programming there. She indicated that the FY19 contract period was closed and paid in full, but that she was not comfortable continuing with the contracting process for FY20 without consideration from the board. Campbell said the Tourism Board could decide to move forward with the contract or ask for more information. No decision needed to be made this evening, she said, but the Tourism Board should give some feedback and direction as to whether or not they were planning to continue to contract with Burwell School and under what terms. Steve Peck, chair of the Historic Hillsborough Commission, addressed the board. Peck reviewed the commission’s mission statement and reviewed that the commissioners of the Historic Hillsborough Commission are appointed by the North Carolina governor. He noted that the commission is required to have at least 25 commissioners. He added that several commissioners were in the audience this evening. Page 2 of 7 Peck said the Tourism Board has been a big contributor to the commission’s work and upkeep at the site and the board’s financial support is critical to keep the doors open. Peck said the Burwell School Historic Site operates with one bank account, one PayPal account and a debit card. The chair and treasurer have the authority to sign checks, but they relied on staff to provide the hard numbers. Peck said those in the chair and treasurer positions have failed to ask for the hard numbers for years. He said he became the chair last fall. Larceny was suspected once the commission set up online banking in June. He said he needed to be careful about what he says at this time for legal reasons. The commission is assessing financial losses, and the most recent director is no longer working for the commission. He said some details are in the packet he provided to the board, but he would mostly like to talk about what the commission is doing going forward. Peck said in July the commission hired an accounting firm, Blackman & Sloop. Online banking enables commission officers and the accounting firm to see where money is going. He said the commission plans to change officers in October and hire staff in the new year. Staff would no longer have financial responsibility at Burwell School. Blackman & Sloop, an accounting firm, would provide all monthly financial reports. Peck said commissioners have organized several events for the rest of the summer and fall. He said the commissioners held a successful internal fundraiser on July 25. Peck said volunteers and commissioners have kept the Burwell School Historic Site open, except for two weeks immediately after the larceny was discovered. Peck asked the board to sign the FY20 contract to keep the doors open. Peck said many people come to town to visit the site. He noted he had passed out an article on embezzlement. He said the article helped the commissioners see they are not alone in their losses and how they can do a better job of following the money. Peck said there is a criminal investigation underway, so he needs to be careful not to answer certain questions. When asked if the commission anticipates recovering any of the missing money, Peck said he does not think so. McKee asked when the commission would seek applications for a new director. Peck said Blackman & Sloop thinks it will have a report by Aug. 25 that the commission will then turn over to the authorities. Peck thinks it will be fall before the commission advertises for a new director. The commission wants more time to figure out exactly what it wants staff responsibilities to be. Peck said the commission terms are six years, and some have been commissioners for 12 years, so there are commissioners who have a lot of knowledge about how to run the place and hold events. Hughes asked if the commission has spoken with the North Carolina Department of Natural and Cultural Resources about this situation. Peck said that a commissioner had spoken with Deputy Secretary Kevin Cherry and that Cherry said the state did not not need to be involved in the investigation. The commission will have to make an annual report to that department. Hughes said he had spoken with Secretary Susi Hamilton, who did not know about it. Peck said the commission notified Cherry soon after the money was discovered to be missing. Member Kim Tesoro asked if there is a timeline of how things are supposed to progress moving forward. Peck said the plan is to get the internal audit, continue with the criminal investigation, and keep the site open. Campbell said the commission received all of its contracted funds for FY19, but she has not signed the FY20 Page 3 of 7 contract or written any checks to the Burwell School since the June larceny discovery. Campbell asked if the commission can still meet the scope of work for services laid out in the FY20 contract as it was presented by previous staff in the Spring. Peck said yes and several are really critical to the site, especially the Revolutionary War Living History Day. Hughes said not signing the contract for FY20 is not an option, but he thinks the commission needs to receive the audit, lay out steps for meeting the scope of services, and submit to the Tourism Board a budget and actuals on a quarterly basis. Hughes said the Tourism Board wants to be good stewards of the prepared food and beverage tax. Tesoro said the board does not know if the same amount of money is needed now. Also, the Tourism Board needs to specify what the quarterly report from contract partners should look like. It should answer whether the terms of service have been met. Campbell said the former director at Burwell never sent her the final Exhibit A- Scope of Work, which she needed to get signatures on the FY20 contract as well. She suggested that Peck review the draft Exhibit A she had sent the director and make revisions according to the plan that the commission has now that the staff is gone. McKee asked the commission to resubmit Exhibit A with plans, events, names of who would be organizing each event and how the plans and events fit with the budgeted amount. Virginia Ferguson, secretary of the Historic Hillsborough Commission, addressed the board. Ferguson said commissioners felt angry and extremely disappointed that larceny had been committed. She said four commissioners donated money to cover a summer employee position. Ferguson said Blackman & Sloop is probably one of the best accounting firms for nonprofits, and the company has an insurance and fraud division. She said the accounting firm is assisting the commissioners in putting accounting principles in place to prevent future occurrences. The commissioners are working together to raise funds. She said the commissioners have welcomed visitors from many states while operating the site Wednesday through Sunday. She said the commissioners are embarrassed but determined for the Burwell School to shine. Member Jeff Strickler said that the commissioners should be forgiving of themselves and that it sounds like they have put appropriate safeguards in place. He agrees that the Burwell School is a treasure. He confirmed with Campbell that the contract was with the Burwell School and not the former director. He said if the commission can live up to the scope of terms and the budget, then nothing has changed and the contract should move forward. If the staffing plan needs to change, then there is a mechanism to come back to this board with a revised budget. Member Tommy Stann said it would be a disservice to the taxpayers to pass the contract at the first meeting after learning about the embezzlement investigation. He indicated that the commission needed to thoughtfully review there financial management procedures and revise the Exhibit A- Scope of Services and budget and come back to the board. McKee would prefer to see a revised budget. Tesoro said the overall sentiment of the Tourism Board is to support Burwell School. Changing the staffing is a major piece of the budget. Hughes told Peck and Ferguson that usually a nonprofit organization would not hire the same firm to keep its accounts and do the auditing. Page 4 of 7 McKee said contracts moving forward should probably have an audit every two years or so. It was noted that there will be an agenda item at the Sept. 4 meeting discussion this as a requirement for FY21. Peck asked for more direction. Campbell said she can go through Exhibit A with Peck. She said some of the numbers are not right as it is, and she never received a finalized version from the former director. Hughes said the Tourism Board wants to make sure that this contract is something the commission can execute and that the numbers work out. Strickler asked whether the Burwell School would be able to financially withstand more time with no contract and payments from the Tourism Board. Peck said the commission could wait until Sept. 4. If the contract was delayed well into end of year, it could be a challenge. Tourism Board money keeps the doors open. When asked, Campbell said the contract was for $26,000 and the monies were mostly dedicated to staff salaries. There was brief discussion that the budget needs to consider staffing. Motion: Tesoro moved to table this item until Sept. 4 when Burwell School could return with an updated Exhibit A-Scope of Work and an updated budget. Bateman seconded. Vote: Unanimous B. Nash Dash Event Organizer Expenses Reimbursement Request Campbell reviewed that the organizers were seeking reimbursement of $280.63, which was spent on an advertisement in INDY weekly and flyers for the event. She indicated that she had not issued the check/payment yet to the event organizers because the Town Board of Commissioners had not approved the event, so there were not any funds to get back from the organizers to go to the Tourism Board. Tesoro asked whether the organizers had spent any additional money of their own on the event. Campbell did not know. There was brief discussion that this would have been the second year this event had been held and it had been approved the first year. For that reason, some board members felt the cost should be reimbursed because the organizers expected the Hillsborough Board of Commissioners would approve the road closure again. There was brief discussion about setting a precedent of reimbursing expenses for a cancelled event. It was noted that there will be an agenda item at the Sept. 4 meeting discussing this. It was noted that the Tourism Board had committed $2,164.66 for this event before the event received approval from the Board of Commissioners for the street closure. There was brief discussion that the Tourism Board needs to put caveats in place for event organizers that expenditures will not be reimbursed for cancelled events. It was acknowledged that the reimbursement request was fairly small and that the board may be far less likely to approve the reimbursement if thousands of dollars had been spent. Campbell reviewed the timeline of approvals and expenditures. The Tourism Board approved the funds for the event on March 4. The expenses were incurred March 26 and 27. The Board of Commissioners disapproved the Page 5 of 7 road closure on April 8, less than a month before the event. Motion: Stann moved to reimburse the requested $280.63 for unique circumstances. He added that moving forward it needs to be clear to applicants that if any money is spent before all approvals are obtained, then the Tourism Board will not reimburse those expenses. Bateman seconded. Discussion: Campbell was directed to tell the organizers that this is the only reimbursement they could expect. Vote: Unanimous McKee noted that a discussion about the reimbursement policy would be added to the Sept. 4 agenda. C. Set visitors guide subcommittee meeting to review draft Hughes volunteered to serve on this subcommittee. A tentative date to review the draft was set for late August. D. Approve FY19 Audit Contract Motion: Tesoro moved to approve the audit contract. McKee seconded. Vote: Unanimous 5. Discussion items A. Merger Conversation Campbell said the Alliance for Historic Hillsborough and the Orange County Historical Museum had held some discussions about a merger. She said the idea in the board packet is a draft idea that includes merging those two entities with the Burwell School Historic Site, as well. She indicated that these were only ideas to start discussion and that nothing was final or decided. McKee said the draft job descriptions are not based on current staff. She said the intention was to have someone who enjoys the communications role to work on communications responsibilities for all three entities. It was noted that a site manager for each entity would be responsible for event planning. Strickler added that the Alliance is open to the idea but feels that the other organizations would need to drive the discussion. Hughes said there is interest in merging among museum board members. McKee said because the Burwell School has a commission appointed by the state, perhaps a merger should start with the Alliance and Museum, but that all three could benefit from merging if the merger resulted in more efficiency and more successful organizations. When asked what the action item could be, Campbell offered to put together a meeting with all three nonprofit organizations to continue merger discussions. Peck said from his position as chair of the Historic Hillsborough Commission, the staff proposal for merging is interesting. He noted that the Burwell School offers opportunity in that it has a bigger building and more land than the others. He does not think it would be difficult to dissolve the Historic Hillsborough Commission and added it is worth considering all the options. Hughes agreed with Peck that the state lays out a way to dissolve the commission if the commission wishes that to happen. Sarah DeGennaro, executive director of the Alliance for Historic Hillsborough, said it would be helpful to talk about what the entire group wants to accomplish, which will help inform the merger discussion. Page 6 of 7 It was agreed that leadership of each nonprofit organization’s governing boards would be invited to meet with Campbell to hold discussions. B. Contract Partner 4th Quarter Reports 1. Hillsborough Arts Council David Hays, co-chair of the River Park Concert committee of the Hillsborough Arts Council, gave the council’s report. Hays reviewed that the Last Fridays event was canceled in April due to storms. The May event was cut short due to weather. The June event had very good weather and adequate attendance. Hays said the number of vendors paying for booths at Last Fridays events has increased. Expenses include more than $900 in ads spent in FY19. The council is focusing on marketing. Hays reported that the focus of the ArtWalk is to draw new art buyers to downtown instead of just foot traffic through the galleries. The council has increased advertising and is discussing options to expand reach. Hays said that plans are underway for the next Handmade Parade. Hughes asked if the Arts Council is audited regularly. Hays said that has been discussed recently. He said that the insurance company conducts an audit and that the council would be putting more safeguards into place. 2. Orange County Historical Museum Mauri Douglas introduced herself. She has been working for just over two months on development for the museum. She reported that visitors increased by about 15% in the fourth quarter for a total of 1,321 visitors. Visitors included more than 100 people from other countries. She reported the volunteer hours and a significant increase in social media reach as well as an increase in website visitation this quarter. She said working on the paint-by-number banner to be displayed at Last Fridays was popular. She said the toy exhibit was drawing young women and children. She added that the museum is working on benefits for those who choose to join the museum at a VIP membership status. 3. Burwell School Historic Site Peck said he did not have social media reports for the fourth quarter because the Burwell School’s computers were damaged. Social media is fully functioning now. He said there were many major events in March and April. The commission’s major fundraiser did well, Peck said, and there are more fundraisers planned for fall. C. 2019 Hillsborough Holiday Parade Tesoro said the Hillsborough/Orange County Chamber of Commerce has been organizing the parade for at least 35 years. She has tried to make adjustments to please the business owners, but the parade really is more of a community event than a benefit to the businesses. To that end, the chamber is requesting $7,161 for 154 hours of work that the Chamber of Commerce puts into the parade via man hours. Tesoro said there is interest in proposing a contract partnership between the chamber and the Tourism Board for the parade in future years. McKee said that the money to cover it would have to come from the Tourism Board’s fund balance and that amounts greater than $5,000 have to be approved by the Board of Commissioners. Campbell said there is $6,483 in the Tourism Board’s special projects and partnerships fund, but yes, that the Town Board must approve unbudgeted expenditures over $5,000. Additionally, funding over $5,000 isn’t permitted as a Special Project/Partnership project under the current guidelines for the Tourism Board. There was brief discussion that the parade is a positive event for the Hillsborough community and a tourism draw. Page 7 of 7 Tesoro noted that generally the Tourism Board pays for staffing of contract partnerships but not for grants. She offered to restructure the request for specific costs. However, in addition to staff organizing the parade, the other significant cost is advertising. She said the chamber’s advertising dollars would go further than the Tourism Board’s because of deals the chamber has with members. Campbell said she and Tesoro have talked about whether the town could take over organizing the parade, but Campbell does not think the town has staff with enough hours to designate for the parade. She also is not sure if the Town Board would be willing to take that on at this point for FY20. Tesoro said she could see hiring someone for a quarter to manage this parade. Motion: Strickler moved to authorize that $4,999.00 be spent from the Special Projects and Partnerships Fund to be given to the chamber to organize the parade. Hughes seconded. Vote: Unanimous The board requested to talk about future ways to organize the parade in January for FY21. 6. Monthly reports and comments A. Alliance for Historic Hillsborough Director and Programs Report B. Visitors Center Communications Report C. Tourism Board Staff Report and Chapel Hill/Orange County Visitors Bureau updates D. Tourism Board member comments and updates Reports were distributed in packets. No oral reports were given. There were no questions or comments. Campbell noted the next meeting would be 6:15 p.m. Sept. 4. in the adjacent board conference room. 7. Adjournment Motion: McKee adjourned the meeting at 8:53 p.m. Vote: Unanimous