TDA Board Meeting March 26 2014
NEW HANOVER COUNTY TOURISM DEVELOPMENT AUTHORITY
BOARD OF DIRECTORS
March 26, 2014
PRESENT: Commissioner Jonathan Barfield, NHC Commissioners
Bill Blair, Mayor – Town of Wrightsville Beach
Anne E. Brodsky, Motel Owner – Kure Beach
Kim Hufham, President/CEO – NHC TDA
Neal Johnson – County Vacation Rental Property
Frank Jones, (Hotels -150-) – Wilmington
Michael Keeler, (Hotel – 150+) - Wilmington
Dean Lambeth, Mayor – Town of Kure Beach
Connie Majure-Rhett – Wilmington Chamber of Commerce
Carl Marshburn – County Attraction
Nicolas Montoya, (Hotels -150 rooms+) – Wrightsville Beach
Chuck Pennington – County Bed and Breakfast
LeAnn Pierce, Hotel – Carolina Beach
Angela Rhodes – County Restaurants
Bill Saffo, Mayor – City of Wilmington
Dan Wilcox, Mayor – Town of Carolina Beach
Lisa Wurtzbacher, New Hanover County Finance Officer
EXCUSED: N/A
STAFF: Jeanette Foster/Administrative Services Manager, Recording
Secretary
Shawn Braden, Executive Vice-President of Marketing
Karla Thompson, Technology/Systems Manager
Mikie Wall, Vice-President Sales and Services
Connie Nelson, PR/Communications Director
Linda Brothers, NHC Financial Analyst
GUESTS: Kemp Burpeau, NHC Assistant Attorney
Tim Owens, Wrightsville Beach Town Manager
Jim Hobbs, Hospitality Alliance of NC, Raleigh, NC
Cole Dittmer, Lumina News
Ted Davis, NC House of Representatives
Mary Baggett Martin, Blockade Runner Resort Hotel
Emilie Swearingen, Kure Beach Council
Jessica Medina, Courtyard by Marriott
Bob McKoy, Network Real Estate
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Chairman Carl Marshburn called the meeting of the New Hanover County
Tourism Development Authority Board to order at 5:35 p.m. at the Lucie Harrell
Conference Room (#601) at the New Hanover County Government Complex.
ITEM #1 – EXCUSED – N/A
ITEM #2 – MINUTES APPROVAL – FEBRUARY 5, 2014
[Motion made by Anne Brodsky, seconded by Mayor Dean Lambeth and
unanimously accepted to approve the February 5, 2014 TDA Board minutes
as read.]
ITEM #3 – FINANCIALS/ROT REPORT – LISA WURTZBACHER
New Hanover County Finance Officer Lisa Wurtzbacher reported on the first 8
months of expenditures for the first 3%. Budget is 1.7 million and as of now,
$1,144,206 or 69% has been spent. This breaks down to $860,248 in Marketing and
Promotion; $78,679 in Visitor Information and $205, 275 in Administration expense.
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2 3% expenditures have a budget of 2.5 million. As of now, $946,275 spent or
37%. This amount includes Carolina, Kure and Wrightsville Beaches.
Convention Center - $316,419 budgeted with 65% spent.
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Revenues for 1 3%: $1.7 budgeted with actual amount through February of
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$1,001,573 or 59%. 2 3% - $1,920,948 budgeted with actual amount of $1,252,387
or 65% received.
City of Wilmington – total received through February - $2,555,709 or 56%.
ROT Comparisons (July 2013 – January 2014:)
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1 3%: Fiscal Year compared to last FY – 4.23% increase; calendar year (January
only) - -6.35%. (This same format will apply for the following information).
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2 3%:
Carolina Beach – 5.43% increase FY to date; calendar year –30.18%.
Kure Beach – 8.65% increase FY to date: calendar year - +21.14%.
Wrightsville Beach – 4.87% increase FY to date; calendar year - +4.76%.
City of Wilmington – 1.91% increase FY to date; calendar year – (-) 0.40%.
Convention Center – 3.66 increase FY to date; calendar year – (-) 22.04%.
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[Motion made by Commissioner Jonathan Barfield, seconded by Angela
Rhodes to accept the financial report as presented.]
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ITEM #4 – 2 3% ROT PRESENTATION – KIM HUFHAM
President/CEO Kim Hufham had been asked at the last TDA Board meeting
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(February 5, 2014) to put together some facts concerning the ROT and also the 2
3% marketing fund as well as the potential impact if some of the marketing dollars
are no longer a part of the budget.
In presenting an overview of the New Hanover County Room Occupancy Tax
Distribution, 6% ROT is county wide for all of New Hanover County and then it is
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broken down into two parts which consists of a 1 3% and a 2 3%. Under the first
3%, 60% less the convention center district goes to the sand fund. The CVB
receives 40% of the dollars which makes up the CVB’s county wide marketing
budget which we administer. The convention center receives all the funds within the
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convention center district (bridge to bridge – 4 street to the river.) The 2 3%
distribution point of collection includes Carolina, Kure and Wrightsville Beaches
which goes back to the three beach towns via the TDA. It is split 50-50 (50% for
promotion and marketing and 50% for tourism-related activities.
Kim gave an explanation of the 2012-2013 ROT distribution using a graph of total
collections and the percentage each group received. Total collections equaled
$8,788,961. Of that amount, beach erosion received 29%; tourism (CVB) 18%;
Carolina Beach Marketing and Activities 8%; Kure Beach Marketing and Activities
4% ;Wrightsville Beach 12%; Wilmington-Convention Center – 29%.
Current marketing budgets (actual amounts used for marketing) include:
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1 3% CVB $1,709,812
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2 3% - Marketing/Promotions (does not include roll over amounts)
Carolina Beach $ 312,188
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Kure Beach $ 137,091
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Wrightsville Beach $ 443,861
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Total 2 3% Marketing/Promotions $ 893,140
Total ROT Marketing $$$ $2,602,952
This represents 29.6% of total ROT collections.
Kim prepared CVB budget comparisons ranging from $37 million for Myrtle
Beach, Charleston – $11 million, Outer Banks – $5,841,128, Crystal Coast -
$2,353,000, Wilmington and Beaches - $1,709,812, Brunswick County - $1,236,575,
plus the three New Hanover County Beaches.
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Kim discussed the leverage we can achieve with our combined budget in media
planning and placement, account management, strategic planning, research,
advertising creative, online management, public relations/social media, fulfillment,
images and video, etc.
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Marketing programs for the beaches – 2 3% budgets: Able to do individual
web/mobile sites/hosting/databases/content development/domains management. In
addition, seasonal web site landing pages, mobile site special offers and promotional
messages, social media sites, content calendars and network seasonal messages,
advertising creative development, content/copy writing, print and online media
campaigns, visitors guide eSpecials development and distribution (ranges from six
to eight per destination), sweepstakes through VisitNC.com, supporting PPC
campaigns and search engineer optimization of land page and web and mobile sites.
Challenges in reduction of leverage will affect CVB cost of doing business; reduction
of administrative revenue to CVB budget; CVB staffing; budget/planning cycles –
beginning of February each year; agency contracts that are based on annual fees;
media placements; marketing continuity such as mobile and websites.
As it now stands, for every $1 invested in tourism marketing, $17 is returned to a
destination in North Carolina.
Kim reviewed the Occupancy Tax Guidelines. The NC Travel and Tourism
Coalition has a policy statement for legislation authorizing local occupancy taxes.
Many of the principles contained in its statement are similar to the ones established
by the House Finance subcommittee in 1993. Based upon this work, the House
Finance Committee looks for uniform provisions in the occupancy tax bills it
considers.
In May 2013, the North Carolina Travel and Tourism Coalition passed a resolution
supporting a modification to the Occupancy Tax Guidelines to allow local
governments in coastal counties to allocate up to 50% of occupancy proceeds for
Beach Nourishment, so long as all remaining proceeds are used for tourism
promotion and provided the use of occupancy tax proceeds for Beach Nourishment
is limited by either a statutory cap or sunset provision.
[Frank Jones made a motion and seconded by Chuck Pennington to support
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keeping the current room occupancy tax 2 3% legislation and distribution
as stated in House Bill 1707 with 50% for tourism marketing and 50% for
tourism related activities (which includes beach renourishment for each
beach town.)]
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Discussion:
Mayor Dan Wilcox said that recently the three beach towns had entered into a
resolution requesting flexibility in the 2nd 3% ROT to use for beach renourishment.
There is a possibility that in coming years federal funds could go away. This would
affect State funding as well. 100% of the beach renourishment expense could be on
the county and the beaches and that is a substantial amount of money. Says they
are looking at around $8 million in the next cycle for Carolina Beach. This is
something that is critical.
He said they look at the beaches as our main tourist generator. Understands that
advertising is important. All the marketing in the world is not going to help us if we
don’t have beaches for people to come to. We are in a situation now where we have
written resolutions and are bringing them to the TDA hoping to be helped with this
situation until we can get our heads together and come up with a more long-term
revenue source to sustain our beach renourishment. He knew Kim talked about
those programs going away, but said they’re not looking to take all of that money.
They’re looking for some flexibility for each beach town. Each beach town has a
little different situation. In Carolina Beach’s situation, looking to use about
$100,000 a year of that money marketing programs would have to be restructured.
Probably a lot of items will not be affected with regard to buying power.
Dan indicated they had a mayors’ meeting recently and discussed this and some
possibilities about some long term solutions, but they are not going to happen for
awhile. They have two years to come up with funding for next nourishment cycle
and are all scrambling. Don’t know if they are going to have to pull back on
lifeguards which would not help tourism. Going to have to make some difficult
decisions that one way or another are just as valuable as marketing dollars. It is a
bigger issue than what they’d like to be dealing with. There is no way the beaches
can shoulder this cost. What they are asking for would not take care of it all, it
would certainly help. Wants to have a discussion and answer anyone’s questions
and concerns if at all possible.
Mayor Dean Lambeth: Cannot put the expense of beach renourishment on
property owners because they are taxed enough as it is. Need a portion of this
money because the federal funds are not there and not going to be in place during
this administration so we have got to prepare ourselves for the worse.
Frank Jones: Asked what other things are being looked at besides asking for
$100,000 from marketing funds?
Mayor Dan Wilcox: Said $100,000 a year is $300,000 when going to renourish.
They’re looking to generate some money from parking revenues and will have to
put a line item in the budget. Beaches are looking at everything. They are at the
end of this beach renourishment cycle which complicates it a little more because
coming right behind local beaches are ten other coastal towns in the same situation.
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Long term situations are being looked at for all of these areas; however, for the
short term going to look for money every place they can. Can only put so much on
the backs of the citizens. Beaches are a county and state asset. From Carolina
Beach’s perspective, will have to decide if they are going to be able to afford
lifeguards. What other services will they be able to offer. $100,000 for beach
renourishment out of the $300,000 is less damaging than secondary marketing
because beaches are already under the county’s umbrella. It is less damaging than
not having lifeguards or other elements in place when visitors come.
Frank Jones: Looking at us and Brunswick County, if $300,000 is taken out of the
budget, we are down where they are. They don’t have lifeguards. They don’t have
a CVB to operate. If we take that money away, they’ll have the same amount of
marketing funds we have. Have you thought of taking out some of the money used
for lifeguards or something along those lines?
Mayor Dan Wilcox: It’s all the same pot for the beaches. If it hits the news that our
beaches do not have lifeguards, thinks that is going to do a lot more damage than
reducing marketing. Trying to find the area that is going to cause the least amount
of problems.
Commissioner Jonathan Barfield: Wanted to know when property taxes were last
increased. (Was told between two and five years ago.) He said the immediate
problem is the revenue problem. Said any smart business person would never cut
the marketing budget. He further discussed marketing and went on to say he has
been a proponent of increasing the marketing dollars. Would be in favor of raising
the ROT tax to 7 or 8% and compete with Myrtle Beach. People will still go with it
due to the amenities available. He encouraged the beaches to gage their business
communities, number one, because this would affect those individuals who are
coming there to set up shop or with a small tourist season, if they see a cut in the
budget, they are not going to come back. Gage the citizens also to see if this is truly
what they want. He indicated people move to the beaches because they want that
lifestyle. The Commissioner also said he is a proponent of the county helping put
sand on the beaches, but doesn’t think this is an option.
Mayor Dan Wilcox said this is a beach town and trying to maintain it; however
Mother Nature comes and takes it away. That can’t be planned for. Marketing is
important, he said, but putting the whole burden on the backs of the Carolina Beach
citizens is unreasonable. Says they’ll shut down.
Commissioner Barfield said the subject of future funding had been discussed during
previous administrations and he thought the beaches would have been planning for
this to fruition.
Mayor Wilcox says the hotels are collecting their fair share and that the current
percentage of ROT is sufficient. Another option to explore could be a prepared food
and beverage tax which would create a substantial revenue source. At this time
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looking at short term assistance until creative minds can come together to come up
with solutions. Not only looking at things such as F&B tax, but wants to get
together with other beach communities up and down the coast who are having the
same problems. Perhaps in this way can all work with legislators in coming up with
some funding.
Mike Keeler said he understood what is being said but doesn’t think that is anyway
of getting business without marketing. Says his property generates a great deal of
ROT for the city, but projecting ahead to July, knows that money is not going to be
there from them. It just isn’t there this year. He says we are going to have a more
serious problem if we don’t do something different because we are going to have to
cut this budget in a year because the revenue will not be there. Definitely concerned
with the future.
Carl Marshburn says the TDA is about tourism and is here to market and promote.
Figures show we are vastly underfunded compared to other markets we are up
against. One thing that has always held us back is lack of good marketing funds and
one of the reasons we are underfunded for marketing is the lion’s share of the
room’s tax has always gone into renourishment; therefore feels that tourism is
contributing to beach renourishment in a big way. For us to cut marketing dollars
out cuts beach marketing dollars which are important as well. Carl said from a
tourism standpoint, he can’t support this.
Mayor Dean Lambeth indicated they have one of the best lifeguard systems there is,
but still underfunded in that. Business owners are wanting more money taken out
of TDA marketing for lifeguards. If lifeguards are taken away, it will be on the
TDA.
Mayor Bill Blair stated that Wrightsville Beach is putting their fair share in a sand
fund but it is not enough. Although he gets it with the marketing issues, if the
beaches have to come up with a couple of million dollars over 3 years, it is just not
going to happen. Said if it comes down to the Board not thinking the beaches aren’t
that important, we can try sales tax, food tax. Agrees with other mayors that the
Board needs to give a little flexibility until a long term solution can be determined.
Mike Keeler doesn’t think there is anybody here that doesn’t value the beaches.
Beaches are very important, but the solution needs to be how we can help without
hurting something else. The more tourists that visit, the more revenue we have and
the more revenue we have, the more can be put in the budget.
Mayor Lambeth says the money is needed now and the TDA was the only place they
saw they could get it short term.
Lisa Wurtzbacher made a comment from a county administrative perspective
indicating they would have problems supporting something like this as would rather
see some holistic approach The County has been exploring increasing the ROT and
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have run some models to show the effect. Says it is not a solution that would happen
in six months, but is definitely being looked at in a holistic approach rather than
just trying to piece mill here and there.
Comments followed on what possibilities there are short term.
Kemp Burpeau says he understands the beaches are currently looking for an
interim solution. This is a local act that has enabling legislation. It indicates what
to use each pot of money for; if someone wants to change it, need to go to the
General Assembly and ask for a local act for it to be modified. Kemp gave some
examples which also includes beach renourisment which intends to give the
Authority discretion to use the tourism-related expenditures to include beach
renourishment but expressly did not include any reference when they talked about
travel and tourism and expressly talked about marketing. Tax laws have to be
strictly construed and this is the way the General Assembly has indicated how to
spend the money. Kemp sees no interim change without a local act authorizing
same.
Mayor Wilcox advised the beaches are not asking the TDA to authorize anything;
only asking for support. They realize it has to go to the General Assembly.
Mayor Bill Saffo said the beach mayors along with him and Ted Davis as well as
Kim Hufham have discussed the issues the beaches are having. He indicated from a
temporary perspective, his Council discussed helping with dredging of Carolina
Beach Inlet and starting to create some discussion among all of the citizens. Is
getting calls from citizens already as to why this is being done when never done
before. Says he has concerns about taking a portion of TDA funds when in a year
or two may have a new administration wanting to take all of the TDA funds. Says
he realizes there are concerns about raising taxes. He has the same issues with the
City. If this is a stop gap temporary measure, how much should be looked at? Is it
the TDA that should just be included in this discussion or should it be a broader
discussion with the entire community which is where this is as an infrastructure
issue. If it is going to be temporary, how temporary is it going to be? How much
money is being talked about in the beaches’ perspective budgets and for how many
years? Really want to support the beaches, but TDA needs to know answers to these
questions. Thinks this would be a much better discussion to have. We all want to
help. The beaches are very important to all of us.
Further discussion on a temporary measure and the hurdles we are facing.
Other comments: This year is not going to be the same year as we’ve had; we’re
already underfunded as it is. All properties are already hurting; will the TDA come
up with solutions? Everyone is in this together. Need to come up with
recommendations on what can be done. Everyone needs to be involved in this
process.
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After sufficient discussion, Chairman Carl Marshburn called for a vote and asked
Frank Jones to repeat the motion.
[Motion to support keeping the current room occupancy
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tax 2 3% legislation and distribution as stated in House Bill 1707 with 50%
for tourism marketing and 50% for tourism-related activities (which
includes beach renourishment for each beach town.)]
Chairman Marshburn asked for a paper vote, but Board preferred a show of hands.
Ayes: Frank Jones, Chuck Pennington, Neal Johnson, Michael Keeler, Connie
Majure-Rhett, Nicholas Montoya, Jonathan Barfield, Angela Rhodes, Carl
Marshburn.
Nayes: Mayor Bill Blair, Mayor Dean Lambeth, Mayor Dan Wilcox, Mayor Bill
Saffo, LeAnn Pierce, Anne Brodsky.
Motion passed with a 9 to 6 vote. Resolution will now be written to this affect.
ITEM #5– REQUESTS FOR FUNDING FOR CAROLINA, KURE AND
WRIGHTSVILLE BEACHES – KIM HUFHAM
CAROLINA BEACH
The Town of Carolina Beach respectfully requests TDA funds in the amount
of $188,563.07 for expenses incurred for lifeguard salaries and benefits for
the period of July 2013 – December 2013. Lifeguards are on duty 7 days a
week during the tourist season.
[Motion made by Commissioner Jonathan Barfield, seconded by Anne
Brodsky and unanimously accepted to approve the TDA funds in the
amount of $188,563.07 for lifeguard salaries and benefits for July
2013 – December 2013.]
The Town of Carolina Beach respectfully requests funding in the amount of
$77,800.00 to the Chamber of Commerce to support 2012-2013 events such as
the Beach Music Festival, the Chowder Cook Off, Seafood Blues and Jazz
Festival, fireworks, etc.
[Motion made by LeAnn Pierce, seconded by Frank Jones and
unanimously accepted to approve TDA funds in the amount of
$77,800.00 to support the 2012-2013 Chamber of Commerce events
such as the Beach Music Festival, the Chowder Cook Off, Seafood
Blues and Jazz Festival, fireworks, etc.]
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The Town of Carolina Beach respectfully requests TDA funds in the amount
of $54,004.07 for the purchase of lights along Lake Park Boulevard (April
2011) and installation of lights on Lake Park Boulevard (May 2011.)
Breakdown: $42,579.00 for purchase; $11,425.07 for installation.)
Chuck Pennington stated he has issues with this request and its relevancy to
tourism. Frank Jones indicated this is not tourism-related. After some
further discussion,
[Mayor Dan Wilcox, Carolina Beach, asked that this item be tabled
until he has further information for the TDA.]
Funds tally of $266,363.07 are available for the two requests have been approved
and funds are available.
KURE BEACH
The Town of Kure Beach respectfully requests TDA funds in the amount of
$3,300.00 for the 2013 Kure Beach Fantasy Christmas Show. The show,
coordinated by the Kure Beach Volunteer Fire Department held two
performances on the evenings of December 13 and December 15, 2013. This
annual event provides family entertainment for tourists visiting Kure Beach.
The show includes singing, dancing and holiday-related stories.
[Motion made by Commissioner Jonathan Barfield, seconded by
Chuck Pennington and unanimously accepted to approve funding in
the amount of $3,300.00 for the 2013 Kure Beach Fantasy Christmas
Show.]
The total requested amount of TDA funds in the amount of $3,300.00 are not
available at this time. Reimbursement will be remitted upon receipt of ROT funds.
WRIGHTSVILLE BEACH
The Town of Wrightsville Beach respectfully request TDA funding in the
amount of $54,847.16 to support their Beach Patrol Officer function during a
portion of FY July 1, 2013 – December 31, 2013. This service provides two
dedicated officers to patrol nearly four miles of beach strand and attends to
the enforcement of ordinances and policies related to the use of
parks/beaches by both residents and tourists.
[Motion made by Mayor Bill Saffo, seconded by Chuck Pennington
and unanimously accepted to approve funding in the amount of
$54,847.16 to support Wrightsville Beach’s Patrol Officer function.
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The Town of Wrightsville Beach respectfully request TDA funding in the
amount of $17,157.47 to help support the cleaning of beach bathhouses and
sanitation pick up on the oceanfront and other tourist-related areas from 7/1
– 12/31/13. The amount includes salary and benefits for the hours in which
duties are performed.
[Motion made by Mayor Bill Saffo, seconded by Michael Keeler and
unanimously accepted to approve funding in the amount of $17,157.47
to support the cleaning of the beach bathhouses and sanitation pick
up on the oceanfront and other tourist-related areas.]
The Town of Wrightsville Beach respectfully request TDA funding in the
amount of $203,674.87 to support the Ocean Rescue Program during 7/1/13
to 12/31/13. This service provides comprehensive ocean rescue coverage for
nearly four miles of beach strand and expanded manning for 13 lifeguard
stations as well as mobile coverage. This service is staffed by 30 fully
qualified personnel. The sum includes salary and associated operational
costs for the Ocean Rescue Program.
[Motion made by Connie Majure-Rhett, seconded by Commissioner
Jonathan Barfield and unanimously accepted to approve funding in
the amount of $265,433.24 to support the Ocean Rescue Program
during 7/1/13 – 12/31/13.]
The total amount of funding requested is $337,437.87 and funds are
available.
Note: The original amount of $447,553.00 was requested on March 5, 2014,
but upon review of the documentation, the amounts included for FY 12/13
had already been paid and the corrected amounts are as shown above.
ITEM #6 – PRESIDENT’S COMMENTS – KIM HUFHAM
National Tourism Week is May 3-11, 2014.
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On April 21 will be on the County Commissioners agenda to
formally announce National Tourism Week.
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Will have an Industry Breakfast on May 6 . Will be rolling out new
marketing initiatives with a focus on family and friends.
WilmingtonCivilWar150.com – Special section on Wilmington and Beaches
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website – 150 anniversary of the end of the Civil War. This was recently
launched.
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Successful TRAC program w/ NCTFSD – over 80 industry partners
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attended. Largest attendance to date for program by NC TFSD.
Upcoming Media Events include:
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NC Media Mission – Washington, DC – in April.
Canadian media and tour operator FAM – in June in conjunction
with US Open.
Point North Magazine – Editor visit in April.
Possible Hollywood East FAM – take place in early May.
Upcoming Sales Events:
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National Association of Sports Commissions.
Society of Government Meeting Planners.
Visit to NC Inquiry Division – 800-VISITNC
Marketing:
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Working on strategic plans and budget for 3 beach towns and
destination.
Spring campaigns.
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Satellite Information Centers will open for the season on April 1: Riverfront,
Carolina/Kure Beaches and Wrightsville Beach.
Joint presentation with the Wilmington Convention Center to Wilmington City
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Council on April 15.
ITEM #7– OLD BUSINESS/NEW BUSINESS
Commissioner Jonathan Barfield mentioned the Wells Fargo Championship Golf
Tournament to be held here in 2017 and how it will put our area on the map.
ITEM #8 – CHAIRMAN’S COMMENTS – CARL MARSHBURN
N/A
Adjourn at 6:55 p.m.
Next Meeting Date: Wednesday, May 28, 2014
______________________________ __________________________
Kim Hufham, President/CEO Chuck Pennington, Secretary
Minutes located in TDA Board Minutes Book XI
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