TDA Board Meeting March 25 2015
NEW HANOVER COUNTY TOURISM DEVELOPMENT AUTHORITY
BOARD OF DIRECTORS
MARCH 25, 2015
PRESENT: Jonathan Barfield, NHC Commissioner
Anne Brodsky, Hotel – Kure Beach
Kim Hufham, President/CEO – NHC TDA
Neal Johnson, County Vacation Rental Property
Frank Jones, Hotel – (150-) Wilmington
Mike Keeler, Hotel – 150 (+) Wilmington
Dean Lambeth, Mayor – Kure Beach
Connie Majure-Rhett – Wilmington Chamber of Commerce
Carl Marshburn, NHC Attraction
Nicolas Montoya, Hotel – (150+) 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: Mayor Bill Blair
ABSENT: N/A
STAFF: Jeanette Foster/Administrative Services Manager, Recording
Secretary
Mikie Wall, Vice-President Sales and Services
Connie Nelson, PR/Communications Director
Karla Thompson, Technology/Systems Manager
Shawn Braden, Executive VP of Marketing
Linda Brothers, NHC Finance Department
VISITORS: Kemp Burpeau, New Hanover County Assistant Attorney
Miriah Hamrick – Lumina News
Noel Fox and A.A. Canoutas – Attorneys for Carolina and
Kure Beaches
Chairman Frank Jones called the meeting of the New Hanover County Tourism
Development Authority Board of Directors to order at 5:30 p.m. in the Lucy B.
Harrell Board Room at the New Hanover County Government Complex.
ITEM #1 – EXCUSED
Mayor Bill Blair
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ITEM #2– MINUTES APPROVAL – JANUARY 28, 2015
[Motion made by Connie Majure-Rhett, seconded by Michael Keeler and
unanimously approved to accept the January 28, 2015 TDA Board minutes
as read.]
ITEM #3 – FINANCIAL REPORT – LISA WURTZBACHER
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Lisa Wurtzbacher, Authority Treasurer, gave report on 1 3% through February
28, 2015. We are 8 months through the FY or 67%.
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1 3% expenditures – have spent roughly 59% or 8% below where we are for the
Fiscal Year.
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2 3% expenditures are always scued because of the activity funds, but we have
spent $752,728 or roughly 25%.
Convention Center expenses – have spent $225,673 or 67% of the budget so they are
right on target.
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Revenues – 1 3% has received approximately 64% or what was budgeted. This
represents 6 months of collections due to the lag that we have.
ROT – First 3% compared to last fiscal year for July – January - $3,026,508 or
12.37% over last FY for same period of time; calendar year to date compared to
last calendar year – up 21.32%.
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2 3%:
Carolina Beach – Fiscal Year comparison – up 13.29% for July – January; calendar
year to date (July – January) – up 44.04%.
Kure Beach – Fiscal Year up 12.09%; calendar year up 61.51%.
Wrightsville Beach Fiscal Yea up 8.34%; calendar year up 17.35%.
City of Wilmington – Fiscal Year up 10.82%; calendar year up 13.21%.
Convention Center – July – January FY– up 24.47%; calendar year – up 47.49%.
District U – Fiscal Year up 19.23%; calendar year up 32.24%.
Experienced increases all across the board.
[Motion made by Anne Brodsky, seconded by Commissioner Jonathan
Barfield and unanimously accepted to approve the financial report as
presented.]
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Lisa advised the Board on the status of our audit contract. We have been using
Martin Starnes for the past several years. Our contract is up with them so had put
out bids for proposals. Seven were received from various audit firms. Of the three
critiqued, Cherry Bekaert was the lowest bid. They are a well -known reputable
firm and have done tourism development authorities across the state. Their
proposal came in at $2,750.00.
[Motion made by Commissioner Jonathan Barfield, seconded by Chuck
Pennington and unanimously approved to accept the audit proposal for
contract with Cherry Bekaert.]
ITEM #4 – REQUESTS FOR FUNDING – CAROLINA, KURE AND
WRIGHTSVILLE BEACHES
President/CEO Kim Hufham presented the requests for funding from Carolina,
Kure and Wrightsville Beaches.
Carolina Beach:
The Town of Carolina Beach respectfully request TDA funds in the amount of
$299,821.15 for expenses incurred for lifeguard salaries and benefits for the period
of April – December, 2014. The Board has approved requests since 2003.
The Town of Carolina Beach respectfully request funds in the amount of $3,500.00
towards the Street Arts Festival on 5/17/14. This is a public event sponsored with
the Island Arts and Cultural Alliance. The TDA Board has approved requests since
2013.
The Town of Carolina Beach respectfully request TDA funds in the amount of
$16,815.00 for the Boardwalk Makeover now known as the CBDI for family
entertainment during the period of July 2014 – October 2014. This includes family
nights music and magic shows. The TDA Board has approved requests since 2008.
Total amount requested is $320,136.15 and funds are available.
[Motion made by Anne Brodsky, seconded by Chuck Pennington and
unanimously accepted to approve the funding requests for Carolina Beach in
the amount of $320,136.15 as presented.]
Kure Beach:
The Town of Kure Beach respectfully requests funding for expenditures for
lifeguard services for the summer of 2014. The requested funds include
expenditures for two budget years (2013-14 and 2014-15.) The TDA has approved
requests since 2006.
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Total amount requested is $173,045.47 and funds are available.
[Motion made by Mayor Dan Wilcox, seconded by Mayor Dean Lambeth
and unanimously accepted to approve the requested funds for lifeguard
services in the amount of $173,045.47.]
Wrightsville Beach:
The Town of Wrightsville Beach respectfully requests TDA funds in the amount of
$29,000 (July 1 – December 31, 2014) to be considered to help fund fireworks,
advertising, public relations and media support associated with the planning and
preparation of the 2014 N.C. Holiday Flotilla (fireworks display - $12,000 and other
expenses - $17,000.00. The TDA has approved requests since 2004.
The Town of Wrightsville Beach respectfully request TDA funding in the amount of
$12,000 to help support the necessity to maintain a public restroom in the hub of the
Wrightsville Beach business area commonly known as the Trolley Stop. The facility
is the only public restroom in the central business area and is critical to supporting
the local tourism industry. The TDA has approved requests since 2005.
The Town of Wrightsville Beach respectfully request TDA funding in the amount of
$377,101 to be considered to support their Ocean Rescue Program during FY 2015.
This service provides comprehensive ocean rescue coverage for nearly four miles of
beach strand and expanded manning of 13 lifeguard stations as well as mobile
coverage and is staffed by 30 fully qualified personnel.. The TDA has approved
requests since 2004.
The Town of Wrightsville Beach respectfully request TDA funding in the amount of
$100,000 to support their Beach Patrol Office function during FY 2015. This service
provides two dedicated Patrol Officers to patrol nearly four miles of beach strand
and attends to the enforcement of ordinances and policies related to the use of parks
and beaches by both residents and visitors to the beaches, etc. that support the
tourism industry. The TDA has approved requests since 2004.
The Town of Wrightsville Beach respectfully request TDA funds in the amount of
$35,000 to help support the cleaning of beach bathhouses and sanitation pick up on
the oceanfront and other tourists related areas from July 1, 2014 through June 30,
2015. The amount includes salaries and benefits for this time period. The TDA has
approved requests since 2007.
Total funds being requested - $553,101.00. Total funds are not all available at this
time and will be paid as they become available and receipts for same are received.
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[Motion made by Chuck Pennington, seconded by Mayor Dan Wilcox and
unanimously approved to accept the funding requests for Wrightsville Beach
in the amount of $553,101.00.]
ITEM #5 – PRESIDENT’S COMMENTS – KIM HUFHAM
President/CEO Kim Hufham gave an update on several issues in the legislature that
we know affect tourism, especially our area as a coastal community:
One of the main ones being closely followed is the school calendar law which has
been in effect since 2004. Currently schools in North Carolina cannot go back
before the first Monday of the week of August 25 and have to dismiss by the week of
June 10. This leaves most of June and August for vacation. To date, 35 bills have
been filed to appeal this. What they want is to give the flexibility back to local
school boards, a lot of which would go back to the first of August. If you look at our
rooms tax collections, August is our second largest month so essentially you are
looking at possibly taking that month away if schools go back to the earlier start
date. In talking with folks in Raleigh, they are hoping to put this in a study
committee. It is pretty much the tourism side against education. Instead of having
the two sides pitted against one another, do a study to have a true impact of schools
going back that early. A lot of these bills are in our major feeder markets. It is very
important we stay on top of this.
On film incentives, there have been two bills filed to date (Senate Bill 193 and House
Bill 171.) that would modify the film grant program and increase the amount.
Currently it is at ten million dollars which goes from January of this year when the
old incentive ran out until June. Would like to get the level back up in Fiscal Year
15-16.
Airbnb is another topic the legislature are discussing. There is an effort moving
forward and legislation could possibly be filed where Airbnb would be required to
be part of a registry. It doesn’t solve some issues, but would at least put them in a
registry where sales tax and occupancy tax would be able to be tracked. Airbnb is a
web site where people go to find this. If they are willing to work with local
communities, or the state of North Carolina itself and form a registry in order for
someone to be on that site, it would help the tax office track them more closely.
Another topic is the sales tax distribution and what affects the counties.
We will participate in our Tourism Legislative Day which will probably take place
in April and we will have an opportunity to go to Raleigh and meet with our
legislators as a tourism industry, followed by a reception that evening.
National Tourism Week will be coming up May 2-10 and our Travel Rally Day will
be Tuesday, May 5. Be on the lookout as we have some exciting things planned.
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In the office itself, we are very busy with strategic planning and budgeting. This is
our time of year where we are getting ready to delve into numbers and where we
will be going for the next fiscal year.
Connie’s department has a very busy month coming up. She has five travel
writers/bloggers coming during the month of April. We’re also very excited to learn
we are going to have a Fox News Team coming here from Cleveland at no cost to
us. This will be great exposure for us.
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We have two employees retiring March 31….Mikie Wall and Muriel Pearson. A
reception is planned for next Monday, to be held at the Wilmington Convention
Center from 4 to 6 p.m. and we hope Board members can come by to wish them
well.
ITEM #6 – OLD BUSINESS/NEW BUSINESS
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Chairman Frank Jones said at the last TDA Board Meeting the 2 3% Holdback
issue through the beach communities was discussed and the beaches determined
they wanted to take the Board’s proposal back to their attorneys (Carolina and
Kure Beaches) to review. That issue is now back on the floor.
President/CEO Kim Hufham indicated she had e-mailed a letter to the Board today
concerning what had been sent to Kemp on the proposal the beaches would like to
make. With this in mind, the floor was turned over to Mayor Dan Wilcox,
spokesperson for the group.
Mayor Wilcox noted that at the last TDA Board meeting, the Board was presented
with a policy on the holdback funds. Did not really want to take it back to the
attorneys, but to the Council to have a discussion with their respective towns about
what their plans would be. He said in all fairness, they had probably done a poor
job in laying out their plans to the CVB for use of the funds so that resulted in the
CVB drafting the policy that was presented at the last meeting. Dan said they have
now countered with a proposed policy and explanation of intent. He said obviously
these are marketing funds. There is no intent of using them for anything but
marketing funds. They do have, especially as coastal communities, an increasing
concern about storm events. They have to make sure there are reserve funds to
keep operating in case of natural disasters when all or most of their revenues are
lost during that time and there would be nothing left the following season not only to
promote the beach towns but to let people know they are back in operation. He said
with the fact that each town has slightly different needs and ideas, the proposal is
that funds would be set aside over a five-year period to be used as reserve funds for
marketing or could be used for other things if there was some very special occasion,
but the purpose is to set them aside to be used in the event of a natural disaster for
marketing. Dan advised the CVB has a 25% reserve that is budgeted each year. It
is not cumulative. They budget it and it gets rolled out at the end of year and is then
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budgeted again for the next year. That 25% would not go very far for the county if
we are hit with a natural disaster. The beaches’ proposal is that if they could retain
up to 20% over the course of five years, that at the end of five years, there would be
a fund equal to 125% of the Marketing budget. The CVB would retain this fund.
Dan mentioned the fact that the four mayors and Kim had met to go over the plan;
that all three beach towns support it and are now asking that the Board support it
as well. The towns think this is a responsible thing to do and the CVB and TDA
have fiduciary responsibilities. He said as town leaders they have the same
responsibilities in case of an event, their towns do not suffer.
Discussion highlights from the Board:
Lisa wanted to know that in terms of the additional 20% the towns are asking to
reserve, is this an additional 20% per year for five years? Per Dan “up to”. At the
end of five years, would be a year’s worth of marketing and then a quarter of a year
from what would be held back.
Frank noted that currently 25% is held back and understands this would be in
addition to that.
Further discussion on how the rollover funds work, etc. Dan advised trying to find
a formula that would give a little bit of flexibility to each of the beach towns.
Commissioner Barfield commented that we need to up our marketing budget; not
decrease it.
Assistant New Hanover County Attorney Kemp Burpeau says this is a policy
decision, not a legal one. Says we know the Board has the fiduciary duties. Notes it
is a matter of how active do we want to be involved in that process in determining
this specific holdback. Says Ms. Foxe, Carolina Beach Attorney, has done a good
job in setting forth the different positions here. The staff had originally proposed
the beach towns would come to the TDA and would requests based on a specific
need, that the TDA would come up with a duration that funds would be spent in the
upcoming fiscal year, or even not in the proposal, subsequent years. The Board
could authorize it in future years if they chose to do so and also determine the
amount to allot. We were proposing the Board have a very active role in this like
you do when you approve tourism related expenditures for a particular purpose.
The one the beach towns has come up with now is a little more automatic in that
they could just tell the TDA they were holding up to 20% and they could do it for
the five year time. We really have two proposals based on how active we want to be
involved in the process in exercising the TDA’s fiduciary duties.
Commissioner Barfield asked what the bottom line is. Lisa said for all three
beaches about $180,000 a year. Lisa said the perspective she was looking at is if you
say you can hold 20% each year, at the end of the five years, there would be a full
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year…one year and a quarter being reserved. Based on the expenditures we had in
2014 would amount to over a million dollars if every beach decided they wanted to
hold back 20%.
Dan asked Ms. Fox (Attorney with Carolina Beach) if she had any comments. She
said that what the beaches are saying is there will be a time when there is going to be
a storm event so the beaches are asking through the TDA to be able to hold these
funds so that when that happens, all of New Hanover County benefits. People come
to New Hanover County for the beaches….not just the beaches, but the beaches are
a compelling reason tourists come. If there is not the ability after a storm event to
market to get people to come to the beaches; to be able to say we are ready for
tourists, the towns are going to suffer for a long time as well as the TDA.
Connie Majure-Rhett asked what special events had been referred to. Mayor
Wilcox said the main purpose of the funds would be for marketing, but he could not
speak for all of the beaches on any special event usage.
Discussion stemming from monies set aside for crisis situations. President/CEO
Kim Hufham says monies are set aside. Because of the budgeted funds we do have,
we can also shift advertising funds and social media, etc. When you review the
budget each year, you see a line item for crisis situations. If not used, it is usually
used in the Spring for additional advertising purposes. We do not let it build up, we
go ahead and spend it.
Carl discussed what is used for marketing now and says it is not enough. Says it
really concerns him and is very sensitive about just discussing beach towns. Says he
looks at us as one community….one marketing area..
Mayor Wilcox again emphasized what they are asking for is reasonable. Says they
have to decide what is in the best interest for their towns, etc.
Following more discussion on what is being asked for, marketing funds, etc., it was
determined we should find out what other TDA’s are doing for reserve marketing
and table this discussion until the May meeting.
[Motion made by Anne Brodsky, seconded by Connie Majure-Rhett and
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unanimously approved to table the 2 3% Hold Back Policy until the next
meeting.]
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It was decided to form a group prior to the May meeting to further discuss the 2
3% Hold Back Policy to bring back to the TDA Board. The group will consist of
Frank Jones, Lisa Wurtzbacher, Kemp Burpeau, Mayors Saffo, Wilcox, Blair and
Lambeth, Michael Keeler, Kim Hufham, Commissioner Jonathan Barfield. Kim
will coordinate setting up of this meeting.
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ITEM #7 – CHAIRMAN’S COMMENTS – FRANK JONES
N/A
Adjourn at 6:25 p.m.
Next Meeting Date: Wednesday, May 27, 2015
______________________________ __________________________
Kim Hufham, President/CEO Angela Rhodes, Secretary
Minutes located in TDA Board Minutes Book XI
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