TDA Board Meeting May 27 2015
NEW HANOVER COUNTY TOURISM DEVELOPMENT AUTHORITY
BOARD OF DIRECTORS
MAY 27, 2015
PRESENT: Jonathan Barfield, NHC Commissioner
Bill Blair, Mayor – Wrightsville Beach
Anne Brodsky, Hotel – Kure Beach
Kim Hufham, President/CEO – NHC TDA
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
LeAnn Pierce, Hotel – Carolina Beach
Angela Rhodes – County Restaurants
Bill Saffo, Mayor – City of Wilmington
Lisa Wurtzbacher, New Hanover County Finance Officer
EXCUSED: Mayor Dan Wilcox, Neal Johnson, Chuck Pennington
ABSENT: N/A
STAFF: Jeanette Foster/Administrative Services Manager, Recording
Secretary
Connie Nelson, PR/Communications Director
Shawn Braden, Executive VP of Marketing
Linda Brothers, NHC Finance Department
John Sneed, VP of Sales and Services
VISITORS: Kemp Burpeau, New Hanover County Assistant Attorney
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 Seagrass
Room at the Homewood Suites, Mayfaire.
ITEM #1 – EXCUSED
Mayor Dan Wilcox, Neal Johnson, Chuck Pennington
ITEM #2– MINUTES APPROVAL – MARCH 25, 2015
[Motion made by Mike Keeler, seconded by Mayor Bill Blair and
unanimously approved to accept the March 25, 2015 TDA Board minutes as
read.]
1
ITEM #3 – FINANCIAL REPORT – LISA WURTZBACHER
st
Lisa Wurtzbacher, Authority Treasurer, gave report on 1 3% through April 30,
2015. We are 10 months through the FY or 84%.
st
1 3% expenditures – have spent roughly 83% for the Fiscal Year or $1,453,645.00.
nd
2 3% expenditures are always scued because of the activity funds, but we have
spent $2,118,352 or 69%.
Convention Center expenses – have spent $273,305 or 81% of the budget.
st
Revenues – 1 3% has received approximately 70% of what was budgeted.
ROT – First 3% compared to last fiscal year for July – March – up 11.92% over last
FY for same period of time; calendar year to date compared to last calendar year –
up 11.96%.
nd
2 3%:
Carolina Beach – Fiscal Year comparison – up 13.29% for July – March; calendar
year to date (July – March) – up 12.42%.
Kure Beach – Fiscal Year up 13.05%; calendar year up 29.02%.
Wrightsville Beach Fiscal Year up 8.37%; calendar year up 10.49%.
City of Wilmington – Fiscal Year up 9.57%; calendar year up 6.75%.
Convention Center – July – March FY– up 24.86%; calendar year – up 31.13%.
District U – Fiscal Year up 19.96%; calendar year up 31.19%.
ITEM #4 – REQUESTS FOR FUNDING – KURE BEACH
President/CEO Kim Hufham presented a two-part request from Kure Beach:
The Town of Kure Beach respectfully requests TDA funding in the amount of
$3,300.00 for the 2014 Kure Beach Fantasy Christmas Show. The show,
coordinated by the Kure Beach Volunteer Fire Department consisted of three
performances on the evenings of December 12-14, 2014. It provides family
entertainment for tourists visiting Kure Beach and previous requests have been
approved by the Board since January, 2008.
The Town of Kure Beach respectfully requests TDA funds in the amount of
$8,800.00 for the Pleasure Island Chamber of Commerce Free Summer Concerts
2
held during the summer of 2014 (FY 2014-15.) The six free summer concerts, held
at the Fort Fisher Military Recreation area attract tourists to Kure Beach by
providing an enjoyable and affordable venue. Previous requests have been
approved by the Board since March, 2006.
Total amount requested is $12,100 and funds are available.
[Motion made by Anne Brodsky, seconded by Commissioner Jonathan
Barfield and unanimously accepted to approve the requested funds of
$12,100 for the 2014 Kure Beach Fantasy Christmas Show and the Pleasure
Island Chamber of Commerce Free Summer Concerts.]
ITEM #5 – BUDGET REVIEW FY2015 - 2016 – KIM HUFHAM
President/CEO Kim Hufham presented the highlights of the Fiscal Year 2015-2016
TDA budget which had been reviewed by the Executive Committee and is being
presented in detail to the full TDA Board. The following points are being provided
to summarize comparisons from the prior year.
Total budget presented is $4,333,888 compared to previous year 2014/2015
budget of $4,114,949. New budget represents a 5.32% increase over prior
fiscal year budget.
Revenues are based on 2014/2015 actual collections. First 9 months of
current budget is running a 11.92% increase compared to 4.04% increase
same time last fiscal year. Revenues have shown steady growth over the
th
previous record setting 3 years and we are currently on target to set our 4
consecutive benchmark year in room occupancy collections. Both ADR and
occupancy are showing positive growth as well in 2015.
First 3% budget shows 3.92% increase in expenditures.
First 3% budget continuing to focus on marketing and promotions
representing 74% of budget. Marketing and advertising programs continue
to be based on the strategic direction recommendations working with our
agency as well as visitor research available through the NC Tourism, Film
and Sport Development department.
Areas of Note;
Salaries and Benefits
2% cost of living increase (previous one in 2007/2008.)
o
Merit pool of approximately 1%.
o
Insurance and benefits – 8% average increase.
o
Marketing and Promotions
Contracted Services
o
NC Tourism Coalition
3
Brochures and Publications
o
Visitor Guide will again be offset by ad sales
Meeting Planners Guide – digital
Advertising
o
Continue shift from print to on-line
Education
o
Addition of 1 staff member attending the Simpleview annual
conference
Promotions
o
Hosting SATW in Spring 2016 for FAM tour (annual meeting
in Raleigh for 2016)
Visitor Research – Arivalist
Trade Shows
o
Addition of RCMA
Shift sports marketing shows to District U
Capital Expenditures
Scheduled replacement of 3 PC’s and monitors
o
$1000 contingency
o
District U
Focused on active and vibrant nature of New Hanover County
o
through an integrated campaign – parks, golf, nature trails, etc.
Sports Marketing efforts to promote countywide sports venues and
o
facilities for group business
Kim reviewed total budget for new FY:
st
Projected 1 3% ROT Revenues - $1,820,265; Convention Center Marketing -
nd
$312,780; 2 3% ROT collections - $2,200,843 (includes District U of $180,000.
Total revenues for FY 2015-16 = $4,333,888.
st
1 3% budget for 15/16 = $1,820,265. Breakdown includes Administrative in
amount of $343,607 (19% of budget and 1% increase over last year); $129,416 for
Visitor Information Services (7% of budget and 1% increase); $1,347,242 for
Marketing/Promotions (74% of budget and 2.5% overall increase.)
nd
2 3% ROT for Beaches – MAC Committees recommend budgets for town
approvals.
[Motion made by Mike Keeler, seconded by Mayor Dean Lambeth
and unanimously approved to present the FY 15-16 budget at the June
formal budget adoption meeting.]
4
ITEM #6 – PRESIDENT’S COMMENTS – KIM HUFHAM
Very successful Legislative Day in Raleigh. Our Chairman, Frank Jones,
participated. Representative Ted Davis and Representative Susi Hamilton
were there.
School calendar in good shape for this year. New bill for coming school year
(required 1025 hours instead of a mix of a number of hours and so many
school days. School to start closest Monday to August 26 and close closest
Friday to June 11.)
Film grant fund of $40 million recommended by the House.
Airb&b is an advertising site with no regulations of any kind stipulated on
this. State working with them on collection of sales tax as well as ROT tax.
Marketing plans and year end reports to be presented at the August Board
meeting.
Have 3 new positions filled since Muriel and Mikie have retired. Have
realigned these positions. John Sneed now Vice-President of Sales and
Services; Karen Warren is now our Visitor Services Manager for both
leisure and group. Molly Johnson and Amy Higgins are both Senior Sales
Managers and come to us with very strong backgrounds in sales. Our new
Senior Marketing Manager, Meagan McCarthy with an extensive
background will begin June 1.
ITEM #7– OLD BUSINESS/NEW BUSINESS
Chairman Frank Jones reported one of the things which had been discussed at the
January and March TDA Board meetings was the second 3% holdback policy.
(Kim Hufham stated that Mayor Dan Wilcox is not here for the meeting but is
calling in to participate in discussions. She said By-Laws do dictate he can take part
in discussions, however cannot vote.)
nd
Frank stated that at the January meeting, the beach mayors asked that the 2 3%
holdback policy be tabled for further review by the beach towns. At the March
TDA Board meeting, the beach mayors presented an alternate holdback policy to be
considered. They requested a fund balance of 125% annual marketing budget be
considered for beach towns. Current fund balance is 25%. Proposed an additional
20% holdback policy annually for 5 years that would be cumulative to a total of
125% at the end of the 5 years. Was again tabled until the May meeting.
Frank said a volunteer group of members met with the beach town mayors to
discuss recommendations for the May TDA Board meeting consideration. (Had two
meetings.) Attendance at both meetings included Frank Lewis, Mayor Bill Blair,
Mayor Dean Lambeth, Mayor Dan Wilcox, Jonathan Barfield, Mayor Bill Saffo,
Mike Keeler, Lisa Wurtzbacher, Kim Hufham, Kemp Burpeau. At the first
meeting, the group asked for information on costs of crisis plans for a category 4 or
5
5 storm. In that meeting, wanted to know how much money would be needed to be
held back if we had a crisis. Kim instructed staff work with the agency for how
much money would be needed.
Frank Jones and Kim Hufham presented a recap of the crisis plan presentation as
well as all other information provided to the group (copy attached). It was the
recommendation of the majority of the group to move forward with the additional
8% holdback (33% total annually) with the 8% being cumulative for 6 years.
Question was asked of Mayor Dan Wilcox on how the 73% was determined. He
said it was calculated at 8% per year for 6 years or 48% plus 25% already in fund
balance or a total of 73% which is midway of the original discussion.
Mayor Bill Blair asked if the maximum amount or a lesser amount could be taken
depending on the beach town. Each beach town can individually make a decision on
the amount needed and could hold back no additional if desired.
Lisa Wurtzbacher showed estimated calculations based on marketing budgets for
FY 2014 to include proposed 8% which is the additional above the 25% reserve that
would be held back every year by the beaches. She then did a cumulative figure of
73% in total between the six-year cumulative and the current 25% reserve which
would bring a potential total reserve of $653,969 over six years. Question asked
when the six years would start. Assumption is would start with FY 15-16. Would
have to adjust this year’s budget on what is fully expected.
Further questions on the 8% per year and when it would end, etc. Also discussed
general overview of a Category 4 or 5 hurricane and a hurricane crisis plan. Crisis
plan would include communications, public relations, social media and advertising.
Phase I would be in alignment with what the state does. Phase I would run between
$12,000 and $15,000 for the first month. Phase II would place a bigger emphasis on
public relations where we would be doing story pitches, video, testimonials and
continuing to respond to media inquiries, etc. This budget for the month would run
between $2,500 and $5,000. Phase III would be the biggest spend where you would
have emphasis on paid media strategies which would include leisure broadcast,
content marketing billboards and any existing plans and media spend in the budget
would be replaced with new types of messages that would go out. Suggested budget
for Phase III would be $75,000. Agencies felt $95,000 could cover a crisis plan for
st
our area for a Category 4 or 5 hurricane. The CVB 1 3% budget would pick up a
portion of this.
Some of the Board’s further discussion:
Nicholas Montoya against adding more. Says gives us less money for advertising in
crisis plan. Is not what we should be doing. Says everyone should be working
together. Will start putting us in deeper trouble by making this change.
6
Mayor Dan Wilcox appreciated the time everyone has put in. Would hope that
recommendation would be given serious consideration. Beach towns have to worry
about their crisis of a 4 or 5 hurricane. Thinks this last meeting would support an
8% increase.
Commissioner Jonathan Barfield, Jr. says if marketing funds go down, will affect all
of the hotels involved.
Question was asked if the marketing committees or just the mayors are supporting
this. Anne Brodsky with Kure Beach says their committee is not in support of a
change.
Mayor Bill Saffo says any marketing committee not supporting this should not come
back to the TDA and ask for marketing dollars.
Mayor Dan Wilcox appreciates the MAC committees, but says at the end of the day
it is the governing bodies who are responsible for the problems.
Mayor Bill Blair says the WB MAC committee would have their choice of what they
want to do.
Mayor Dan Wilcox says again that governing bodies are responsible. The group
discussions gave the towns responsibility to do what they need to do.
Mike Keeler noted that he had sat in on the group discussions and does not
remember the dollar amounts as have been shown this evening. He said Carolina
Beach had indicated they were looking at $100,000 and then discussed $150,000.
The amount on the board shows $238,000. Was mentioned that this is due to the
percentages presented for approval.
Mayor Wilcox says has to do what is right for his community.
Mayor Dean Lambeth agrees 100% as this policy has flexibility.
Carl Marshburn says he is a little confused by the whole thing. The TDA has the
responsibility for marketing. The Reserve balance we now have would take care of
this.
Chairman Frank Jones called for a motion.
[Motion made by Commissioner Jonathan Barfield, Jr., seconded by Carl
Marshburn to maintain the fund balance as is of 25%.]
Chairman Jones asked for a show of hands on the motion:
Ayes: Nicholas Montoya, Frank Jones, Mike Keeler, Carl Marshburn,
7
Commissioner Jonathan Barfield, Jr., Angela Rhodes
Nayes: Mayor Bill Blair, Mayor Bill Saffo, Leanne Pierce, Mayor Dean
Lambeth, Anne Brodsky
Motion passed by a vote of 6 to 5.
ITEM #8 – CHAIRMAN’S COMMENTS – FRANK JONES
N/A
Adjourn at 7:00 p.m.
Next Meeting Date: Wednesday, August 26, 2015
______________________________ __________________________
Kim Hufham, President/CEO Angela Rhodes, Secretary
Minutes located in TDA Board Minutes Book XI
8