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 The Monday night vote was the culmination of a discussion that
has been ongoing for the past several weeks regarding accountability
in the Tourism Bureau and also accountability of the Logan County
Alliance, which is currently holding an oversight position over the
Bureau as well as the Lincoln/Logan County Chamber of Commerce.
History
In March of this year, Leslie Hoefle, the wife of Alderman Rick
Hoefle, and former Tourism Bureau Interim Director spoke to the
council about her interpretation of financial reports published by
the LCA that appeared to indicate discrepancies in the financial
records. She at the same time questioned financial reports from the
Bureau, again voicing concerns over expenditures that appeared to be
excessive with no justification as to why.
The city in response voted to request an independent, third party
audit of the books for the LCA, as well as the Bureau. The LCA
denied the request but said they would permit an audit of the
financial records pertaining to the dollars the city had paid them
for economic development. The Tourism Bureau was in the process of
having an independent audit of their books from 2013 through 2015.
Tourism Director Maggie McMurtrey told the city that her council
wanted the city to wait and review the audit currently underway,
then, if they still wanted an additional audit, the Tourism Bureau
would comply.
 In those early discussions at the city council, Tracy Welch had
spoken out about not renewing the upcoming funding agreement with
Tourism because the audits were not finished and the city was not
going to be doing its own audit until they were finished. He said he
would support funding the bureau on a month-to-month basis until the
city was satisfied that the bureau was acting responsibly with the
dollars given it by the city.
Recent developments
At the April meeting of the Logan County Tourism Bureau, that
Tourism Council gave McMurtrey the authority to draft a new funding
agreement between the city and bureau. Permission was given for
McMurtrey to incorporate into the agreement terms and conditions the
city had been asking for regarding reporting and other
accountability issues.
At the Tuesday, May 10th Committee of the Whole meeting of the
Lincoln City Council, McMurtrey delivered that agreement for their
approval.
In the document, she said the bureau was asking the city to fund the
bureau for a six month period. She said that she understood the
city’s hesitancy to enter into a new annual agreement when the
audits were not completed, but was hopeful that all the questions
from the city would be answered within the next six months.
She also included in the agreement a stipulation that the bureau
would submit monthly financial reports to the city, and quarterly
activity reports.
The item was then put on the agenda for the Monday, May 17th
meeting.
Currently
On Monday evening when the council got to this item on the agenda,
Michelle Bauer made the motion to enter into the six-month
agreement. The motion was seconded by Jeff Hoinacki.
The floor was then open for discussion. Todd Mourning spoke first
saying that he wanted to take into consideration the fact that Logan
County is heading into its festival season, which does attract
tourism. The Tourism Bureau’s job is to offer sub- or mini-grants to
various groups that put on these festivals. He said funding for six
months, retroactive to May 1st, would take the Bureau through the
festival season. He was in favor of this plan because it would allow
the Bureau to go forward with assisting in promoting the festival
season.
Welch said that he still had an issue with funding an organization
that had rejected the city’s request for transparency. He said he
also had issues with the marketing plans of the Bureau. He then
commented that he felt that the organization as a whole could stand
alone.
Hoefle says $83,000 is missing from Tourism
Rick Hoefle agreed that the bureau could stand alone. He also noted
from financial records he had in front of him at the time, that
there is $83,000 unaccounted for in the tourism financials.
 Jeff Hoinacki said he agreed with Mourning, that the events were
important and need Tourism's support. He wondered if the events
would still happen if the city did not fund Tourism. McMurtrey was
in the gallery for the vote. Hoinacki asked her to come forward and
address that question.
McMurtrey told the council that a few of the upcoming events had
already requested and received money from the bureau, but she felt
that any yet to seek funding, might have to be denied without the
support of the city.
She said that the choices in the budget would be sub-grants versus
paying the director. She said then if the bureau wanted to try and
keep a full-time director while this is all worked out, they would
have to suspend the sub-grants. She said if became an issue of “if
we can’t keep ourselves afloat, how are we going to help keep others
afloat.”
She said that not being able to help these organizations would not
be good for the community. She also noted that the fundraising
efforts for the Tropics sign would also suffer.
Parrott says there is no money missing
Steve Parrott spoke up as a member of the City Council appointed to
the Tourism Bureau. He noted that he had been on the Tourism Council
for approximately eight months. In that time, he had seen that
“Maggie when she came in, came into probably the perfect storm.”
He reviewed the issues including the Tourism Bureau's tie to the LCA
and Chamber, the lack of a full-time director for an extended
period, the change of multiple interim directors and more.
Parrott said that the audits are underway, and one was completed and
turned over to the city. A second audit is finished in its draft
form and will be finalized soon. It would then also be turned over
to the city. He said he had seen the audit, and there was no money
missing from the books as Hoefle had suggested.
He went on to say that he felt McMurtrey was doing a good job for
the Bureau, and that the best way, though not perfect way, to know
this was by looking at the hotel/motel taxes being generated. He
said he was of the understanding that tax had risen by about four
percent over the last year.
Parrott said he understood the concerns of his fellow aldermen, but
he felt that if the city and the bureau need to make changes, those
changes need to be clearly defined. He said that the City Council
should be able to make those changes, but in the meantime, he
doesn’t want to take funding away from the bureau, he felt there was
a need to keep things going until decisions were made.
 He concluded, “I know we have issues with the Alliance and some
other entities, I guess tourism does fall with that, but I don’t
think it is Tourism's fault necessarily for some of the difficulties
we’ve seen.”
Hoefle says his issue is with the LCA
McMurtrey also commented that she heard the concerns and understood
them. But she countered that she has repeatedly invited aldermen to
come to her office and talk to her directly about their concerns,
and none of them have done so. She said that was the primary reason
she stipulated in the new agreement that she would be coming to them
monthly.
She also noted that while the city has concerns, no one has come to
her and said, “This is what we want.” McMurtrey also noted that the
Bureau did not say “no” to the additional audit, they said “not now”
because their own audit was still underway. She said the Bureau is
willing to permit the third party audit after their audits are
completed.
Hoefle then asked about the missing $83,000. He said that in the
reports McMurtrey presented it shows that on December 31st, 2014
there was an $83,000 carry over, that disappeared on January 1st,
2015. He wanted to know where that money went.
McMurtrey said she could look into that, and see why it didn’t carry
over in the accounting software.
Hoefle said he would put it point blank, “We have issues with the
Alliance, I don’t want tourism under the Alliance umbrella. I find
that it is not so much you, as them, that I have trouble with. It’s
like ‘hide the money, we won’t give you an audit,” they are trying
to bully us into doing things, and I would like to see tourism on
its own.”
McMurtrey said that she understood, but the tourism bureau had its
own governing board that made its decisions.
Hoefle asked, “Do you have your own checkbook.” McMurtrey said
‘yes.” Bauer also commented that the Bureau also does business with
a different bank than the Chamber/Alliance.
Parrott asked if the 30 percent of the CEO salary that is paid by
the Tourism Bureau could be taken out. McMurtrey said it might be
possible, that the Tourism Council would have to discuss and decide
on that. Parrott wondered if the CEO could be excluded from having
oversight of the Bureau. McMurtrey said she didn’t know how that was
set up exactly, but she did know that it was the LCA that created
the new tourism bureau entity.
[to top of second column] |
Welch identifies his issue with tourism is really the LCA
Welch commented, “I think what clouds Tourism is that they fall under the LCA
umbrella. I’ll state the obvious; the Logan County Alliance gave us a
stipulation that if we wanted our money returned, and we had to enter into an
agreement with them. They didn’t address us directly, they addressed us through
the media, and through an email to chamber members. They also, in my opinion,
took some shots at some aldermen that sit on the council as well. I’ll tell you,
I agree with you that Tourism could be molded into something great. I just can’t
support it underneath the Alliance. It hasn’t been stated tonight, but they (LCA)
do have the power to supersede the tourism board.”
McMurtrey said that she didn’t believe the LCA supersedes all of the decisions
of the Bureau. She said if there were questions regarding property, perhaps so,
but for the decisions the bureau makes regarding advancing tourism, the Tourism
Bureau Council is the governing body.
McMurtrey also commented that the added value of being part of the combined
organization of the LCA, Chamber, and Tourism is the shared staff. She noted
that she shared the expense of the staff as well as the office space and
overhead costs with the other two organizations, making it easier for her to
afford to manage the Bureau properly. She said without that three-way division
of costs, she wasn’t sure the Tourism Bureau could afford to pay those costs.
Welch commented that the Bureau had run for more than 30 years as a stand-alone
organization and it did just fine.
McMurtrey said it had not been run in the same manner it is now. She felt many
of the things the Bureau hopes to accomplish would go to the wayside. She said
that even finding space would be an issue, noting the Bureau pays $300 a month
for rent. She said she didn’t think the bureau would find its own space to
occupy for that dollar amount.
City Administrator Clay Johnson inquired about the status of the current audit
process. McMurtrey reported that earlier in the evening the Bureau Council had
reviewed the draft of the second year of the ongoing audit. The bureau had some
questions for the auditors. She said some of the items discussed in the audit
report were not clearly stated, and the council was requesting that the auditor
re-write their comments to make them more clear and precise.
Johnson attempted to come to a compromise. He asked if the city council agreed
to fund the Bureau for three months instead of six at this time, would the
Tourism Bureau go along with it? McMurtrey said she was felt they would.
Hoefle suggests taking tourism away from the Logan County Alliance
Hoefle returned to the mention of the $300 per month rent. He said that in the
2015 year-end report, it showed that the Bureau had paid more than $7,000 for
rent to the LCA. McMurtrey said that was an error. She noted that the LCA/Chamber/Tourism
bookkeeper Tina Simpson and herself had reviewed the agreement between the three
entities and realized that the wrong amount was being charged for space costs.
McMurtrey said that had been corrected and the Tourism Bureau would be
reimbursed for the overage. Hoefle noted, “That is just another reason to get
out from under the Alliance that they are over-charging on rent.” He went on to
say the use of money was the root of a lot of the questions about the Alliance.”
After some discussion regarding the Tropics sign fundraisers, Mourning brought
the conversation back to the topic and saying he felt that it was important that
the city move forward with Johnson’s suggestion, and on this night, award the
Tourism Bureau at least three months-worth of its needed dollars.
However, it had been mentioned by McMurtrey earlier that the Bureau had worked
on establishing a reserve cash plan and had said they needed to have $50,000 on
hand to cover three months worth of expenses. Welch drew on that comment and
said the Tourism already had enough money to operate three months, and they
could use that while the situations are being sorted out. McMurtrey said she
didn’t know that the tourism council would go along with that if they were not
given any expectation that funding would resume. She said she didn’t know if
they would think it was worth it to keep the employees on the payroll.
Hoefle asked if the city were to take the Tourism Bureau away from the LCA and
bring it back to the city was that something they could do. Johnson said, in
theory, yes. Hoefle said if they worked quickly, the city could accomplish that
before the Bureau expended its reserve and then the Bureau could continue on
under city governance.
Mayor Marty Neitzel commented that such a task could not be done in a short
period. She noted, “You have no idea how long this can take, not from us, but
from the people we have to go to.”
Parrott said he felt, as a Tourism Council member he would feel more comfortable
if the city went to the three-month funding plan, then if the desired results
have not been accomplished the Bureau could then go into its reserve cash for an
additional three months.
Bauer also noted that if the city was going to take the Bureau, she wasn’t sure
it was a good idea for them to direct the Bureau to deplete its reserve funds.
She said that wasn’t good business. She said she would go along with Parrott’s
suggestion to fund three months and then go into the reserve cash.
McMurtrey also noted that she had no idea how that would all work legally. There
are questions about who owns the 501c3 that the bureau operates under as well as
the name. Hoefle said the Bureau could take back the name of Abraham Lincoln
Tourism Bureau, but McMurtrey said she was almost certain it could not do that,
again because of ownership issues.
Hoefle said that as far as a motion for the night was concerned, he would go
along with the three-month funding plan providing the motion stated that at the
end of the three months the city would officially take ownership or control of
the bureau. Johnson said he hoped that was long enough to accomplish the task.
Welch commented that he felt McMurtrey personally was doing great work for the
bureau, but he feels that the city must take a new direction and get clear of
the LCA umbrella. He added that he wanted the contingency tied to the funding
agreement that the city would take charge of Tourism.
Parrott also commented that if there were some truth to the LCA having control
over the Tourism Bureau, it would raise the question of who actually owns the
$50,000 reserve. He noted that money might not be available if the intent is to
take the bureau out from under the LCA umbrella.
Hoefle asks for an amended motion
Hoefle called for an amended motion. He wanted the motion to say the city would
fund the current Bureau structure for three months while City Attorney Blinn
Bates and Johnson did the leg work to get the control of the bureau away from
the LCA, and absorb the Bureau into the city governance.
Because a motion had already been made and seconded, Hoinacki needed to rescind
his second, which he did.
Then it was up to Bauer to amend her original motion. However, she said she was
not willing to include the order to Bates and Johnson as a part of the motion.
She said it was not being responsible to say this was definitely what was going
to be done until the Bates and Johnson had time to research the feasibility of
the takeover.
Bauer noted that the discussions held at the council meeting on this evening
made it clear what the intent of the city was, but she didn’t want to tie their
hands with a motion. She added that she would amend the motion to support the
Tourism Bureau for the next three months, and stop there.
Neitzel made one last comment saying that she hoped that the decision of the
council did not cost the Bureau some very good people, but Hoefle countered that
people can always be replaced.
The motion was made by Bauer and seconded again by Hoinacki, and the vote was
taken. Because the language regarding taking the Tourism Bureau away from the
LCA was removed, Hoefle and Welch voted “no,” as did Jonie Tibbs. Bauer,
Hoinacki, Horn, Mourning and Parrott all voted “yes.”
With the affirmative vote, the Tourism Bureau will receive payments from the
city that are generated from the hotel/motel tax revenue for the full months of
May, June, and July, with plans to have a definitive plan for the future of
tourism in Lincoln by the first of August.
[Nila Smith] |
