Boyd reveals ‘confidential’ details of tourism bureau

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A family visting Chattanooga enjoys a moment along the riverfront near the aquarium. (Photo Chattanoogafun.com)

A family visiting Chattanooga enjoys a moment along the riverfront near the aquarium. (Photo Chattanoogafun.com)

Tim Boyd proposes cutting the funding of the Convention & Visitors Bureau largely given by county government of which he is a commissioner. The group has a yearly budget of F$7.2 million, gets F$6.4 million or 84 percent of its cash from the county’s 4 percent room tax, pays the largest single sums to local PR firm Johnson Group (F$1.7 million in 2014), awards top official Bob Doak F$200,000 in pay a year and markets Chattanooga as a destination  in the Southeast. Most tourists come from within 150 miles.

The group is typical of American fascism, the enmixing of government and for-profit corporate interests. Public-private partnerships exist because taxpayers and their representatives in city and county government have no view of the limited nature of civil government, which biblically is coercion and force organized negatively for the suppression of evil and crime.

Operating continually in the short term, civil authority seeks a social and public good by the positive use of violence (taxation), rejecting the benefit that would come from a longer-term voluntarist and free market perspective. A room tax honors the ancient and biblical maxim of taxing aliens and strangers, not sons. But the county opportunistically taxes sons, too. The room tax on visitors is, if anything, corporate welfare in the advertising and marketing arena. It is a form of corruption readily accepted by stakeholders as business as usual.

“Working papers are confidential and cannot be released to the media and the public,” says Tim Boyd, letting David Tulis merely hold the “working papers” while denying him permission to peruse them. (Photo Noogaradio)

“Working papers are confidential and cannot be released to the media and the public,” says commissioner Tim Boyd, letting David Tulis merely hold the “working papers” while denying him permission to peruse them. (Photo Noogaradio)

The CVB controversy also has raised the question of the meaning of the Tennessee open records act, which CVB and county lawyers tell Mr. Boyd creates a “confidentiality” surrounding financial audit reports that is binding on him. The open records confidentiality rules let the state violate the free press provisions of the state constitution in the bill of rights (article 1, section 17). Still, the duties in statute do not apply to the press or members of the public such as citizen Boyd, but record custodians and stewards who are allowed in the exemptions provisions to keep data under lock. They alone are charged with secrecy, and no other.

Made fearful by lawyerly misrepresentations, Mr. Boyd does not divulge the audit documents in our interview Friday.

Instead he does us the service of reporting on them himself. — David Tulis

By Tim Boyd / Hamilton County commissioner

Since the Hamilton County Board of Commissioners enacted Resolution 207-27 on February 2007, CVB has received 100% of Hamilton County’s Hotel/Motel Occupancy Privilege Tax less any debt service monies obligated at the time the resolution was enacted.

The CVB now has a budget exceeding $7 million. This report goes beyond the focus of the County Auditor’s reports of February 22, 2017, released by Jenneth Randall, and June 09, 2016, released by former County Auditor Bill McGriff. The focus of the two auditor’s reports was;

“…to access their (CVB) compliance with the provisions of Hamilton County Government Resolution No. 207-27…”  

This report focuses on how CVB manages millions of dollars of Hamilton County Government funds. Where it spends the money and what policies and procedures CVB follows in spending the people’s money.

Findings

The following facts and findings were discovered within various documents, and financial statements reviewed for this report. There are also findings included from personal interviews with members of the Hamilton County Auditor’s staff and CVB’s staff members.

  1. Per Mr. Edward Dolliver, Vice President of Convention and Group Sales, ”…100% of our Convention and group sales come from the Southeast and 80% of these sales comes from within Tennessee…” 1
  2. Per Tim Morgan, President of Greater Chattanooga Sports and Events Committee, indicated the most needed venue in Hamilton County to attract more sporting events is a “state-of-the-art” track & field Sports Complex with a four multi-purpose fields.1
  3. Bob Doak, CEO of CVB, indicated the vast majority of tourists coming to Chattanooga live within a 150 mile radius of Chattanooga.1
  4. CVB has their own in-house spending policies and does not follow Hamilton County Procurement and Travel Policies.2
  5. CVB headquarters are located on the 18th floor of the Suntrust Building.6
  6. CVB lease on their 18th Floor offices totals $987,808 through 2020.3
  7. CVB moved from a location near the Aquarium to its current location in 2011 at a cost of over $396,000.4
  8. CVB relocated the visitor’s center in 2011 into a space now occupied by the Block at a cost of over $116,000.4
  9. During the years from 2008 – 2015 CVB has received just under $40 million in Hamilton County Government funding via the Hotel/Motel taxes.5
  10. Hotel/Motel funds by “Public Acts of 1980” Resolution No. 180-45, were originally used to service Hamilton County’s portion of debt on the Round House (McKenzie Arena).6
  11. In 1988 Hotel/Motel funds redirected by the Hamilton County Commission to service debt on capital projects such as the Memorial Auditorium, Camp Jordan, Bessie Smith Preservation Hall/Afro-American Heritage Museum, and fund agencies such as the CVB with $800,000.6
  12. During FY2008-2015 The Johnson Group (a local Chattanooga advertising agency) received 39% ($10,753,720) of CVB’s total advertising budget.6
  13. The CVB is noncompliant…” with resolution No. 207-27 concerning “…regular and periodic written reports to the Hamilton County…Board of Commissioners…”7
  14. Hamilton County funding to the Greater Chattanooga Sports and Events Committee via CVB has increased 363% from $85,288 in 2008 to $309,566 in 2015.6
  15. Reported by CVB; Total Revenue = $ 7,271,951, Expenses FY2013 = $ 7,338,553.8
  16. Reported by CVB; Total Revenue = $ 7,554,210, Expenses FY2014 = $ 7,445,032.8
  17. CVB’s top three contractors FY2014; Johnson Group @ $1,756,939, Chattanooga Convention Center @ $466,743, Chattanooga Times Free Press @ $267,146.8
  18. CVB’s largest contributor FY2014; Hamilton County Govt. @ $6,369,065.8
  19. Total compensation; B. Doak, President/CEO, FY2014 = $ 204,152.8
  20. Total compensation; E. Dolliver, VP of Sales, FY 2014 = $ 152,918.8
  21. July 2013 – June 2014 travel destinations of CVB staff included at least forty-one (41) cities with only twelve (12) within the Southeast.4
  22. Examples of travel and entertainment expenses July 2013 – June 20144

02/19/2014 – Santa Monica CA –  Redwood Grill = $ 3,000

05/28/2013 – Miami FL –      Hilton Hotel = $  992

04/13/2014 – Chicago IL –      Hilton hotel = $ 1,545

03/19/2014 – Atlanta GA – Maggianos Italian Rest = $  400.

04/04/2014 – Atlanta GA – Maggianos Italian Rest = $  500.

05/21/2014 – Atlanta GA – Maggianos Italian Rest = $  1,023.

      Spa at the Chattanoogan     = $  1,222.

      Atlanta Braves          = $  6,000

Conf. & Travel Exp, FY2014   = $ 314,6458

Control and accountability

Hamilton County’s Hotel/Motel Occupancy Privilege Tax, better known as The Hotel/Motel Tax, is a 4 % tax levied on the rental of hotel rooms within Hamilton County. These funds belong to the citizens of Hamilton County.

***  In 2007 the Commission entrusted the Chattanooga Area Convention and Visitor’s Bureau (CVB) with the use and management of 100% of these revenues by the enactment of Resolution 207-27. In FY2014 (latest year reviewed for this report) CVB received over 84% of its operating revenue from the Hotel/Motel Tax, an amount of $6,369,065.

As per Resolution 207-27 the CVB is to submit a yearly written report to the Commission outlining the usage of the Hotel/Motel tax. In 2015 the County Auditor reported there were no records of any reports ever being filed by CVB with the County Mayor’s Office, the County Commission Office, or the County’s Finance Department.

The CVB has its own appointed 30+ member Board of (Volunteer) Directors. However it seems the CVB President/CEO spends money at his own discretion. According to the Hamilton County Purchasing Department Director, Ms. Gail Ropo, the CVB has never asked her department to assist in the procurement of any goods or services. This stands in stark contrast to the operating procedures of Hamilton County Government were any purchases of $25,000.00 or more must follow the Hamilton County Procurement procedures and be approved by the Commission.

CVB does not follow Hamilton County Government’s 31 page policy on the use of County credit cards for travel and expenses. In fact charges made during FY2014 by CVB’s staff on the CVB travel card indicate the CVB staff does not even follow its own travel policy, and as reported by the County Auditor, the President/CEO of CVB approves all travel expenses which in FY2014 amounted to over $314,000.

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In 2011 the CVB moved its operations into the 18th floor of the SunTrust Building at a cost of almost $400,000. None of the contracts issued to make this move followed Hamilton County Government policies nor was any of the money spent outlined and approved by the Commission. Beyond the sheer cost of the move being justified (or not), how does one justify or answer the following questions in light of the mission of the CVB;

  • Placing the offices of a visitor’s bureau on the 18th floor of an office building?
  • How many citizens of Hamilton County or tourist will visit these wonderful offices?
  • How does this show good stewardship of the Citizens’ monies?

These and many other questions start to be asked about CVB’s management of our Hotel/Motel Tax revenue especially when one studies their financial information which reveals:

  • Twelve months of travel expenses amounting to over $314,000,
  • CVB’s entire check register for FY2014,
  • Millions of dollars spent without the due process of competitive bidding,
  • Salary increases exceeding 20% in a single year,
  • Tens of thousands of dollars in bonuses for the President and Vice President,
  • $420,885 spent on office furnishings and computers.

All spent with no accountability to the very board of elected officials who entrusted the CVB with all of the millions of tax dollars collected through the Hotel/Motel Tax.

If the CVB was funded with private dollars, earned or donated, there would be no reason for this report. However when any agency is entrusted with the responsibility of managing tax dollars there must be the highest level of accountability and transparency. This does not seem to be the case with the CVB when they are repeatedly asked for copies of the all of their financials by the media and refuse to share the information. Neither the County Auditor’s reports, CVB’s 990 nor the CVB public financial statements indicate how CVB’s staff is managing (or mismanaging) the Citizens’ tax dollars.

Recommendations

Upon review of the documentation listed below;

  • The Hotel/Motel Tax resolutions from 1980 – 2007
  • 252 months of CVB travel expenses (see Attachments #1 &#2)
  • Twelve months of CVB check registers, July 2013 – June 2014
  • Current CVB office space lease contracts
  • Fixed asset report for FY2014

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Subject to all pertinent and/or associated State of Tennessee laws and regulations the following recommendations are made to the Hamilton County Board of Commissioners for consideration.

Resolution 207-27 amendments

The maximum percentage of the Hotel/Motel Tax issued to CVB will not exceed 65% of the total Hotel/Motel tax collected by Hamilton County in one fiscal year and a portion of these funds will be used by CVB to pay the County’s obligated portion of maintaining the Bessie Smith Preservation Hall/Afro-American Heritage Museum.

The balance of the Hotel/Motel tax will be used;

— To service debt on bonds issued for the construction of facilities within Hamilton County which enhance and promote tourism, athletic events, and improvements to County operated (and/or jointly operated with the City of Chattanooga) public parks within Hamilton County.

— To provide funds as may be needed by which to recruit various Sporting, Arts, and/or Cultural events to Hamilton County.

A permanent seat will be added to the CVB Board for the County Commission. The Commission Chairperson may hold the seat or appoint a fellow Commissioner to fill the seat. The County Commission CVB board seat will be held for a term of one year.

CVB will be required to make a minimum of one financial report per year to the County Commission prior to a regularly schedule Commission or Agenda session. The Commission may asked for additional presentations as may be deemed necessary.

Adopt a new resolution requiring any agency receiving $25,000 or more from Hamilton County Government funding is subject to;

All Hamilton County Government procurement and travel policies.

Capital expenses greater than $25,000 must be approved by the board of Commissioners.

All financial documents are subject to the Federal Open Records Laws.

Sources

  1. Meeting with Bob Doak and staff on March 15, 2017.
  2. CVB “Travel” Policy & Procedures Manual.
  3. CVB lease contract between CVB and Market Street Chattanooga, LP.
  4. Documents received from the Hamilton County Auditor’s Office.
  5. Hamilton County Budget documents, fiscal years 2008 – 2015.
  6. CVB Audit Report of February 22, 2017, by Jenneth Randall.
  7. CVB Audit Report of June 09, 2016, by Bill McGriff.
  8. CVB 2014 990 Income Tax Return

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