Tourism group gets its $150K bailout
Reluctant council grants forward funding of VCVB
The Valdez City Council voted to grant the request from the Valdez Convention and Visitors Bureau (VCVB) to forward fund the organization $153,000 from its 2012 budget to pay off overdue debts and continue operations until the end of December, 2011.
“Shuttering the doors right now isn’t the answer,” council member Steve McCann said after some fellow council members suggested the agency should be closed or bailed out for a lesser amount of cash until the organization’s board of directors could give detailed answers as to how the VCVB got into such deep financial trouble in the first place and concrete policies are instituted to ensure the situation doesn’t repeat itself in the future.
Two weeks ago, members of the VCVB board met with the city council for a special work session to outline the organization’s troubles. The board revealed that it had fired its executive director in October after it became apparent the organization was not in shape for a scheduled audit and that financial reports made to the all-volunteer board by the director had not been accurate.
While detailed financial information had yet to be sorted and accounted for, Colleen Stephens, the board’s vice-president, told council that much of the debt came from fines and additional fees accumulated when the back payroll taxes and other financial obligations had not been met in a timely fashion.
The council came to a consensus during the early November work session to forward fund the organization $153,000 from its 2012 budget to pay off its debts and keep the doors open through the end of the year – but under tight conditions. The board said it would manage the VCVB without an executive director, pay off debts and tighten the belt on 2012 operations.
The council was slated to approve the agreed upon forward funding Monday night, but some members expressed concerns that there may not be enough oversight in place to ensure funds would be properly dispersed. Council members Joe Prax and Alan Sorum also wanted to know exactly what happened to the organization’s finances.
“The problem is, we don’t have enough info,” Prax said, but gave a thumbs up for approving funding to pay off the organizations debts right away. “The IRS isn’t going to get any more friendly.”
Sorum had proposed funding only $60,000 until a solid reorganization plan – with oversight policies – was in place.
“I want some reassurance some thinking has gone into it,” he said. Sorum also worried the matter might fall through the cracks in the board’s pledge to provide oversight in its finances.
“I too am very interested in the full story,” Hozey said, “There’s still some detective work” to be done to find out exactly how the finances got to where they are.
In the meantime, Hozey and Stephens said all checks cut by the organization will require Hozey’s approval until a city committee can be formed and answers provided to how the crisis came about.
“We’ll get that information,” Hozey said. “We may not like the answers,” but we need to know.
Valdez Star photo
VCVB VP Colleen Stephens appeared before the Valdez City Council, hoping to convince some reluctant members to pass a resolution to authorize $153,000 in emergency funding for the agency after financial mismanagement by its former executive director.
The VCVB operates the town’s visitor center and acts as a conduit between businesses, tourists and tour operators. It also publishes a visitors guide, represents Valdez at tourism related conventions and generally markets Valdez as a tourist destination. It is primarily funded through the city’s bed tax and as such is required to submit yearly audits to the city. It had not done for a number of years and last year the Valdez City Council directed city manager John Hozey to withhold funding for the organization until it produced clean audits for years’ past.
It produced one of two promised audits last year, and council periodically directed Hozey to disperse limited funding for critical operations. The role of Dave Peterson, former VCVB executive director who was let go before the second audit was called off, is unclear. The board had Valdez lawyer Mike Franciosi act as a consultant when discussing the executive director during the early November work session with council.
“There will be a formal report when we get this done,” Hozey said.