HomeMy WebLinkAbout2024-06-24 - Agendas - FinalFayetteville Advertising and
Promotion Commission
June 24th 2024
Location: Fayetteville Town Center, 15 W. Mountain Street
Commissioners:
Staff:
Chrissy Sanderson, Chair, Tourism & Hospitality Representative
Katherine Kinney, Tourism & Hospitality Representative
Todd Martin, Tourism & Hospitality Representative
Elvis Moya, Tourism & Hospitality Representative
Andrew Prysby, Commissioner at-large
Sarah Bunch, City Council Representative
Mike Wiederkehr, City Council Representative
Molly Rawn, CEO
I. Call to order at 2:00 p.m.
II. Old Business
Agenda
A. Review and approval of May minutes.
III. New Business
A. CEO Report. Molly Rawn. An executive overview of the previous month.
B. Financial Report. Jennifer Walker, Vice President of Finance.
C. 2023 Audit Presentation. Cynthia Burns, CPA with Forvis Mazars.
D. Marketing Report. Sarah King, VP of Marketing and Communications and
Anne Davis, Director of Marketing with Outright present quarterly
marketing updates.
E. Vote. Scissor Lifts Purchase, Fayetteville Town Center.
Staff proposes the commission authorize the CEO to accept the quote
from Hugg & Hall and spend up to $36,3000 on the purchase two scissor
lifts. Memo and quote attached.
F. Additions to the agenda may be added upon request from a majority of the
commissioners.
IV. Adjourn
Fayetteville Advertising and Promotion Commission
Minutes May 20, 2024
Fayetteville Town Center
Commissioners
Present:
Commissioners
Absent:
Staff:
Todd Martin, Tourism & Hospitality Representative
Elvis Moya, Tourism & Hospitality Representative
Mike Wiederkehr, City Council Representative
Katherine Kinney, Tourism & Hospitality Representative
Sarah Bunch, City Council Representative
Andrew Prysby, Commissioner at-large
Chair Chrissy Sanderson
Molly Rawn, CEO Jennifer Walker, VP of Finance,
I. Commissioner Martin, standing in for Chair Sanderson, called the meeting to order at
2:00 pm and declared a quorum.
II. Old Business
A. Commissioner Martin presented the April minutes for approval with
Commissioner Wiederkehr making a motion which Commissioner Moya
seconded to approve the minutes as presented.
III. New Business
A. CEO Report
Rawn began by sharing that Experience Fayetteville and Tina Archer Cope
received recognition as a Patriotic Employer, through the Employer Support of
the Guard and Reserve, a program of the United States Office of the Secretary
of Defense. Our staff member, Sergeant Dell Hall nominated our organization.
Thanks to both Tina and Dell for this honor.
Rawn just returned from Chicago with Arkansas Tourism for a new partnership.
We took a small group of Arkansas tourist professionals to Chicago and met with
approximately 100 professionals in the tourism field learn about Arkansas
tourism.
Congrats to Megan Oswald who was formally Event Services Coordinator II, she
is now our Event Manager with the town center. We are appreciative of Madison
Hurley who assumed a position at the library.
Rawn stated that HMR collections are down which could be partially correlated to
the city rolling out a new online collections and reporting system that became
mandatory to use in April which has led to some of our HMR partners reporting
late.
Overall, our HMR revenue is down 5%. We certainly hope with such a busy April
with so many events such as the solar eclipse, UA track and more, our June
HMR revenue will reflect that.
The decrease in HMR is one of the reasons we are bringing a budget revision to
you today; we do not expect to bring another budget revision to you this year but
are prepared to do so if needed.
Commissioner Moya asked about comparison from the 2023 Joe Martin stage
race in late April to same time this year. Rawn said she’d have that information
in a few weeks allowing her to make that comparison.
Our sales team has been very busy prospecting new business and Tina Archer
Cope just returned from Sports ETA with 40 appointments. Julie Pennington did
a great job with the ARNIGP conference, hosted at the Town Center with
participants staying at both the Graduate and Staybridge.
Our Marketing team has been very busy, just finishing up a video shoot with
Outright. April was busy with 494 events on the Experience Fayetteville
calendar.
The new landing page for arkansasrazorbacks.com is now live and we will start
tracking its metrics.
The town center hosted 27 events since last meeting including two weeks of
Fayetteville High School for AP testing.
AC Day, our marketing coordinator for the town center has developed a “zero
waste” digital stamp that clients can put on their marketing materials to cross
promote our sustainability work.
Rawn reported on the Strawberry Festival which was a huge success. She gave
a big thank you to Kelly, Chloe and Ellen for creating such a great event and
involving so many organizations. Rawn thanked the commission for allowing us
to invest in a downtown coalition. Commissioner Martin said DFC has really
knocked it out of the park with two large events, i.e. Oktoberfest and Strawberry
Festival. It was asked if an attendance count was available and Rawn said no,
there was not an estimate yet. Commissioner Moya stated that he thought
merchandise would be a good addition next year.
Commissioner Martin asked if we could elaborate on the online HMR payment
system the city of Fayetteville has implemented. VP of Finance Walker said that
at the time of reporting, one third of the HMR partners had not filed. When those
businesses are factored in, we should not see such a dramatic decrease with
collections.
Rawn said that we appreciate being able to work with the finance team at the city
and will be talking with Sarah King to see how we can communicate information
about the new online system to our HMR partners.
B. Financial Report
VP Walker stated that the April financials were in the agenda packets. The
target budget for both expenses and revenue for April is 33%. With total revenue
YTD at $1,723,302 we are 5% below our target.
Total expenses are $1,881,570 or 30%, we are 3% under budget.
HMR tax collections are 11% below the seasonally adjusted budget, we
anticipate that this number will rebound as businesses become adept to the new
online reporting system the city of Fayetteville has introduced.
The balance sheet for April shows $4.8 million dollars in cash and investments
and the unearned revenue for the town center is $318,000 for 2024 events.
C. Vote. Budget Revision
CEO Rawn began with noting some key changes in the budget revision:
• Reduced revenue by 1.9%
• Reduced expenses by 2.25% ($139,740)
• Eliminated $60,000 towards visitors guide printing,
• Reduced incentives and support toward small group visitors,
• Reduced spending on promotional items, additionally we are waiting an
additional year to upgrade laptops.
• Reduced deficit by $19,155.
VP Walker presented the numbers of revised revenue of $6,046,855 and
expenses of $6,056,732 and deficit of $9,877. The capital budget number of
$971,000 has not been modified.
Conversations and questions about budget cuts were discussed including
reduced funds for incentives and support for small groups visitors. Rawn feels
comfortable with the amount our team has to incentivize and work with groups.
Additionally, you will see a small increase in event funding – we did hear that
First Thursday and Lights of the Ozarks is important to this group and we want to
ensure we’re continuing to produce great events. Rawn suggested to VP Walker
that we change “Other Revenue” to the specific revenue types, i.e. City of
Fayetteville, etc. when presenting the budget. It was also clarified that the two
other voting budget items today, AV and Ovens, are indeed included in the
revised budget the commission is seeing today.
With Commission Martin clarifying that there were no more questions,
Commissioner Wiederkehr moved to adopt the revised 2024 budget with
Commissioner Kinney seconding this motion. It was approved unanimously via a
roll call vote.
D. Vote. Exterior AV Upgrade at the FTC.
This is part of updating the infrastructure at FTC. In February we replaced the
projectors. This is phase 2 and will integrate the central system with the outdoor
system and enhance our Wi Fi options. We received 3 quotes and recommend
Commercial Audio Systems as they are familiar with the Creston system.
We have added a 10% contingency to the quote for the requested amount of
$53,788. Commissioner Moya asked if it was an option at some point to have
speakers provide music on the square. It was stated that this is the first and
necessary step we need to take to consider the upgrades in the future that would
allow outdoor music.
Rawn noted that a larger conversation with either the city’s parks or public works
would be helpful to determine and develop a good partnership in providing music
to the outdoor spaces.
Fayetteville Advertising and Promotion Commission
CEO Updates
June 2024
Executive Summary
• HMR tax revenue is rebounding. Businesses have largely caught up for the
unreported month – more details will be included in the financial report
• The audit is final and report has been issued
• Hotel occupancy is flat year to-date. This is an improvement, as last month I
reported we were down 6%
• Rawn, Vice President of Destination Services Julie Pennington, and Visitor Services
Manager Eden Moore surprised 15 hospitality professionals with the honor of
“Hospitality Hero” during May’s National Travel and Tourism week
John Berry- Botanical Garden of the Ozarks
Kristen Carl- Courtyard by Marriott & Hyatt Fayetteville
Ann Owens- Fairfield Inn
Kendra Mattal- Hilton Garden Inn
Jennifer Irwin-Fayetteville Chamber of Commerce
Lisa Branson-Fayetteville Fire Department
Kristi Andrews- Clinton House Museum
Emilie Hook- University of Arkansas Union & Events Faculty
Christy Gillespie- Staybridge Suites
Brenda Rouse- Arkansas & Missouri Railroad Excursions
Joseph Enkoff- Newk’s Eatery
Todd & Nickki Golden- Isabella’s, Mermaids and TJ’s Sandwich Shop & Hugs Ice Cream
Laci Prince and Hallie Cartwright- Arkansas Air and Military Museum
Renee Turner- Cheers at the OPO
Chrissy Sanderson- Mockingbird Kitchen
Tourism Activity
Occupancy % YTD
2024 61.7
2023 61.6
Percent change 0.2
Occupancy (%) 2024
Jan Feb Mar Apr May
This Year 43.8 57.2 60.1 69.3 77.9
Last Year 50.9 58.7 61.3 64.6 72.1
Percent Change -14.0 -2.6 -2.0 7.2 8.0
• Tina traveled to IPW as a coop opportunity with Arkansas Tourism. As a state team we
took on 90 appointments and spoke with 6 media contacts looking for content
opportunities in the southern states.
• Ragnar Relay has secured dates for the 2025 race, registration went live at the
beginning of May. Easter weekend April 18 & 19th
• Dell and Tina met with Sean Kent at the Ozark Adaptive Sports Association to talk about
how we become a more inclusive sports community
• Tina attended and represented EF with Vanny’s presence at the Over and Out moto
event in Mansfield, MO on the weekend of May 17th and 18th.
o EF’s role was to share the routes we have curated in and out of
Fayetteville and engage these women and their groups to visit.
FTC Items
• Since our last meeting, the Fayetteville Town Center has successfully hosted twelve
events. This schedule is lighter than usual due to the ongoing roof replacement. The
team has taken advantage of this down time for several projects including an
inventory of event assets and deep cleaning all rental items.
• We have undertaken a minor cosmetic upgrade to the men's bathroom with
excellent results. The bathroom stalls are now fully functional and exhibit a much
cleaner appearance.
• Fayetteville Town Center has completed its initial walk-through planning
assessment for the solar installation project, which will commence following the
roof replacement. We have mapped the project's electrical schematics and
equipment placement.
Downtown Fayetteville Coalition
• We had a successful inaugural strawberry festival hitting over 10,000 attendees.
• Lights of the Ozarks will be two separate events this year: the lighting night will be
held the Friday before Thanksgiving as is tradition. The parade will be held the first
Thursday of December
• May’s First Thursday was canceled due to an 85% chance of thunderstorms, which
ended up being mostly clear. Moving forward we will not make weather calls until the
day of the event
Marketing
• There were 467 events on the EF website in May.
• Website sessions were down 4% from April but up 83% compared to May 2023.
• The Fayetteville Strawberry Festival and NWA Pride events both made
the top 10 most viewed pages.
• Our main email list has climbed to 10,321 subscribers.
• YOY social media engagement rates are up 3X, and overall followers grew by 746
accounts.
• A redesigned Downtown Map is now available. This new map includes a broader
area which includes the entire Downtown ORA, extending south to the South
Yard development. This publication is available in the Visitors Center and at
downtown hotels.
• Anticipated yet this year: New Bikepacking Guide, Redesigned Street Map,
Redesigned Fayetteville Bucket List
• Ten Ale Trail passports were completed in May
• VC saw 1,765 visitors in May 2024
o 47% increase from May 2023 (1.202)
• VC had $5,389.80 in sales in May 2024
o 12% decrease from May 2023 ($6,065.40)
May – visitors from Bolivia, Chile, China, Ecuador, Panama, France, Germany, Ireland, Czech
Republic, England, El Salvador, Cameroon, Iran, Lativa, Gabon, China, Congo, and Mexico.
With no more discussion, Commissioner Martin asked for a motion.
Commissioner Kinney made a motion to authorize the CEO to approve a quote
from Commercial Audio Systems to allocate up to $53,788 for this project. The
motion was seconded by Commissioner Prysby, and it passed unanimously via a
roll call vote.
E. Vote. Oven Purchase at Fayetteville Town Center.
The current ovens are at the end of life and cannot be repaired. We obtained
quotes and are recommending accepting a quote from Markham Restaurant
Supply due to the comprehensive warranty and the compatibility with the existing
kitchen set up.
The amount of $23,422 has been allocated to cover the quote of $20,367 and a
15% contingency to cover unforeseen expenses related to the installation.
This amount is included in the revised budget. Commissioner Kinney made a
motion to accept the quote for the replacement ovens at the stated price and
authorize the CEO to allocate funds up to $23,422. Commissioner Moya
seconded this and it was approved unanimously.
F. Vote. Employee Handbook Additions
The entire handbook has been sent to the commission for approval, but it is our
intent to review and vote on two new policies. If the commission would like to
talk about other items in the handbook we can certainly pull those out for
discussion.
The most time sensitive policy is military leave which our current handbook does
not include and we have a team member who will need to take this type of leave
before we meet again.
The second policy is a Leave Without Pay Policy which is based on the state of
Arkansas’ LWOP policy, from the Office of Personnel Management. This is a
new policy and Rawn covered some of the high points.
Commissioner Martin asked if there were any questions or discussion and with
none, he asked for a motion to approve the handbook changes and additions.
Commissioner Wiederkehr made the motion with Commissioner Prysby
seconding it. It passed with a unanimous vote.
G. As a closing note, Rawn wanted to add that we are pleased to present our 2023
annual report. Each commissioner received a paper copy and the electronic
version will be on our website.
With no further business, Wiederkehr and Moya adjourned the meeting at 3:01.
Minutes submitted by Amy Stockton, Director of Operations, Experience Fayetteville
$382,586
Monthly A&P Tax Collections 2024**
0.24%
-1.99%
-3.15%
% change
from 2023
Previous YTD (May) HMR A&P Tax Collection Totals
2020
$1,227,866
2021
$1,475,127
2022
$ 1,781,987
2023
$2,025,005
2024
$1,960,338
$7,072
Prior Dues Collected
$410,352
Total HMR Collected
May Collection
(April Activity)
$58,727
Lodging
$344,553
Restaurant
+
-17.11%20.14%20.80%13.64%-3.19%
% change over previous year
** This represents one half of the total HMR collections. The other half supports the Parks and Recreation department.
$349,739
$401,088
$416,573 -4.31%
-6.09%$410,352
Memo
To: Molly Rawn, CEO, Experience Fayetteville
Fayetteville Advertising & Promotion Commissioners
From: Jennifer Walker, VP Finance, Experience Fayetteville
Date: June 10, 2024
Re: Financial Statements – May 2024
This packet contains Experience Fayetteville Financial Statements for the month ended
May 31, 2024. The following reports are included in the packet:
Summary P&L Financials for month ended May 31, 2024
Balance Sheet for month ended May 31, 2024
Target Budget May – 42%
Revenue target 42% of budget or higher by the end of May 2024.
Expenditures target 42% or lower at May 2024.
Total Revenue YTD: $2,372,295 or 39%; We are 3% below target.
Tax Receipts - $1,960,339 (3% below budget ytd)
Town Center - $291,344 (3% above budget ytd)
Other - $120,612
Total Operating Expenditure YTD: $2,358,001 or 39%; this is 3% under budget.
EF Main - $1,929,993
Town Center - $428,008
HMR tax – YTD May Collections (April activity) are 5% below the seasonally adjusted
budget. Please note – the City of Fayetteville has moved to an online collection system
for HMR tax revenue, which became mandatory in April 2024. At the time of reporting,
approx. 18% of businesses had not yet reported monthly HMR revenue. This is an
improvement over the previous month at 30%. We fully expect this revenue to rebound
in the next few months while businesses adapt to the new process.
Operating Net Income is $14,294 year to date.
Modified Accrual Fayetteville A and P Commission
Statement of Budget, Revenue and Expense
Year-to-Date @ May 31, 2024
Actual Budget Over/(Under)
Budget % of Budget
Revenue
Hotel, Motel, Restaurant Taxes Revenue 1,960,339 5,031,000 (3,070,661) 39.0%
Rental Revenue 274,546 605,255 (330,709) 45.4%
Event Revenue 18,334 60,000 (41,666) 30.6%
Visitor Center Store Revenue 14,785 46,500 (31,715) 31.8%
Parking Revenue 12,952 35,000 (22,048) 37.0%
Advertising Revenue 1,850 4,000 (2,150) 46.3%
Grant/Other Revenue 62,500 210,000 (147,500) 29.8%
Interest and Investment Revenue 26,989 55,100 (28,111) 49.0%
Total Revenue 2,372,295 6,046,855 (3,674,560) 39.2%
Expenses
Operating Expenses
Rental Expenses 30,809 214,500 (183,691) 14.4%
Event Expenses 31,135 130,100 (98,965) 23.9%
Visitor Center & Museum Store 13,661 53,619 (39,958) 25.5%
Personnel 780,130 2,060,934 (1,280,804) 37.9%
Sales & Marketing 740,712 1,440,267 (699,555) 51.4%
Office and Administrative 334,282 845,812 (511,530) 39.5%
Bond Payments 290,750 700,000 (409,250) 41.5%
Contribution to Capital Reserves - 100,000 (100,000) 0.0%
Other Tourism Support - Community, Art Court, DFC 136,524 311,500 (174,976) 43.8%
TheatreSquared Contribution - 200,000 (200,000) 0.0%
Total Operating Expenses 2,358,001 6,056,732 (3,698,731) 38.9%
Net Operating Income/(Loss) 14,294 (9,877) 24,171 -144.7%
Other Income
Unrealized Gain/(Loss) on Investments 146,931 0.0%
Other Expenses
FFE & Improvements 87,702 971,000 (883,298) 9.0%
Depreciation Expense 92,639 0.0%
Cost of Goods Sold 4,382 0.0%
Net Income/(Loss) (without CX Grants)(23,499) (980,877) 810,447 2.4%
CONSOLIDATED
Year-to-Date
Modified Accrual Fayetteville A and P Commission
Statement of Budget, Revenue and Expense
Year-to-Date @ May 31, 2024
Actual Budget Over/(Under)
Budget % of Budget
Revenue
Hotel, Motel, Restaurant Taxes Revenue 1,960,339 5,031,000 (3,070,661) 39.0%
Rental and Event Revenue 14,540 46,350 (31,810) 31.4%
Visitor Center Store Revenue 14,785 46,500 (31,715) 31.8%
Advertising Revenue 1,850 4,000 (2,150) 46.3%
Grant & Other Revenue 62,500 210,000 (147,500) 29.8%
Interest and Investment Revenue 26,937 55,000 (28,063) 49.0%
Total Revenue 2,080,951 5,392,850 (3,311,899) 38.6%
Expenses
Operating Expenses
Event Expenses 23,263 97,100 (73,837) 24.0%
Visitor Center & Museum Store 13,661 53,619 (39,958) 25.5%
Personnel 518,422 1,397,503 (879,081) 37.1%
Sales & Marketing 739,582 1,410,917 (671,335) 52.4%
Office and Administrative 207,790 470,507 (262,717) 44.2%
Bond Payments 290,750 700,000 (409,250) 41.5%
Contribution to Capital Reserve - 100,000 (100,000) 0.0%
Other Tourism Support - Community, Art Court, DFC 136,524 311,500 (174,976) 43.8%
TheatreSquared Contribution - 200,000 (200,000) 0.0%
Total Operating Expenses 1,929,993 4,741,146 (2,811,153) 40.7%
Net Income/(Loss) Before Other Revenue and Expenses 150,958 651,704 (500,746) 23.2%
Other Income
Unrealized Gain/(Loss) on Investments 146,931 - 146,931 0.0%
Other Expenses
FFE & Improvements 26,444 511,000 (484,556) 5.2%
Depreciation Expense 42,972
Cost of Goods Sold 4,382
Net Income/(Loss) 224,091 140,704 (63,544) 159.3%
Experience Fayetteville
Year-to-Date
Modified Accrual Fayetteville A and P Commission
Statement of Budget, Revenue and Expense
Year-to-Date @ May 31, 2024
Actual Budget Over/(Under)
Budget % of Budget
Revenue
Rental Revenue 274,546 605,255 (330,709) 45.4%
Event Revenue 3,794 13,650 (9,856) 27.8%
Parking Revenue 12,952 35,000 (22,048) 37.0%
Interest and Investment Revenue 52 100 (48) 51.9%
Total Revenue 291,344 654,005 (362,661) 44.5%
Expenses
Operating Expenses
Rental Expenses 30,809 214,500 (183,691) 14.4%
Event Expenses 7,871 33,000 (25,129) 23.9%
Personnel 261,708 663,431 (401,723) 39.4%
Sales & Marketing 1,129 29,350 (28,221) 3.8%
Office and Administrative 126,492 375,305 (248,813) 33.7%
Total Operating Expenses 428,008 1,315,586 (887,578) 32.5%
Net Income/(Loss) Before Other Revenue and Expenses (136,664) (661,581) 524,917 20.7%
Other Expenses
FFE & Improvements 61,259 460,000 (398,741) 86.7%
Depreciation Expense 49,667 0.0%
Net Income/(Loss) (247,590) (1,121,581) 873,991 22.1%
Town Center
Year-to-Date
ASSETS
Current Assets
Cash 3,570,040
Investments 1,362,215
Accounts Receivable 762,687
Prepaid Expenses 33,170
Deposits 28,369
Inventory Asset 19,525
Total Current Assets 5,776,007
Other Assets
Capital Assets
Furniture & Fixtures 169,248
Equipment 756,009
EF/CVB Building 940,410
EF/CVB Land 198,621
Building Additions 1,451,322
Walker-Stone House 1,174,064
Vehicles 122,860
Construction in Progress 19,205
Accumulated Depreciation (1,783,573)
Total Other Assets 3,048,166
TOTAL ASSETS 8,824,173
LIABILITIES AND EQUITY
Current Liabilities
Accounts Payable 138,756
Unearned Revenue 304,150
Total Liabilities 442,906
Equity
Unreserved Fund Balance 6,158,051
Operating Reserve 1,000,000
Capital Reserve 1,100,000
Temporarily Restricted Funds 126,817
Net Revenue
Gain/(Loss) on Investments 146,931
Net Revenue without Cyclocross (170,430)
Net Revenue for Cyclocross 19,898 (3,601)
Total Equity 8,381,267
TOTAL LIABILITIES AND EQUITY 8,824,173
Fayetteville A&P Commission
Balance Sheet
As of May 31, 2024
Memo
To: Molly Rawn, CEO, Experience Fayetteville
Fayetteville Advertising & Promotion Commissioners
From: Jennifer Walker, VP Finance, Experience Fayetteville
Date: June 14, 2024
Re: Presentation of the 2023 Audit Report
The Fayetteville A&P Commission has engaged the audit firm Forvis Mazars to
perform an annual financial audit for the fiscal year ending December 31, 2023. This
audit work was completed Spring 2024 and the final audit report and financial report is
now available for review and publication.
Forvis Director Cynthia Burns will present the 2023 auditor’s report. The completed
2023 Independent Auditor’s Report, Financial Statements, and Management Letter are
attached for reference.
Fayetteville Advertising &
Promotion Commission
A Component Unit of the
City of Fayetteville, Arkansas
Independent Auditor’s Report and Financial
Statements – Regulatory Modified Accrual Basis
December 31, 2023 and 2022
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Contents
December 31, 2023 and 2022
Contents
Independent Auditor’s Report ..................................................................................................................... 1
Financial Statements – Regulatory Modified Accrual Basis
Statements of Assets, Liabilities, and Fund Balance – Regulatory Modified Accrual Basis ..................... 4
Statements of Revenues, Expenditures, and Changes in Fund Balance – Regulatory Modified
Accrual Basis ......................................................................................................................................... 5
Statements of Revenues and Expenditures – Regulatory Modified Accrual Basis – Budget to
Actual ..................................................................................................................................................... 7
Notes to Financial Statements .................................................................................................................. 9
Report on Internal Control over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards – Independent Auditor’s Report ......................................................................... 18
Independent Auditor’s Report
Board of Commissioners
Fayetteville Advertising & Promotion Commission
Fayetteville, Arkansas
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Fayetteville Advertising and Promotion Commission
(Commission), a component unit of the City of Fayetteville, Arkansas, as of and for the years ended
December 31, 2023 and 2022 and the related notes to the financial statements, which collectively comprise
the Commission’s basic financial statements as listed in the table of contents.
Unmodified Opinion on Regulatory Basis of Accounting
In our opinion, the accompanying financial statements referred to above present fairly, in all material
respects, the assets, liabilities, and fund balance of the Commission as of December 31, 2023 and 2022
and its respective revenues, expenditures, and the changes in fund balance and budgetary results for the
years then ended, in accordance with the basis of accounting practices prescribed or permitted by the State
of Arkansas described in Note 1.
Adverse Opinion on U.S. Generally Accepted Accounting Principles
In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S.
Generally Accepted Accounting Principles” section of our report, the accompanying financial statements
referred to above do not present fairly, in accordance with accounting principles generally accepted in the
United States of America, the financial position of the Commission as of December 31, 2023 and 2022 or
changes in fund balance thereof for the years then ended.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States (Government Auditing Standards). Our
responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit
of the Financial Statements” section of our report. We are required to be independent of the Commission,
and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating
to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Board of Commissioners
Fayetteville Advertising & Promotion Commission
2
Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles
As described in Note 1 to the financial statements, the financial statements are prepared by the Commission
on the basis of accounting practices prescribed or permitted by the State of Arkansas (State) to demonstrate
compliance with the State’s regulatory basis of accounting and budget laws, which is a basis of accounting
other than accounting principles generally accepted in the United States of America, to meet the
requirements of the State of Arkansas. The effects on the financial statements of the variances between
the regulatory modified accrual basis of accounting described in Note 1 and accounting principles generally
accepted in the United States of America, although not reasonably determinable, are presumed to be
material and pervasive.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the financial reporting provisions of A.C.A. § 10-4-412, as described in Note 1, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the Commission’s ability to continue
as a going concern for 12 months beyond the financial statement date, including any currently known
information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing
Standards will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Commission’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Commission’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit.
Board of Commissioners
Fayetteville Advertising & Promotion Commission
3
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 30, 2024
on our consideration of the Commission’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is solely to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the Commission’s internal control over financial reporting or on compliance. That report is an integral
part of an audit performed in accordance with Government Auditing Standards in considering the
Commission’s internal control over financial reporting and compliance.
Rogers, Arkansas
May 30, 2024
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Statements of Assets, Liabilities, and Fund Balance –
Regulatory Modified Accrual Basis
December 31, 2023 and 2022
See Notes to Financial Statements 4
2023 2022
Assets
Cash and cash equivalents 3,867,134$ 3,452,687$
Investments 1,614,533 1,553,814
Accounts receivable 54,116 24,165
Deposits 28,369 28,617
Inventory 23,587 27,738
Prepaid expense 55,498 38,224
Capital assets
Buildings 3,565,796 3,250,269
Furniture and fixtures 169,248 121,169
Land 198,621 198,621
Office equipment 756,009 723,463
Vehicles 122,860 122,860
Construction in progress 19,205 104,548
Less accumulated depreciation (1,690,934) (1,526,369)
Total assets 8,784,042$ 8,119,806$
Liabilities
Accounts payable 264,409$ 149,973$
Accrued expenses 2,383 6,660
Unearned revenue 68,021 18,101
Accrued payroll 32,849 31,224
Total liabilities 367,662 205,958
Fund Balance
Unassigned 8,370,823 7,788,031
Restricted 45,557 125,817
Total fund balance 8,416,380 7,913,848
Total liabilities and fund balance 8,784,042$ 8,119,806$
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Statements of Revenues, Expenditures, and
Changes in Fund Balance – Regulatory Modified Accrual Basis
Years Ended December 31, 2023 and 2022
See Notes to Financial Statements 5
Revenues
Hotel, motel, and restaurant taxes 4,994,998$ 4,659,525$
Rental income 623,416 481,616
Visitors center store 46,119 70,301
Parking income 45,098 34,739
Investment income, net 81,500 38,868
Grant income 16,800 78,970
Event income 126,341 1,367,918
Total revenues 5,934,272 6,731,937
Expenditures
Advertising 757,900 677,263
Automobile expense 5,000 5,000
Bank charges 9,302 7,061
Bond payments 697,800 701,265
Collection expense 99,900 93,190
Contract labor 127,420 83,671
Convention development 451,052 253,535
Depreciation 203,847 166,935
Dues and subscriptions 28,531 36,381
Employee benefits 45,626 41,312
Insurance 190,310 160,378
Miscellaneous 153,355 144,200
Office supplies and printing 21,264 25,875
Payroll taxes 110,416 96,609
Postage 7,967 6,974
Professional services 35,350 27,858
Rent 20,706 24,851
Repairs and maintenance 207,474 151,041
Salaries and wages 1,456,749 1,213,492
Special projects and events 517,440 2,420,781
Taxes and licenses 10,313 8,067
Training and meetings 78,628 49,420
Utilities 134,658 154,237
Visitor center store expense 29,978 45,515
Loss on capital asset disposal 30,755 -
Total expenditures 5,431,741 6,594,911
2023 2022
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Statements of Revenues, Expenditures, and
Changes in Fund Balance – Regulatory Modified Accrual Basis (Continued)
Years Ended December 31, 2023 and 2022
See Notes to Financial Statements 6
2023 2022
Change in Fund Balance 502,531$ 137,026$
Fund Balance
Beginning of year 7,913,848 7,776,822
End of year 8,416,379$ 7,913,848$
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Statements of Revenues and Expenditures –
Regulatory Modified Accrual Basis – Budget to Actual
Year Ended December 31, 2023
See Notes to Financial Statements 7
Revenues
Hotel, motel, and restaurant taxes 4,960,000$ 4,960,000$ 4,994,998$ 34,998$
Rental income 492,000 497,500 623,416 125,916
Visitors center store 53,700 40,700 46,119 5,419
Parking income 26,000 26,000 45,098 19,098
Investment income, net 7,550 25,050 81,500 56,450
Grant Income 83,000 83,000 16,800 (66,200)
Event income 44,972 44,500 126,341 81,841
Total revenues 5,667,222 5,676,750 5,934,272 257,522
Expenditures
Advertising 768,021 730,921 757,900 (26,979)
Automobile expense 5,000 5,000 5,000 -
Bank charges 6,800 6,800 9,302 (2,502)
Bond payments 700,000 700,000 697,800 2,200
Collection expense 98,500 98,500 99,900 (1,400)
Contract labor 89,180 89,172 127,420 (38,248)
Convention development 558,940 445,402 451,052 (5,650)
Depreciation - - 203,847 (203,847)
Dues and subscriptions 32,731 38,227 28,531 9,696
Employee benefits 138,533 56,294 45,626 10,668
Insurance 193,527 205,002 190,310 14,692
Miscellaneous - - 153,355 (153,355)
Office supplies and printing 22,658 29,229 21,264 7,965
Payroll taxes 125,074 135,129 110,416 24,713
Postage 7,025 7,250 7,967 (717)
Professional services 28,000 32,000 35,350 (3,350)
Rent 22,600 22,600 20,706 1,894
Repairs and maintenance 166,895 171,394 207,474 (36,080)
Salaries and wages 1,424,122 1,519,817 1,456,749 63,068
Special projects and events 463,250 488,600 517,440 (28,840)
Taxes and licenses 10,900 10,900 10,313 587
Training and meetings 88,385 83,260 78,628 4,632
Utilities 162,500 163,500 134,658 28,842
Visitor center store expense 41,200 34,700 29,978 4,722
Loss on capital asset disposal - - 30,755 (30,755)
Total expenditures 5,153,841 5,073,696 5,431,741 (358,045)
Excess (Deficiency) of Revenues
over Expenditures 513,381$ 603,054$ 502,531$ (100,523)$
Actual
Variance
Favorable
(Unfavorable)
Original
Budget Final Budget
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Statements of Revenues and Expenditures –
Regulatory Modified Accrual Basis – Budget to Actual
Year Ended December 31, 2022
See Notes to Financial Statements 8
Revenues
Hotel, motel, and restaurant taxes $4,154,500 $4,154,500 4,659,525$ 505,025$
Rental income 478,800 351,000 481,616 130,616
Visitors center store 42,000 51,200 70,301 19,101
Parking income 23,000 33,000 34,739 1,739
Investment income, net 22,000 8,250 38,868 30,618
Grant income 86,500 13,530 78,970 65,440
Event income 38,550 207,425 1,367,918 1,160,493
Total revenues 4,845,350 4,818,905 6,731,937 1,913,032
Expenditures
Advertising 713,475 717,775 677,263 40,512
Automobile expense 5,000 5,000 5,000 -
Bank charges 8,100 6,000 7,061 (1,061)
Bond payments 707,000 707,000 701,265 5,735
Collection expense 82,390 83,090 93,190 (10,100)
Contract labor 56,940 78,488 83,671 (5,183)
Convention development 432,640 379,140 253,535 125,605
Depreciation - - 166,935 (166,935)
Dues and subscriptions 33,228 28,968 36,381 (7,413)
Employee benefits 38,410 42,315 41,312 1,003
Insurance 169,072 171,715 160,378 11,337
Miscellaneous 140,601 222,401 144,200 78,201
Office supplies and printing 19,970 22,670 25,875 (3,205)
Payroll taxes 100,361 111,895 96,609 15,286
Postage 11,875 11,875 6,974 4,901
Professional services 31,300 30,800 27,858 2,942
Rent 39,600 39,600 24,851 14,749
Repairs and maintenance 753,938 743,068 151,041 592,027
Salaries and wages 1,103,256 1,240,781 1,213,492 27,289
Special projects and events 550,050 407,765 2,420,781 (2,013,016)
Taxes and licenses 9,200 9,200 8,067 1,133
Training and meetings 67,659 61,609 49,420 12,189
Utilities 139,880 158,980 154,237 4,743
Visitor center store expense 31,700 36,200 45,515 (9,315)
Loss on capital asset disposal - - - -
Total expenditures 5,245,645 5,316,335 6,594,911 (1,278,576)
Excess (Deficiency) of Revenues
over Expenditures (400,295)$ (497,430)$ 137,026$ 634,456$
Variance
Favorable
(Unfavorable)
Original
Budget Final Budget Actual
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
9
Note 1. Nature of Operations and Summary of Significant Accounting Policies
The financial statements are presented in accordance with the regulatory modified accrual basis of presentation as
prescribed by Arkansas state law. The Fayetteville Advertising and Promotion Commission (Commission) maintains
its records on a regulatory modified accrual basis of accounting, as described in “Regulatory Accounting” and “Basis
of Accounting and Presentation.” The regulatory modified accrual basis of presentation and the modified accrual
basis of accounting differ from accounting principles generally accepted in the United States of America. The
significant accounting policies of the Commission are as follows:
Regulatory Accounting
The Arkansas Legislature enacted a law in 2005 that requires municipalities to present their financial statements in
a prescribed format and also restricts the basis of accounting for this format to one of three methods. The entity’s
governing body, however, can adopt a resolution annually to adopt Governmental Accounting Standards Board
(GASB) Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State
and Local Governments (GASB No. 34), as their reporting model in lieu of reporting on this regulatory modified
accrual basis established by Arkansas Code 10-4412. The Board of Commissioners did not adopt such a resolution
for 2023 or 2022.
The regulatory presentation is on a fund basis with no distinction being made as to the type of funds (Proprietary,
Governmental, etc.) being presented. The required financial statements consist of a balance sheet (or statement of
assets, liabilities, and fund balance), statement of revenues, expenditures, and changes in fund balance, and
statement of revenues and expenditures – budget to actual. The basis of accounting is limited to regulatory cash
basis, regulatory modified cash basis, or regulatory modified accrual basis. The Commission has elected to utilize
the regulatory modified accrual basis of accounting.
In 2023, the Commission implemented GASB Statement No. 96, Subscription-Based Information Technology
Arrangements. There was not a significant effect on the Regulatory Basis of Accounting in the current period.
Nature of Operations
The Commission is a component unit of the City of Fayetteville, Arkansas (City), established by Ordinance Number
2310 of the City for the purpose of promoting and advertising the City and its environs. The Commission is presented
in the City of Fayetteville’s Annual Comprehensive Financial Report as a discretely presented component unit. A
Commission consisting of seven members governs the Commission. Four members are owners or managers of
hotels, motels, or restaurants and serve for staggered terms of four years. Two members must be members of the
governing body of the City, are selected by the City Council, and serve at the will of the City Council. One member
is from the public at large and is nominated by the Commission and approved by the City Council. All members
must reside in the City. Members are voted on by the existing Commissioners and approved by the City Council.
The financial statements present only the Commission and are not intended to present the financial position and
results of operations of the City of Fayetteville, Arkansas, in conformity with accounting principles generally
accepted in the United States of America. Operations of the Commission include the Fayetteville Convention and
Visitors Bureau and the Fayetteville Town Center. In 2022, Clinton House Museum (Museum) operation
responsibilities were transferred from the Commission to the Museum.
Use of Estimates
Management used estimates and assumptions in preparing these financial statements. Those estimates and
assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting
period. Actual results could differ from those estimates.
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
10
Cash Equivalents
The Commission considers all liquid investments with original maturities of three months or less to be cash
equivalents. At December 31, 2023 and 2022, cash equivalents consisted of money market funds with brokers.
Basis of Accounting and Presentation
The financial statements are prepared on the modified accrual basis of accounting. As such, revenues are
recognized when the underlying exchange takes place and in the accounting period in which the revenue is both
measurable and available to finance expenditures of the fiscal period. The Commission considers all tax revenues
measurable and available when collected and exchange revenue when the transaction occurs. Expenditures are
recorded when the related liability is incurred.
Budgets
The Commission adheres to the following procedures in establishing the budgets reflected in the accompanying
financial statements:
Prior to December 1, the budget committee proposes an operating budget for the fiscal year commencing the
following January 1. The operating budget includes proposed expenditures and the means of financing them.
Prior to January 1, the Commission legally enacts the budget through approval of the Commissioners.
Budgets are adopted on a basis consistent with accounting practices prescribed or permitted by the State of
Arkansas, which practices differ from accounting principles generally accepted in the United States of America.
Budgeted revenues and expenditures represent the formal operating budget adopted by the Commission.
Budgetary control is maintained at the operations level. Budgeted amounts not spent by year-end lapse.
Investments
Investments of the Commission represent the portion of a combined investment pool managed by the City allocable
to the Commission. Investments include money market mutual funds, U.S. Treasury obligations, corporate bonds,
and U.S. Government agency obligations. Money market mutual funds, governmental securities, and corporate
bonds are recorded at fair market value based on quoted market prices. Income related to investments is recorded
when earned. Income earned in the pool is allocated to the various funds and component units weekly. At
December 31, 2023 and 2022, the Commission’s proportionate share of the investment pool was approximately
0.93% and 0.68%, respectively.
The Commission’s portion of investments held by the City amounted to $1,614,533 and $1,553,814 at
December 31, 2023 and 2022, respectively, and is held at one financial institution in the name of the City.
Approximately 86% and 96% of the pool is invested in direct obligations of the United States of America at
December 31, 2023 and 2022, respectively. The remainder is either insured or collateralized.
Accounts Receivable
Accounts receivable consist of amounts due from the Fayetteville Town Center customers and the City’s Parking
Department. For the years ended December 31, 2023 and 2022, accounts receivable were deemed fully collectible;
therefore, no allowance for doubtful accounts was considered necessary. If accounts become uncollectible, they
will be charged to operations when that determination is made. Determination of collectibility is made by
management based on knowledge of individual accounts and consideration of such factors as current economic
conditions. Accounts are generally uncollateralized. Past-due status is based on contractual terms. Past-due
accounts are not charged interest.
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
11
Inventory
Inventory is valued at the lower of cost (first-in, first-out method) or market. Inventory consists of items for sale in
the Commission’s gift shop.
Capital Assets
Capital assets are carried at historical cost or acquisition value at date of donation if acquired by gift. The
Commission’s capitalization policy states that assets with an initial value or cost greater than or equal to $5,000
and an estimated useful life of greater than one year will be capitalized. Depreciation is provided on the straight-
line method over the estimated useful lives of the respective assets, which range from 5 to 39 years.
Funding
The Commission is funded by a 1% hotel, motel, and restaurant tax on all revenue from the renting, leasing, or
otherwise furnishing of hotel or motel accommodations for profit in the City. The tax also applies to the gross receipts
or gross proceeds received by restaurants and similar businesses as may be defined from time to time by ordinance
from the sale of prepared foods and beverages for on or off premises consumption. The tax does not apply to such
gross receipts or proceeds of organizations qualified under Section 501(c)(3) of the Federal Internal Revenue Code.
The taxes are due the 20th day of the month following the month in which the taxes were collected. If taxes become
delinquent, the City Prosecutor seeks to collect the taxes. Delinquent taxes totaled $97,065 and $56,866 at
December 31, 2023 and 2022, respectively.
Revenues collected from the taxes are to be used for advertising and promotion in the City and its environs.
Revenues are also to be used for the construction, reconstruction, equipment, improvement, maintenance, repair,
and operation of a convention center, for the operation of tourist promotion facilities in the City, and for personnel
and agencies necessary to conduct the business of the Commission.
Advertising
The Commission expenses advertising, marketing, and promotion costs as incurred.
Income Taxes
The Commission is a tax-exempt organization under Section 115 of Internal Revenue Code.
Fund Balance – Governmental Funds
The fund balances for the Commission’s funds are displayed in three components:
Nonspendable – Nonspendable fund balance represents amounts that are either not in a spendable form or are
legally or contractually required to remain intact.
Restricted – Restricted fund balances may be spent only for the specific purposes stipulated by external resource
providers. Restrictions may be changed or lifted only with the consent of resource providers. Funds are externally
restricted by contributors.
Unassigned – Unassigned fund balance includes all amounts not restricted.
The Commission considers restricted amounts to have been spent when an expenditure incurred for purposes for
which both restricted and unassigned fund balance is available. The Commission applies restricted amounts first
and then unassigned amounts when an expenditure is incurred for purposes for which amounts in any of those
unrestricted fund balance classifications could be used.
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
12
Note 2. Commitments
During the year ended December 31, 2013, a resolution was proposed that recommended to the City the issuance
and sale of (1) approximately $1,500,000 of hotel and restaurant gross receipts tax refunding bonds for the purpose
of refunding the City’s outstanding hotel and restaurant gross receipts tax refunding bonds, series 2003, (2)
approximately $6,900,000 of hotel and restaurant gross receipts tax and tourism revenue capital improvement
bonds for the purpose of financing certain capital improvements in connection with the proposed Walton Arts Center
expansion and renovation, and (3) approximately $3,500,000 of hotel and restaurant gross receipts tax and tourism
revenue capital improvement bonds for the purpose of financing certain capital improvements in connection with a
proposed regional park. The resolution was approved by the Commission in May 2013 and approved by the voters
in November 2013 in a special election. The bonds were issued in October 2014, will mature in 2039, and bear
interest at coupon rates ranging from 2.0% to 5.0%. As a result of the issuance, the City retains $707,313 per year,
plus fees, for payments on these bonds. The amount retained for the bond payment would otherwise be remitted
to the Commission.
At December 31, 2023, the Commission had a commitment with respect to unfinished capital projects on the
Experience Fayetteville building. Project authorization is $490,000, with $19,205 expended through December 31,
2023, leaving required future funding of $470,795. The Commission also had a commitment with respect to
unfinished network upgrades. Project authorization is $21,000, with $0 expended through December 31, 2023,
leaving required future funding of $21,000.
Note 3. Deposits, Investments, and Investment Income
Deposits
Custodial State law requires that municipal funds be deposited in federally insured banks located in the state of
Arkansas. The municipal deposits may be in the form of checking accounts, savings accounts, and time deposits.
Public funds may also be invested in direct obligations of the United States of America; and obligations, the principal
and interest of which, are fully guaranteed by the United States of America.
The Commission maintains separate bank accounts in two banks. Deposits with banks at December 31, 2023 and
2022 amounted to $3,886,176 and $3,452,226, respectively, of which $301,708 and $254,000 was insured and the
remaining amount was collateralized by securities held in the Commission’s name.
Investments
The Commission may legally invest in direct obligations of the U.S. Government and agencies, collateralized
certificates of deposit, prerefunded municipal bonds, corporate bonds, collateralized repurchase agreements,
treasury money markets, local government trusts, and savings accounts.
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
13
At December 31, 2023 and 2022, the Commission had the following investments and maturities:
Less More
than 1 than 10
Money market mutual funds $ 606,332 $ 606,332 $ - $ - $ -
U.S. agencies obligations 1,008,201 312,542 695,659 - -
$ 1,614,533 $ 918,874 $ 695,659 $ - $ -
Less More
than 1 than 10
Money market mutual funds $ 574,898 $ 574,898 $ - $ - $ -
U.S. agencies obligations 978,916 303,464 675,452 - -
$ 1,553,814 $ 878,362 $ 675,452 $ - $ -
December 31, 2022
Maturities in Years
Type Fair Value 1–5 6–10
December 31, 2023
6–10 Type Fair Value 1–5
Maturities in Years
Interest Rate Risk – As a means of limiting its exposure to fair value losses arising from rising interest rates, the
Commission’s investment policy is to attempt to match investment maturities with cash flow requirements. The
Commission’s investments are money market mutual funds and U.S. Government agency obligations.
Credit Risk – Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its obligations.
It is the Commission’s policy to invest no more than 20% in corporate debt or in securities of a management type
investment company or investment trust. It is the Commission’s policy to limit its investments in corporate bonds to
issues that are rated investment grade by Standard & Poor’s and Moody’s Investors Service and shall maintain an
A- average rating or better for Standard & Poor’s and an A3 average rating or better for Moody’s Investors Service.
Investment in commercial paper will be rated A-1/P-1. At December 31, 2023 and 2022, the Commission’s
investments in U.S. agencies obligations were rated an average rate of AA by Standard & Poor rating and an
average rate of Aa1 by Moody’s Investors Service.
Custodial Credit Risk – Custodial credit risk is the risk that, in the event of the failure of the counterparty, the
Commission will not be able to recover the value of its investment or collateral securities that are in the possession
of an outside party.
Concentration of Credit Risk – The Commission’s policy states that investments shall be diversified by limiting
investments to avoid concentration in securities from a specific issuer less than or equal to 5% of the cost basis of
the Commission’s portfolio at the time of purchase and limits concentration in any one business sector to 15% of
the cost basis of the portfolio excluding U.S. Treasury securities and collateralized certificates of deposit. The
Commission had no concentration risk as of December 31, 2023 and 2022.
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
14
Foreign Currency Risk – This risk relates to adverse effects on the fair value of an investment from changes in
exchange rates. The Commission’s investment policy doesn’t directly address foreign currency risk. The
Commission’s investment manager only buys U.S. dollar pay securities. The Commission had no investments that
were denominated in foreign currency at December 31, 2023 and 2022.
Consistent with GASB 72, the Commission categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to
measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2
inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.
The Commission had the following recurring fair value measurements:
U.S. agencies obligations of $1,008,201.37 and $978,916 as of December 31, 2023 and 2022, respectively,
are valued using the option-adjusted discounted cash flow model (Level 2 inputs).
Money market mutual funds of $606,332 and $574,898 as of December 31, 2023 and 2022, respectively,
are valued using quoted market prices (Level 1 inputs).
Summary of Carrying Values
The carrying values of deposits and investments shown above are included in the statement of assets, liabilities
and fund balance – regulatory modified accrual basis as follows:
2023 2022
Carrying value
Deposits $ 3,865,984 $ 3,451,537
Cash on hand 1,150 1,150
Investments 1,614,533 1,553,814
5,481,667$ 5,006,501$
Included in the following statement of assets, liabilities,
and fund balance captions
Cash and cash equivalents $ 3,867,134 $ 3,452,687
Investments 1,614,533 1,553,814
$ 5,481,667 $ 5,006,501
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
15
Investment Income
Investment income (loss) for the years ended December 31, consisted of:
2023 2022
Interest and dividend income 101,399$ 16,313$
Net increase (decrease) in fair value of investments (19,899) 22,555
81,500$ 38,868$
Note 4. Employee Benefit Plan
The Commission offers a SIMPLE IRA plan to all employees who meet the eligibility requirements. The Commission
matches employee contributions up to 3% of compensation, while the employee may contribute up to 10% of his or
her salary. The Board of Commissioners of the Commission has the authority to amend the plan and contribution
rate. The Commission made contributions in the amount of $36,530 and $29,929 for the years ended December 31,
2023 and 2022, respectively.
Note 5. Related-Party Transactions
As stated in Ordinance Number 95-1, the board of the Commission consists of seven members, four of which are
owners or managers of businesses in the tourism industry which collect the hotel or restaurant taxes levied. Thus,
four members of the board are employed by restaurants or hotels that pay the tax which is the primary funding for
the Commission.
During the years ended December 31, 2023 and 2022, the Commission paid approximately $5,000 for expenses
related to operational services performed by the City for the lease of parking spaces.
The Commission had accounts receivable from the City’s Parking Department of $15,278 and $10,269 at
December 31, 2023 and 2022, respectively.
The Commission has an agreement to pay the City a collection fee of 2% of the taxes collected. During the years
ended December 31, 2023 and 2022, the Commission paid collection expenses of $99,900 and $93,190,
respectively, to the City in exchange for the City collecting tax revenue on behalf of the Commission.
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
16
Note 6. Capital Assets
A summary of changes in capital assets is as follows:
Deletions
Building 3,250,269$ $ 251,520 $ (40,541) $ 104,548 $ 3,565,796
Furniture and fixtures 121,169 48,079 - 169,248
Land 198,621 - - - 198,621
Equipment 723,463 62,042 (29,496) - 756,009
Vehicles 122,860 - - - 122,860
Construction in
progress 104,548 19,205 - (104,548)19,205
4,520,930 380,846 (70,037) - 4,831,739
Less accumulated
depreciation 1,526,369 203,847 (39,282) - 1,690,934
$ 2,994,561 $ 176,999 $ (30,755) $ - $ 3,140,805
2023
Ending
Balance
Beginning
Balance Additions Transfers
Deletions
Building 3,079,580$ $ 156,514 $ (7,000) $ 21,175 $ 3,250,269
Furniture and fixtures 96,641 18,594 - 5,934 121,169
Land 198,621 - - - 198,621
Equipment 641,976 81,487 - - 723,463
Vehicles - 122,860 - - 122,860
Construction in
progress 27,109 104,548 - (27,109) 104,548
4,043,927 484,003 (7,000) - 4,520,930
Less accumulated
depreciation 1,366,434 166,935 (7,000) - 1,526,369
$ 2,677,493 $ 317,068 $ - $ - $ 2,994,561
2022
Ending
Balance
Beginning
Balance Additions Transfers
Fayetteville Advertising & Promotion Commission
A Component Unit of the City of Fayetteville, Arkansas
Notes to Financial Statements
December 31, 2023 and 2022
17
Note 7. Leases
Two noncancelable leases for copy machines were in effect during 2023 and 2022, expiring in February 2024. In
February 2024, both leases were renewed for a 60-month term which is reflected in the future minimum lease
payments schedule. These leases contain month-to-month renewal options at the end of the term and require the
Commission to pay general liability insurance, taxes and fees, and maintenance costs. The Commission also has
a lease for commercial property, which expires in October 2025. This agreement was in effect from October 2022
through December 2022, replacing the original property lease that was effect in 2021 and terminated in September
2022. This lease contains a month-to-month renewal option upon termination and requires the Commission to pay
all utility costs and maintain damage hazard and general liability insurance coverage. In 2022, the Commission
maintained operations for the Clinton House Museum through April, at which time the lease was transferred to the
Museum. As such, no future lease payments are associated with this agreement. Rental expense for the building
operating leases, included in rent on the statements of revenues, expenditures, and changes in fund balances –
regulatory modified accrual basis, was $20,706 and $24,851 for the years ended December 31, 2023 and 2022,
respectively. The rental expense for the copier leases, included in the office supplies and printing line on the
statements of revenues, expenditures, and changes in fund balances – regulatory modified accrual basis, was
$7,660 and $8,382 for the years ended December 31, 2023 and 2022, respectively.
Future minimum lease payments at December 31, 2023 are:
2024 24,400$
2025 21,937
2026 4,682
2027 4,682
2028 4,682
Thereafter 1,561
Total future minimum lease payments 61,944$
18
Report on Internal Control over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements Performed in Accordance with
Government Auditing Standards
Independent Auditor’s Report
Board of Commissioners
Fayetteville Advertising & Promotion Commission
Fayetteville, Arkansas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States (Government Auditing Standards), the financial
statements of Fayetteville Advertising & Promotion Commission (Commission), a component unit of the
City of Fayetteville, Arkansas, which comprise the statement of assets, liabilities, and fund balance –
regulatory modified accrual basis as of December 31, 2023 and the related statements of revenues,
expenditures, and changes in fund balance – regulatory modified accrual basis, and revenues and
expenditures – regulatory modified accrual basis – budget to actual for the year then ended, and the related
notes to the financial statements, and have issued our report thereon dated May 30, 2024, which expressed
an adverse opinion on U.S. Generally Accepted Accounting Principles and an unmodified opinion on the
Regulatory Basis of Accounting.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Commission’s internal
control over financial reporting (internal control) as a basis for designing audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but
not for the purpose of expressing an opinion on the effectiveness of the Commission’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the Commission’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity’s
financial statements will not be prevented, or detected and corrected, on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
or significant deficiencies may exist that were not identified.
19
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Commission’s financial statements are free
from material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and material
effect on the financial statements. However, providing an opinion on compliance with those provisions was
not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Rogers, Arkansas
May 30, 2024
FORVIS Report to the Board of Commissioners and
Management
Fayetteville Advertising & Promotion Commission
Results of the 2023 Financial Statement Audit, Including Required
Communications
December 31, 2023
Required Communications Regarding Our Audit Strategy & Approach (AU-C
260)
Overview & Responsibilities
Matter Discussion
Scope of Our
Audit
This report covers audit results related to your financial statements:
As of and for the year ended December 31, 2023
Conducted in accordance with our contract dated January 15, 2024
Our
Responsibilities
FORVIS is responsible for forming and expressing an opinion about whether the financial statements
that have been prepared by management, with the oversight of those charged with governance, are
prepared in accordance with accounting principles permitted by Arkansas Code 10-4-412, which is a
regulatory basis of accounting.
Audit Scope &
Inherent
Limitations to
Reasonable
Assurance
An audit performed in accordance with auditing standards generally accepted in the United States of
America (GAAS) and Government Auditing Standards issued by the Comptroller General of the
United States (GAGAS) is designed to obtain reasonable, rather than absolute, assurance about the
financial statements. The scope of our audit tests was established in relation to the financial
statements taken as a whole and did not include a detailed audit of all transactions.
Extent of Our
Communication
In addition to areas of interest and noting prior communications made during other phases of the
engagement, this report includes communications required in accordance with GAAS that are
relevant to the responsibilities of those charged with governance in overseeing the financial reporting
process, including audit approach, results, and internal control. The standards do not require the
auditor to design procedures for the purpose of identifying other matters to be communicated with
those charged with governance.
Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant
ethical requirements regarding independence.
Fayetteville Advertising & Promotion Commission 1 May 30, 2024
Matter Discussion
Your
Responsibilities
Our audit does not relieve management or those charged with governance of your responsibilities.
Your responsibilities and ours are further referenced in our contract.
Distribution
Restriction
This communication is intended solely for the information and use of the following and is not intended
to be, and should not be, used by anyone other than these specified parties:
The Board of Commissioners and management
Others within the Entity
Government Auditing Standards
Matter Discussion
Additional
GAGAS
Reporting
We also provided reports as of December 31, 2023 on the following as required by GAGAS:
Internal control over financial reporting and on compliance and other matters based on an audit
of the financial statements performed in accordance with GAGAS
Reporting
Limitations
Our consideration of internal control over financial reporting and our tests of compliance were not
designed with an objective of forming an opinion on the effectiveness of internal control or on
compliance and, accordingly, we do not express such an opinion.
Qualitative Aspects of Significant Accounting Policies & Practices
Significant Accounting Policies
Significant accounting policies are described in Note 1 of the audited financial statements.
The Entity's financial statements are presented in accordance with accounting practices permitted by Arkansas Code
Section 10-4-202, which is a regulatory basis of accounting that differs from accounting principles generally accepted in
the United States of America.
With respect to new accounting standards adopted during the year, we call to your attention the following topics detailed
in the following pages:
No matters are reportable
Unusual Policies or Methods
With respect to significant unusual accounting policies or accounting methods used for significant unusual transactions
(significant transactions outside the normal course of business or that otherwise appear to be unusual due to their timing,
size, or nature), we noted the following:
No matters are reportable
Fayetteville Advertising & Promotion Commission 2 May 30, 2024
Alternative Accounting Treatments
We had discussions with management regarding alternative accounting treatments within GAAP for policies and practices
for material items, including recognition, measurement, and disclosure considerations related to the accounting for
specific transactions as well as general accounting policies, as follows:
Utilization of the modified accrual basis of regulatory accounting
Management Judgments & Accounting Estimates
Accounting estimates are an integral part of financial statement preparation by management, based on its judgments.
Significant areas of such estimates for which we are prepared to discuss management’s estimation process and our
procedures for testing the reasonableness of those estimates include:
Estimated useful lives of capital assets
Financial Statement Disclosures
The following areas involve particularly sensitive financial statement disclosures for which we are prepared to discuss the
issues involved and related judgments made in formulating those disclosures:
Commitments
Related-party transactions
Regulatory accounting
Basis of accounting and presentation
Our Judgment About the Quality of the Entity’s Accounting Principles
During the course of the audit, we made the following observations regarding the Entity’s application of accounting
principles:
No matters are reportable
Adjustments Identified by Audit
During the course of any audit, an auditor may propose adjustments to financial statement amounts. Management
evaluates our proposals and records those adjustments that, in its judgment, are required to prevent the financial
statements from being materially misstated.
A misstatement is a difference between the amount, classification, presentation, or disclosure of a reported financial
statement item and that which is required for the item to be presented fairly in accordance with the applicable financial
reporting framework.
Proposed & Recorded Adjustments
Auditor-proposed and management-recorded entries include the following:
Investments and Unrealized Gain/Loss adjustment proposed by FORVIS to agree Commission's books to the City of
Fayetteville
Uncorrected Misstatements
No uncorrected misstatements to report.
Fayetteville Advertising & Promotion Commission 3 May 30, 2024
Other Required Communications
Other Material Communications
Listed below are other material communications between management and us related to the audit:
Management representation letter (see Attachments)
We orally communicated to management other deficiencies in internal control identified during our audit that are not
considered material weaknesses or significant deficiencies.
Other Financial Reporting Matters
Although not considered material weaknesses, significant deficiencies, or deficiencies in internal control over financial
reporting, we also observed other matters and offer these comments and suggestions with respect to matters which came
to our attention during the course of the audit of the financial statements. Our audit procedures are designed primarily to
enable us to form an opinion on the financial statements and, therefore, may not bring to light all weaknesses in policies
and procedures that may exist.
However, these other matters are offered as constructive suggestions for the consideration of management as part of the
ongoing process of modifying and improving financial and administrative practices and procedures.
We can discuss these matters further at your convenience and may provide implementation assistance for changes or
improvements.
During the audit, we noted that the automatic server backup for Quickbooks did not function properly. The current
Commission policy is for the system backup to be performed after every fourth login. We recommend the
Commission consider using the online version of Quickbooks to ensure data is being backed up in accordance with
Commission policy.
Fayetteville Advertising & Promotion Commission 4 May 30, 2024
Attachments
Management Representation Letter (Attachment A)
As a material communication with management, included herein is a copy of the representation letter provided by
management at the conclusion of our engagement.
Fayetteville Advertising & Promotion Commission 5 May 30, 2024
Attachment A
Management Representation Letter
Fayetteville Advertising & Promotion Commission 6 May 30, 2024
Representation of:
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
21 South Block Avenue, Suite 100
Fayetteville, Arkansas 72701
Provided to:
FORVIS, LLP
Certified Public Accountants
P.O. Box 1893
Rogers, Arkansas 72757
The undersigned (“We”) are providing this letter in connection with FORVIS’ audits of our financial
statements as of and for the years ended December 31, 2023 and 2022.
Our representations are current and effective as of the date of FORVIS’ report: May 30, 2024.
Our engagement with FORVIS is based on our contract for services dated: January 15, 2024.
Our Responsibility & Consideration of Material Matters
We confirm that we are responsible for the fair presentation of the financial statements subject to FORVIS’
report in conformity with accounting principles permitted by Arkansas Code 10-4-412, which is a regulatory
basis of accounting that differs from accounting principles generally accepted in the United States of
America.
We are also responsible for adopting sound accounting policies; establishing and maintaining effective
internal control over financial reporting, operations, and compliance; and preventing and detecting fraud.
We understand that you will not render an unmodified opinion on the financial statements due to lack of
conformity with accounting principles generally accepted in the United States of America regarding our
accounting for regulatory basis.
Certain representations in this letter are described as being limited to matters that are material. Items are
considered material, regardless of size, if they involve an omission or misstatement of accounting
information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable
person relying on the information would be changed or influenced by the omission or misstatement. An
omission or misstatement that is monetarily small in amount could be considered material as a result of
qualitative factors.
Confirmation of Matters Specific to the Subject Matter of FORVIS’ Report
We confirm, to the best of our knowledge and belief, the following:
Broad Matters
1. We have fulfilled our responsibilities, as set out in the terms of our contract, for the preparation
and fair presentation of the financial statements in accordance with accounting practices permitted
by Arkansas Code 10-1-412, which is a regulatory basis of accounting that differs from accounting
principles generally accepted in the United States of America.
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 2
2. We acknowledge our responsibility for the design, implementation, and maintenance of:
a. Internal control relevant to the preparation and fair presentation of financial statements
that are free from material misstatement, whether due to fraud or error.
b. Internal control to prevent and detect fraud.
3. We have provided you with:
a. Access to all information of which we are aware that is relevant to the preparation and fair
presentation of the financial statements, such as financial records and related data,
documentation, and other matters.
b. Additional information that you have requested from us for the purpose of the audit.
c. Unrestricted access to persons within the entity from whom you determined it necessary
to obtain audit evidence.
d. All minutes of board of commissioner meetings held through the date of this letter or
summaries of actions of recent meetings for which minutes have not yet been prepared.
All unsigned copies of minutes provided to you are copies of our original minutes approved
by the board of commissioners, if applicable, and maintained as part of our records.
e. All significant contracts and grants.
4. We have responded fully and truthfully to all your inquiries.
Government Auditing Standards
5. We acknowledge that we are responsible for compliance with applicable laws, regulations, and
provisions of contracts and grant agreements.
6. We have identified and disclosed to you all laws, regulations, and provisions of contracts and grant
agreements that have a direct and material effect on the determination of amounts in our financial
statements or other financial data significant to the audit objectives.
7. We have identified and disclosed to you any violations or possible violations of laws, regulations,
and provisions of contracts and grant agreements, tax or debt limits, and any related debt
covenants whose effects should be considered for recognition and/or disclosure in the financial
statements or for your reporting on noncompliance.
8. We have taken or will take timely and appropriate steps to remedy any fraud, abuse, illegal acts,
or violations of provisions of contracts or grant agreements that you or other auditors report.
9. We have a process to track the status of audit findings and recommendations.
10. We have identified to you any previous financial audits, attestation engagements, performance
audits, or other studies related to the objectives of your audit and the corrective actions taken to
address any significant findings and recommendations made in such audits, attestation
engagements, or other studies.
Misappropriation, Misstatements, & Fraud
11. We have informed you of all current risks of a material amount that are not adequately prevented
or detected by our procedures with respect to:
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 3
a. Misappropriation of assets.
b. Misrepresented or misstated assets, liabilities or fund balance.
12. We have no knowledge of fraud or suspected fraud affecting the entity involving:
a. Management or employees who have significant roles in internal control over financial
reporting, or
b. Others when the fraud could have a material effect on the financial statements.
13. We understand that the term “fraud” includes misstatements arising from fraudulent financial
reporting and misstatements arising from misappropriation of assets. Misstatements arising from
fraudulent financial reporting are intentional misstatements, or omissions of amounts or
disclosures in financial statements to deceive financial statement users. Misstatements arising
from misappropriation of assets involve the theft of an entity’s assets where the effect of the theft
causes the financial statements not to be presented in conformity with accounting principles
generally accepted in the United States of America.
14. We have no knowledge of any allegations of fraud or suspected fraud affecting the entity received
in communications from employees, former employees, customers, regulators, citizens, suppliers,
or others.
15. We have assessed the risk that the financial statements may be materially misstated as a result
of fraud and disclosed to you any such risk identified.
Ongoing Operations
16. We acknowledge the current economic volatility presents difficult circumstances and challenges
for our industry. We understand the values of the assets and liabilities recorded in the financial
statements could change rapidly, resulting in material future adjustments to asset values, that
could negatively impact the entity’s ability to maintain sufficient liquidity.
We acknowledge that you have no responsibility for future changes caused by the current
economic environment and the resulting impact on the entity’s financial statements. Further,
management and governance are solely responsible for all aspects of managing the entity.
Related Parties
17. We have disclosed to you the identity of all of the entity’s related parties and all the related-party
relationships of which we are aware.
In addition, we have disclosed to you all related-party transactions and amounts receivable from
or payable to related parties of which we are aware, including any modifications during the year
that were made to related-party transaction agreements which existed prior to the beginning of the
year under audit, as well as new related-party transaction agreements that were executed during
the year under audit.
Related-party relationships and transactions have been appropriately accounted for and disclosed
in accordance with accounting principles generally accepted in the United States of America.
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 4
18. We understand that the term related party refers to:
x Affiliates.
x Entities for which investments are accounted for by the equity method.
x Trusts for the benefits of employees, such as pension and profit-sharing trusts that are
managed by or under the trusteeship of management.
x Principal owners and members of their immediate families.
x Management and members of their immediate families.
x Any other party with which the entity may deal if one party can significantly influence the
management or operating policies of the other to an extent that one of the transacting
parties might be prevented from fully pursuing its own separate interests.
Another party is also a related party if it can significantly influence the management or operating
policies of the transacting parties or if it has an ownership interest in one of the transacting parties
and can significantly influence the other to an extent that one or more of the transacting parties
might be prevented from fully pursuing its own separate interests.
The term affiliate refers to a party that directly or indirectly controls, or is controlled by, or is under
common control with, the entity.
Litigation, Laws, Rulings, & Regulations
19. We are not aware of any pending or threatened litigation or claims whose effects should be
considered when preparing the financial statements. We have not sought or received attorney’s
services related to pending or threatened litigation or claims during or subsequent to the audit
period. Also, we are not aware of any litigation or claims, pending or threatened, for which legal
counsel should be sought.
20. We have no knowledge of communications, other than those specifically disclosed, from regulatory
agencies, governmental representatives, employees, or others concerning investigations or
allegations of noncompliance with laws and regulations, deficiencies in financial reporting
practices, or other matters that could have a material adverse effect on the financial statements.
21. We have disclosed to you all known instances of violations or noncompliance or possible violations
or suspected noncompliance with laws and regulations whose effects should be considered when
preparing financial statements or as a basis for recording a loss contingency.
22. We have no reason to believe the entity owes any penalties or payments under the Employer
Shared Responsibility Provisions of the Patient Protection and Affordable Care Act, nor have we
received any correspondence from the IRS or other agencies indicating such payments may be
due.
23. We have not been designated as a potentially responsible party (PRP or equivalent status) by the
Environmental Protection Agency (EPA) or other cognizant regulatory agency with authority to
enforce environmental laws and regulations.
Nonattest Services
24. You have provided nonattest services, including the following, during the period of this
engagement:
x Preparing a draft of the financial statements and related notes.
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 5
25. With respect to these services:
a. We have designated a qualified management-level individual to be responsible and
accountable for overseeing the nonattest services.
b. We have established and monitored the performance of the nonattest services to ensure
they meet our objectives.
c. We have made any and all decisions involving management functions with respect to the
nonattest services and accept full responsibility for such decisions.
d. We have evaluated the adequacy of the services performed and any findings that resulted.
e. We have established and maintained internal controls, including monitoring ongoing
activities.
f. When we receive final deliverables from you, we will store those deliverables in
information systems controlled by us. We have taken responsibility for maintaining internal
control over these deliverables.
Financial Statements & Reports
26. We have reviewed and approved a draft of the financial statements and related notes referred to
above, which you prepared in connection with your audit of our financial statements. We
acknowledge that we are responsible for the fair presentation of the financial statements and
related notes.
Transactions, Records, & Adjustments
27. All transactions have been recorded in the accounting records and are reflected in the financial
statements.
28. We have everything we need to keep our books and records.
29. We have disclosed any significant unusual transactions the entity has entered into during the
period, including the nature, terms, and business purpose of those transactions.
30. We are in agreement with the adjusting journal entries you have proposed, and they have been
posted to the entity’s accounts.
Governmental Accounting & Disclosure Matters
31. With regard to deposit and investment activities:
a. All deposit, repurchase and reverse repurchase agreements, and investment transactions
have been made in accordance with legal and contractual requirements.
b. Investments, derivative instrument transactions, and land and other real estate held by
endowments are properly valued.
c. Disclosures of deposit and investment balances and risks in the financial statements are
consistent with our understanding of the applicable laws regarding enforceability of any
pledges of collateral.
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 6
d. We understand that your audit does not represent an opinion regarding the enforceability
of any collateral pledges.
32. We have identified and evaluated all potential fiduciary activities. The financial statements include
all fiduciary activities required by the regulatory basis of accounting.
33. Classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned)
are properly classified and, if applicable, approved.
34. Capital assets, including infrastructure and intangible assets, are properly capitalized, reported,
and, if applicable, depreciated or amortized.
35. We have appropriately disclosed the entity’s policy regarding whether to first apply restricted or
unrestricted resources when an expense is incurred for purposes for which both restricted and
unrestricted net fund balance is available and have determined that fund balance is properly
recognized under the policy.
36. We have identified and evaluated all potential tax abatements, and we believe there are no
material tax abatements.
37. The entity’s ability to continue as a going concern was evaluated and that appropriate disclosures
are made in the financial statements, as necessary.
Accounting & Disclosure
38. All transactions entered into by the entity are final. We are not aware of any unrecorded
transactions, side agreements, or other arrangements (either written or oral) that are in place.
39. Except as reflected in the financial statements, there are no:
a. Plans or intentions that may materially affect carrying values or classifications of assets,
liabilities, or fund balance.
b. Material transactions omitted or improperly recorded in the financial records.
c. Material unasserted claims or assessments that are probable of assertion or other
gain/loss contingencies requiring accrual or disclosure, including those arising from
environmental remediation obligations.
d. Events occurring subsequent to the statement of assets, liabilities and fund balance date
through the date of this letter, which is the date the financial statements were available to
be issued, requiring adjustment or disclosure in the financial statements.
e. Agreements to purchase assets previously sold.
f. Arrangements with financial institutions involving compensating balances or other
arrangements involving restrictions on cash balances, lines of credit, or similar
arrangements.
g. Guarantees, whether written or oral, under which the entity is contingently liable.
h. Known or anticipated asset retirement obligations.
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 7
40. Except as disclosed in the financial statements, the entity has:
a. Satisfactory title to all recorded assets, and those assets are not subject to any liens,
pledges, or other encumbrances.
b. Complied with all aspects of contractual and grant agreements, for which noncompliance
would materially affect the financial statements.
Revenue, Accounts Receivable, & Inventory
41. Adequate provisions and allowances have been accrued for any material losses from:
a. Uncollectible receivables.
b. Excess or obsolete inventories.
c. Purchase commitments in excess of normal requirements or at prices in excess of
prevailing market prices.
Estimates
42. We have identified all accounting estimates that could be material to the financial statements, and
we confirm the appropriateness of the methods and the consistency in their application, the
accuracy and completeness of data, and the reasonableness of significant assumptions used by
us in making the accounting estimates, including those measured at fair value reported in the
financial statements.
43. Significant estimates that may be subject to a material change in the near term have been properly
disclosed in the financial statements. We understand that “near term” means the period within one
year of the date of the financial statements. In addition, we have no knowledge of concentrations,
which refer to volumes of business, revenues, available sources of supply, or markets, existing at
the date of the financial statements that would make the entity vulnerable to the risk of severe
impact in the near term that have not been properly disclosed in the financial statements.
Fair Value
44. With respect to the fair value measurements of financial and nonfinancial assets and liabilities, if
any, recognized in the financial statements or disclosed in the notes thereto:
a. The underlying assumptions are reasonable and they appropriately reflect management’s
intent and ability to carry out its stated course of action.
b. The measurement methods and significant assumptions used in determining fair value
are appropriate in the circumstances for financial statement measurement and disclosure
purposes and have been consistently applied.
c. The significant assumptions appropriately reflect market participant assumptions.
d. The disclosures related to fair values are complete, adequate, and in conformity with the
regulatory basis of accounting.
FAYETTEVILLE ADVERTISING AND PROMOTION COMMISSION
Page 8
e. There are no subsequent events that require adjustments to the fair value measurements
and disclosures included in the financial statements.
Molly Rawn, Chief Executive Officer
mrawn@experiencefayetteville.com
Jennifer Walker, VP of Finance
jwalker@experiencefayetteville.com
TOURISM MARKETING
CAMPAIGN UPDATES
A&P Commission Meeting: June 24, 2024
●An awareness campaign comprised of high-impact digital
media channels: Display and Online Video
●Built on the themes of outdoor recreation, food & drink,
and arts & culture that have emerged from Outright’s
discovery and research
●Targeting focused geographic areas (Chicago, DFW,
Colorado) with nonstop flights to Fayeeville, and
roadtrippers
●Flight: April-December, with heavy investment through
September to capitalize on Summer and Fall travelers,
then continuing through December at a low simmer
CAMPAIGN
STRATEGY
2
3
Tourism Campaign Summary
3
—CPMs are less than half our projected
average of $20. This, combined with the
10% of added-value impressions Outright
was able to secure, allows our budget to
go much further than expected to
maximize visibility and impact.
—Chicago has the highest engagement and
strongest CTR
—Outdoor enthusiast audience is top
performer (targeting users actively using
mobile apps like AllTrails, REI, Cabela’s)
First 6 weeks: Performance from April 16 through May 31, 2024
Impressions
12,058,231
Clicks from Ads
58,681
CTR
0.49%
Industry Benchmark: 0.20-0.40%
CPM
$8.10
Video Completion Rate
87.11%
Industry Benchmark: 80%
—We added a lookalike audience based on the Experience Fayeeville email list in mid-May and are
seeing CTRs 23% higher than the campaign average
—Organic traic to the website from our target regions has increased compared to the same
time last year, signaling a lift in interest in traveling to Fayeeville
•Organic traic from Texas is up 96%, from Illinois is up 116%, and from Colorado is up 40%
—We are continuing to make improvements to the Experience Fayeeville website to beer align
with the campaign, which will in turn improve website engagement from ads
—Updated video ad leveraging footage from our recent video shoot will be in market end of
June, which will further elevate the impact of our campaign on audiences and travel to Fayeeville
—Began Arkansas Times advertising in June. Advertising and editorial coverage planned for June,
July, and December.
4
Insights and Optimizations
5
Earned Media Coverage
Additional & Expected Future Coverage: Gear Junkie; The Knot; Bring Fido; Mighty Travels; Southern Living
Memo
To: Fayetteville Advertising and Promotion Commissioners
From: Tyler Wilson, Executive Director, Fayetteville Town Center
Date: June 24, 2024
Re: Scissor Lift Purchase Fayetteville Town Center
Background:
Currently, Fayetteville Town Center owns one scissor lift that is in poor condition and another
that is a monthly rental costing $775.25 per month. The condition of the owned lift has
deteriorated to the point where it is no longer reliable for our needs. Meanwhile, the monthly
rental cost of the second lift is an ongoing expense that can be eliminated with this purchase.
The need for two lifts arises from the varying heights and mobility requirements within different
areas of the venue.
Three quotes were sought. The included quote from Hugg & Hall was the most affordable, and
best met our needs.
Budgetary Impact:
The quoted amount for two new lifts is $33,022.50 which includes tax and delivery. This
expense was included in the approved 2024 budget as a capital expense.
We have an opportunity to buy excess stock, allowing us to purchase two lifts for the initial cost
estimate of one.
Recommendation:
Staff proposes the commission authorize the CEO to accept the quote for two new scissor lifts
from Hugg & Hall and spend up to $36,300, which is the quoted price with a 10% contingency
for unforeseen costs.
Fayetteville A&P
Commission