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Home My WebLink About2025-07-28 - Agendas - FinalFayetteville Advertising and Promotion Commission July 28, 2025 Location: Fayetteville Town Center, 15 W. Mountain Street Commissioners: Staff: Elvis Moya, Chair, Tourism & Hospitality Representative Katherine Kinney, Tourism & Hospitality Representative Elliot Hunt, Tourism & Hospitality Representative Chrissy Sanderson, Tourism & Hospitality Representative Sterling Hamilton, Commissioner at-large Sarah Bunch, City Council Representative Mike Wiederkehr, City Council Representative Ryan Hauck, CEO Agenda I.Call to order at 2:00p.m. II.Reports A.CEO Report, Ryan Hauck. An executive overview of the previous month B.Financial Report, Jennifer Walker, VP of Finance C.2024 Audit Presentation, Cynthia Burns, CPA Forvis Mazars D.Marketing Report. Sarah King, VP of Marketing and Communications, Anne Davis, Outright III.Old Business A.Review and approval of June meeting minutes. B.Discussion. Favoriteville Festival Fund. Program draft included. Ryan Hauck, CEO IV.New Business A.Vote. Updating Bank Account Authorized Signers. Jennifer Walker, VP of Finance Staff recommends, in accordance with the commission’s financial policies, a vote to authorize CEO Ryan Hauck as a signer with full authority on all four bank accounts. Memo attached. B.Discussion. Changes to Bylaws to include CEO transition policy and Freedom of Information Act updates. Jennifer Walker, VP of Finance Memo and Proposed Bylaw updates included. 1 C.Discussion. Community Incentive Fund Approval Process – CEO, Ryan Hauck Staff recommendation to modify the approval process for Community Incentive Fund payments. Proposed change would require Commission approval for all future payouts. Memo and report of 2025 year-to-date disbursements attached. D.Discussion. Walker Stone House lease. Jennifer Walker, VP of Finance E.Additions to the agenda may be added upon request from a majority of the commissioners. V.Good of the Order / Adjourn VI.Meet & Greet with City of Fayetteville staff immediately following the meeting, FTC Lobby 2 Executive Updates June Updates for July A&P Commission Meeting Executive Updates Ryan Hauck, CEO has joined the Experience Fayetteville team on July 21, 2025 Marketing and Communications Media Engagement •Mobile Visitors Center deployed at NWA Pride festival – downtown maps and “All are Welcome” hand fans Publications & Visitor Materials •Events Calendar – 507 events in June. •New streetlight banners designed by Brittany Phillips Design featuring 6 Downtown Fayetteville messages were installed the first week of July. Wooo Pig Sooie banners designed by Chris Lankford will be installed on Dickson Street in the fall. •A newly designed Fayetteville Ale Trail guide will also be published this fall. The guide will feature 9 Fayetteville Craft Breweries. A new Ale Trail section on our website will debut at the same time, and the separate Ale Trail website will be retired. Media Campaigns •Fayetteville Restaurant Week will take place July 20-26. Enrolled 75 restaurants. Lots of engagement planned with local media outlets. Sales and Tourism Activity •Sales team assisted 8 events in Fayetteville in June, including: o NWA Naturals Championship – 300 attendees; Economic Impact est. $75k o Hazel Valley Rally – 500 attendees; Economic Impact est. $98k. o Ozark Valley Tri – 300 attendees; Economic Impact est. $144k o Southern Amateur Golf Championships – 300 attendees; Economic Impact est. $277k o Advantage 5v5 Soccer Tournament – 500 attendees; Economic Impact est. $104k •Ozark Music Initiative – Chamber Music Festival – 400 attendees •Tina Archer-Cope, VP Sales began CDME program Performance Metrics •LinkedIn Growth – +137 new followers in last 45 days, reaching 5,142 total followers. •Hotel Occupancy (June 2025) – 73.4% (-13% YoY). •Average Daily Rate (ADR) (June 2025) – $138.81 (+1% YoY). 3 •Visitor Center Traffic (June 2025) – 1,099 visitors (-38% YoY) o Visitors from Spain, France, Ireland and Brazil Special Events: •Razorback Baseball Super Regionals •NWA Pride Festival weekend •Walmart Shareholders week •Check out the Experience Fayetteville Calendar of Events for more! Destination Services •Julie Pennington, VP Dest. Services attended Marketing College in Macon, GA •Grand Re-Opening of Candlewood Suites •Welcome Steve Harrelson, Tourism Services Coordinator! New restaurant welcomes – •Goat Lab Brewing coming – taproom and restaurant coming in August •Bloom Cheese Collective is now open at 914 N College Ave •Sicaru Coffee now open at 716 W Sycamore St •Queen Donuts – now serving up donuts and cronuts at 2227 MLK Jr Blvd •Saying goodbye to Nomads Southtown Downtown Fayetteville Coalition Sundays on the Square will return on August 24th noon – 4pm with a music lineup curated by On the Map and music themed activities and vendors. Fayetteville Town Center June Events - hosted 21 events •Notably, Dream Big Charity Gala supporting the NWA Children’s Safety Center Operations updates •Working with Legacy Church on Airwall project logistics 4 -3.15% -4.31% -6.09% 0.89% 2.09% 1.89% 11.86% 3.24% 24.04% 9.79% $410,352 $444,020 $419,784 $394,928 $453,844 $476,619 $473,720 $546,090 $416,573 $401,088 2025 Monthly A&P Tax Collections** 5.93% 5.58% % change from 2024 2021 $1,834,940 2022 $2,191,465 2023 $2,465,118 2024 $2,502,713 2025 $2,563,566 $27,920 Prior Dues Collected $487,346 Total HMR Collected June Collections (May Activity) $69,814 Lodging $389,612 Restaurant + 26.09% 19.43%12.49%1.53%2.43% $405,262 $369,258 0.44%$448,150 1.87%$465,579 4.56%$487,346 -3.27%$387,971 Change over previous year Previous YTD (Jan-Jun) HMR A&P Tax Collection Totals **This represents half of total HMR tax collections. The other half goes to Fayetteville Department of Parks, Natural Resources, and Cultural Affairs 5 Memo To: Jennifer Walker, Interim CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, VP Finance, Experience Fayetteville Date: July 21, 2025 Re: Financial Statements – June 2025 This packet contains Experience Fayetteville Financial Statements for the month ended June 30, 2025. The following reports are included in the packet: •Summary P&L Financials for month ended June 30, 2025 •Balance Sheet for month ended June 30, 2025 Target Budget June – 50% Revenue target 50% of budget or higher by the end of June 2025. Expenditures target 50% or lower at June 2025. Total Revenue YTD: $3,146,920 or 50.2%; We are on target. Tax Receipts - $2,563,566 (1% below budget ytd) Town Center - $364,152 (2% above budget ytd) Other - $219,202 Total Operating Expenditure YTD: $2,808,430 or 45%; this is 5% under budget. EF Main - $2,280,264 Town Center - $528,166 HMR tax – YTD June Collections (May activity) are 1.7% above the seasonally adjusted budget. Operating Net Income is $338,489 year to date. 6 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ June 30, 2025 Actual Budget Over/(Under) Budget % of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 2,563,566 5,231,140 (2,667,574) 49.0% Rental Revenue 348,210 650,500 (302,290) 53.5% Event Revenue 5,172 53,700 (48,528) 9.6% Visitor Center Store Revenue 12,200 30,000 (17,800) 40.7% Parking Revenue 12,890 48,000 (35,110) 26.9% Advertising Revenue 2,025 3,500 (1,475) 57.9% Grant/Other Revenue 166,100 206,000 (39,900) 80.6% Interest and Investment Revenue 36,757 50,100 (13,343) 73.4% Total Revenue 3,146,920 6,272,940 (3,126,020) 50.2% Expenses Operating Expenses Rental Expenses 41,814 126,000 (84,186) 33.2% Event Expenses 46,197 146,175 (99,978) 31.6% Visitor Center & Museum Store 5,208 27,750 (22,542) 18.8% Personnel 964,662 2,228,707 (1,264,046) 43.3% Sales & Marketing 679,439 1,481,925 (802,486) 45.8% Office and Administrative 396,487 913,133 (516,646) 43.4% Bond Payments 348,900 702,000 (353,100) 49.7% Contribution to Capital Reserves - 100,000 (100,000) 0.0% Other Tourism Support - Community, Art Court, DFC 125,723 347,250 (221,527) 36.2% TheatreSquared Contribution 200,000 200,000 - 100.0% Total Operating Expenses 2,808,430 6,272,940 (3,464,510) 44.8% Net Operating Income/(Loss)338,489 - 338,489 0.0% Other Income Unrealized Gain/(Loss) on Investments 29,330 0.0% Other Expenses FFE & Improvements 263,641 1,081,500 (817,859) 24.4% Depreciation Expense 144,602 0.0% Cost of Goods Sold - 0.0% Net Income/(Loss) (without CX Grants)(40,424) (1,081,500) 1,011,746 3.7% CONSOLIDATED Year-to-Date 7 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ June 30, 2025 Actual Budget Over/(Under) Budget % of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 2,563,566 5,231,140 (2,667,574) 49.0% Rental and Event Revenue 2,180 45,000 (42,820) 4.8% Visitor Center Store Revenue 12,200 30,000 (17,800) 40.7% Advertising Revenue 2,025 3,500 (1,475) 57.9% Grant & Other Revenue 166,100 206,000 (39,900) 80.6% Interest and Investment Revenue 36,697 50,000 (13,303) 73.4% Total Revenue 2,782,768 5,565,640 (2,782,872) 50.0% Expenses Operating Expenses Event Expenses 40,835 121,175 (80,340) 33.7% Visitor Center & Museum Store 5,208 27,750 (22,542) 18.8% Personnel 618,452 1,419,605 (801,154) 43.6% Sales & Marketing 675,209 1,460,305 (785,096) 46.2% Office and Administrative 265,937 541,593 (275,656) 49.1% Bond Payments 348,900 702,000 (353,100) 49.7% Contribution to Capital Reserve - 100,000 (100,000) 0.0% Other Tourism Support - Community, Art Court, DFC 125,723 347,250 (221,527) 36.2% TheatreSquared Contribution 200,000 200,000 - 0.0% Total Operating Expenses 2,280,264 4,919,678 (2,639,414) 46.3% Net Income/(Loss) Before Other Revenue and Expenses 502,503 645,962 (143,459) 77.8% Other Income Unrealized Gain/(Loss) on Investments 29,330 - 29,330 0.0% Other Expenses FFE & Improvements 263,641 460,000 (196,359) 57.3% Depreciation Expense 48,788 Cost of Goods Sold - Net Income/(Loss)219,404 185,962 4,112 118.0% Experience Fayetteville Year-to-Date 8 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year-to-Date @ June 30, 2025 Actual Budget Over/(Under) Budget % of Budget Revenue Rental Revenue 348,210 650,500 (302,290) 53.5% Event Revenue 2,992 8,700 (5,708) 34.4% Parking Revenue 12,890 48,000 (35,110) 26.9% Interest and Investment Revenue 60 100 (40) 60.0% Total Revenue 364,152 707,300 (343,148) 51.5% Expenses Operating Expenses Rental Expenses 41,814 126,000 (84,186) 33.2% Event Expenses 5,362 25,000 (19,638) 21.4% Personnel 346,210 809,102 (462,892) 42.8% Sales & Marketing 4,230 21,620 (17,390) 19.6% Office and Administrative 130,550 371,540 (240,990) 35.1% Total Operating Expenses 528,166 1,353,262 (825,096) 39.0% Net Income/(Loss) Before Other Revenue and Expenses (164,014) (645,962) 481,948 25.4% Other Expenses FFE & Improvements - 621,500 (621,500) 100.0% Depreciation Expense 95,814 0.0% Net Income/(Loss)(259,828) (1,267,462) 1,007,634 20.5% Town Center Year-to-Date 9 ASSETS Current Assets Cash 3,841,440 Investments 1,333,171 Accounts Receivable 610,716 Prepaid Expenses 56,661 Deposits 40,838 Inventory Asset 21,449 Total Current Assets 5,904,275 Other Assets Capital Assets Furniture & Fixtures 300,660 Equipment 761,581 EF/CVB Building 940,410 EF/CVB Land 198,621 Building Additions 1,844,537 Walker-Stone House 1,179,152 Vehicles 122,860 Construction in Progress 456,456 Accumulated Depreciation (1,890,002) Total Other Assets 3,914,275 TOTAL ASSETS 9,818,551 LIABILITIES AND EQUITY Current Liabilities Accounts Payable 96,672 Unearned Revenue 241,842 Total Liabilities 338,514 Long Term Liabilities Notes Payable - City of Fayetteville Solar 386,825.75 Total Liabilities 386,825.75 Equity Unreserved Fund Balance 8,087,525 Operating Reserve 1,000,000 Capital Reserve - Temporarily Restricted Funds 45,558 Net Revenue Gain/(Loss) on Investments 8,203 Net Revenue (48,075) (39,872) Total Equity 9,093,211 TOTAL LIABILITIES AND EQUITY 9,818,551 Fayetteville A&P Commission Balance Sheet As of June 30, 2025 10 Memo To: Ryan Hauck, CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, VP Finance, Experience Fayetteville Date: July 21, 2025 Re: Presentation of the 2024 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, 2024. This audit work was completed Spring 2025 and the final audit report and financial report is now available for review and publication. Forvis Director Cynthia Burns will present the 2024 auditor’s report. The completed 2024 Independent Auditor’s Report, Financial Statements, and Management Letter are attached for reference. 11 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Independent Auditor’s Reports and Financial Statements – Regulatory Modified Accrual Basis December 31, 2024 and 2023 12 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Contents December 31, 2024 and 2023 Independent Auditor’s Report ....................................................................................................................... 1 Financial Statements – Regulatory Modified Accrual Basis Statements of Assets, Liabilities, and Fund Balance .................................................................................. 4 Statements of Revenues, Expenditures, and Changes in Fund Balance ................................................... 5 Statements of Revenues and Expenditures – 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 13 Forvis Mazars, LLP is an independent member of Forvis Mazars Global Limited 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, 2024 and 2023 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, 2024 and 2023, 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, 2024 and 2023 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. 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. 14 Board of Commissioners Fayetteville Advertising & Promotion Commission 2 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 t he 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2025 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. 15 Board of Commissioners Fayetteville Advertising & Promotion Commission 3 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 June 30, 2025 16 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, 2024 and 2023 See Notes to Financial Statements 4 2024 2023 ASSETS Cash and cash equivalents 3,831,021$ 3,867,134$ Investments 1,714,446 1,614,533 Accounts receivable 160,656 54,116 Deposits 40,838 28,369 Inventory 21,449 23,587 Prepaid expense 44,837 55,498 Capital assets Buildings 3,964,099 3,565,796 Furniture and fixtures 300,660 169,248 Land 198,621 198,621 Office equipment 761,581 756,009 Vehicles 122,860 122,860 Construction in progress 456,456 19,205 Less accumulated depreciation (1,745,399) (1,690,934) Total Assets 9,872,125$ 8,784,042$ LIABILITIES Accounts payable 195,285$ 264,410$ Accrued expenses 481 2,383 Unearned revenue 106,340 68,021 Accrued payroll 34,178 32,849 Due to primary government (City of Fayetteville)386,826 - Total Liabilities 723,110 367,663 FUND BALANCE Unassigned 9,079,724 8,370,822 Restricted 69,291 45,557 Total Fund Balance 9,149,015 8,416,379 Total Liabilities and Fund Balance 9,872,125$ 8,784,042$ 17 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, 2024 and 2023 See Notes to Financial Statements 5 Revenues Hotel, motel, and restaurant taxes 5,267,699$ 4,994,998$ Rental income 750,814 623,416 Visitors center store 34,746 46,119 Parking income 57,666 45,098 Investment income, net 139,760 81,500 Grant income 80,966 16,800 Event income 193,399 126,341 Total Revenues 6,525,050 5,934,272 Expenditures Advertising 725,512 757,900 Automobile expense 5,000 5,000 Bank charges 9,242 9,302 Bond payments 697,800 697,800 Collection expense 105,354 99,900 Contract labor 145,655 127,420 Convention development 577,295 451,052 Depreciation 243,610 203,847 Dues and subscriptions 33,269 28,531 Employee benefits 66,778 45,626 Insurance 196,266 190,310 Miscellaneous 135,480 153,355 Office supplies and printing 28,190 21,264 Payroll taxes 114,999 110,416 Postage 7,320 7,967 Professional services 33,226 35,350 Rent 20,706 20,706 Repairs and maintenance 212,027 207,474 Salaries and wages 1,504,728 1,456,749 Special projects and events 699,050 517,440 Taxes and licenses 10,110 10,313 Training and meetings 65,366 78,628 Utilities 129,982 134,658 Visitor center store expense 25,449 29,978 Loss on capital asset disposal - 30,755 Total Expenditures 5,792,414 5,431,741 2024 2023 18 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, 2024 and 2023 (Continued) See Notes to Financial Statements 6 2024 2023 Change in Fund Balance 732,636$ 502,531$ Fund Balance Beginning of year 8,416,379 7,913,848 End of year 9,149,015$ 8,416,379$ 19 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, 2024 See Notes to Financial Statements 7 Revenues Hotel, motel, and restaurant taxes 5,208,000$ 5,031,000$ 5,267,699$ 236,699$ Rental income 587,340 605,255 750,814 145,559 Visitors center store 46,500 46,500 34,746 (11,754) Parking income 27,000 35,000 57,666 22,666 Investment income, net 25,100 55,100 139,760 84,660 Grant Income 85,000 85,000 80,966 (4,034) Event income 188,500 189,000 193,399 4,399 Total Revenues 6,167,440 6,046,855 6,525,050 478,195 Expenditures Advertising 787,212 719,892 725,512 (5,620) Automobile expense 5,000 5,000 5,000 - Bank charges 6,200 6,200 9,242 (3,042) Bond payments 700,000 700,000 697,800 2,200 Collection expense 104,160 99,730 105,354 (5,624) Contract labor 126,545 127,050 145,655 (18,605) Convention development 699,105 679,150 577,295 101,855 Depreciation - - 243,610 (243,610) Dues and subscriptions 41,129 41,129 33,269 7,860 Employee benefits 89,994 84,383 66,778 17,605 Insurance 211,362 210,842 196,266 14,576 Miscellaneous 216,927 230,727 135,480 95,247 Office supplies and printing 42,794 42,794 28,190 14,604 Payroll taxes 123,861 122,624 114,999 7,625 Postage 14,525 12,025 7,320 4,705 Professional services 37,500 37,500 33,226 4,274 Rent 22,706 20,706 20,706 - Repairs and maintenance 210,700 200,700 212,027 (11,327) Salaries and wages 1,578,557 1,556,037 1,504,728 51,309 Special projects and events 867,550 856,100 699,050 157,050 Taxes and licenses 10,300 10,300 10,110 190 Training and meetings 70,425 61,425 65,366 (3,941) Utilities 178,800 178,800 129,982 48,818 Visitor center store expense 53,619 53,619 25,449 28,170 Total Expenditures 6,198,971 6,056,733 5,792,414 264,319 Excess (Deficiency) of Revenues Over Expenditures (31,531)$ (9,878)$ 732,636$ 742,514$ Actual Variance Favorable (Unfavorable) Original Budget Final Budget 20 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 (Continued) See Notes to Financial Statements 8 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 5,073,697 5,431,741 (358,044) Excess (Deficiency) of Revenues Over Expenditures 513,381$ 603,053$ 502,531$ (100,522)$ Variance Favorable (Unfavorable) Original Budget Final Budget Actual 21 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 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 2024 or 2023. 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. 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 Fayetteville 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 Fayetteville. Members are voted on by the existing Commissioners and approved by the City Council. The financial statements present only the financial position and results of operations of 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. 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. Cash Equivalents The Commission considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2024 and 2023, cash equivalents consisted of money market funds with brokers. 22 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 10 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, 2024 and 2023, the Commission’s proportionate share of the investment pool was approximately 0.64% and 0.93%, respectively. The Commission’s portion of investments held by the City amounted to $1,714,446 and $1,614,533 at December 31, 2024 and 2023, respectively, and is held at one financial institution in the name of the City. Approximately 83% and 86% of the pool is invested in direct obligations of the United States of America at December 31, 2024 and 2023, 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, 2024 and 2023, 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. 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. 23 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 11 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 Fayetteville. 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 Se ction 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 $73,532 and $97,065 at December 31, 2024 and 2023, respectively. Revenues collected from the taxes are to be used for advertising and promotion i n Fayetteville 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 Fayetteville, 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 two components: 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. 24 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 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, 2024, the Commission had a commitment with respect to unfinished capital projects on the Experience Fayetteville building. Project authorization is $490,000, with $456,456 expended through December 31, 2024, leaving required future funding of $33,544. The Commission also had a commitment with respect to unfinished network upgrades. Project authorization is $21,000, with $0 expended through December 31, 2024, 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, 2024 and 2023 amounted to $3,830,977 and $3,886,176, respectively, of which $370,933 and $301,708 was insured and the remaining amount was collateralized by securities held in the Commission’s name. Investments The Commission may legally invest in direct obligations of the U.S. Government and agencies, collateralized certificates of deposit, pre-refunded municipal bonds, corporate bonds, collateralized repurchase agreements, treasury money markets, local government trusts, and savings accounts. 25 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 13 The Commission had the following investments and maturities at December 31: Less More than 1 than 10 Money market mutual funds 838,107$ 838,107$ -$ -$ -$ U.S. agencies obligations 876,339 195,854 680,485 - - 1,714,446$ 1,033,961$ 680,485$ -$ -$ 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$ -$ -$ December 31, 2023 Maturities in Years Type Fair Value 1–5 6–10 December 31, 2024 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 poOiF\ to inYest no Pore tKDn 0 in ForporDte deEt or in seFurities oI D PDnDJePent t\pe investment company or investment trust. It is the Commission’s poOiF\ to OiPit its inYestPents in ForporDte Eonds to issues tKDt Dre rDted inYestPent JrDde E\ 6tDndDrd 3oor’s Dnd 0ood\’s InYestors 6erYiFe Dnd sKDOO PDintDin Dn A-average rating or better for Standard & 3oor’s Dnd Dn A DYerDJe rDtinJ or Eetter Ior 0ood\’s InYestors 6erYiFe Investment in commercial paper will be rated A-1/P-1. At December 31, 2024 and 2023, the Commission’s investments in U.S. agencies obligations were rated an average rate of AA by Standard & Poor rating and an DYerDJe rDte oI AD1 E\ 0ood\’s InYestors 6erYiFe 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 poOiF\ stDtes tKDt inYestPents sKDOO Ee diYersiIied E\ OiPitinJ investments to avoid concentration in securities from a specific issuer less than or equal to 5% of the cost basis of the Commission’s portIoOio Dt tKe tiPe oI purFKDse 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, 2024 and 2023. 26 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 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, 2024 and 2023. 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 $876,339 and $1,008,201 as of December 31, 2024 and 2023, respectively, are valued using the option-adjusted discounted cash flow model (Level 2 inputs). •Money market mutual funds of $838,107 and $606,332 as of December 31, 2024 and 2023, respectively, are valued using quoted market prices (Level 1 inputs). Summary of Carrying Values The carrying values of deposits and investments shown above are included in the statement s of assets, liabilities, and fund balance – regulatory modified accrual basis as follows: 2024 2023 Carrying value Deposits 3,829,871$ 3,865,984$ Cash on hand 1,150 1,150 Investments 1,714,446 1,614,533 5,545,467$ 5,481,667$ Included in the following statement of assets, liabilities, and fund balance captions Cash and cash equivalents 3,831,021$ 3,867,134$ Investments 1,714,446 1,614,533 5,545,467$ 5,481,667$ Investment Income Investment income (loss) consisted of the following for the years ended December 31: 2024 2023 Interest and dividend income 197,284$ 101,399$ Net decrease in fair value of investments (57,524) (19,899) 139,760$ 81,500$ 27 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 15 Note 4. Employee Benefit Plan In 2023, the Commission offered 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 for the year ended December 31, 2023. Effective February 2024, the Commission began to offer a 401(a) and 457(b) plan to all employees who meet the eligibility criteria. The Commission matches employee contributions up to 5%. The Commission contributions are paid into the 401(a) plan. The Commission made contributions in the amount of $58,870 for the year ended December 31, 2024. 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, 2024 and 2023, 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 $16,383 and $15,278 at December 31, 2024 and 2023, 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, 2024 and 2023, the Commission paid collection expenses of $105,354 and $99,900, respectively, to the City in exchange for the City collecting tax revenue on behalf of the Commission. 28 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 16 Note 6. Capital Assets A summary of changes in capital assets is as follows: Deletions Building 3,565,796$ 426,763$ (28,460)$ -$ 3,964,099$ Furniture and fixtures 169,248 149,686 (18,274) - 300,660 Land 198,621 - - - 198,621 Equipment 756,009 147,983 (142,411) - 761,581 Vehicles 122,860 - - - 122,860 Construction in progress 19,205 437,251 - - 456,456 4,831,739 1,161,683 (189,145) - 5,804,277 Less accumulated depreciation 1,690,934 243,610 (189,145) - 1,745,399 3,140,805$ 918,073$ -$ -$ 4,058,878$ 2024 Ending Balance Beginning Balance Additions Transfers 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 Note 7. Leases Two noncancelable leases for copy machines were in effect during 2024 and 2023, 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. 29 Fayetteville Advertising & Promotion Commission A Component Unit of the City of Fayetteville, Arkansas Notes to Financial Statements December 31, 2024 and 2023 17 The Commission also has a lease for commercial property, which expires in October 2025. 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. 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 for the years ended December 31, 2024 and 2023. 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 $4,564 and $7,660 for the years ended December 31, 2024 and 2023, respectively. Future minimum lease payments are as follows at December 31, 2024: 2025 21,937$ 2026 4,682 2027 4,682 2028 4,682 2029 1,561 Total future minimum lease payments 37,544$ Note 8. Note Payable to City of Fayetteville The note payable to City of Fayetteville is due December 1, 2043, with principal payments of $20,359 due annually at 0% interest. Annual maturities of long-term debt are as follows at December 31, 2024: Five-year maturity schedule 2025 20,359$ 2026 20,359 2027 20,359 2028 20,359 2029 20,359 Thereafter 285,031 386,826$ 30 Forvis Mazars, LLP is an independent member of Forvis Mazars Global Limited 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, 2024 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 June 30, 2025, 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 time ly 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. 31 Board of Commissioners Fayetteville Advertising & Promotion Commission 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 June 30, 2025 32 Fayetteville Advertising & Promotion Commission 1 June 30, 2025 Forvis Mazars Report to the Board of Commissioners Fayetteville Advertising & Promotion Commission Results of the 2024 Financial Statement Audit, Including Required Communications December 31, 2024 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, 2024. •Conducted in accordance with our contract dated February 10, 2025. Our Responsibilities Forvis Mazars 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. 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. 33 Fayetteville Advertising & Promotion Commission 2 June 30, 2025 Matter Discussion 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 Government Auditing Standards Matter Discussion Additional GAGAS Reporting We also provided reports as of December 31, 2024 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. 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 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. A significant area of such estimates for which we are prepared to discuss management’s estimation process and our procedures for testing the reasonableness of those estimates includes: •Estimated useful lives of capital assets •Valuation of investment securities 34 Fayetteville Advertising & Promotion Commission 3 June 30, 2025 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 •Basis of accounting and presentation •Regulatory accounting •Related parties 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 adjustments proposed by Forvis Mazars to agree the Commission’s books to the City of Fayetteville Uncorrected Misstatements •No unrecorded misstatements to report Other Required Communications Other Material Communications Listed below is another material communication between management and us related to the audit: •Management representation letter (see Attachments) We orally communicated to management other deficiencies in intern al control identified during our audit that are not considered material weaknesses or significant deficiencies. 35 Fayetteville Advertising & Promotion Commission 4 June 30, 2025 Required Communications Regarding Internal Control (AU-C 265) Consideration of Internal Control Over Financial Reporting In planning and performing our audit of the financial statements of Fayetteville Advertising and Promotion commission as of and for the year ended December 13, 2024, in accordance with GAAS and GAGAS, we considered the Entity’s internal control over financial reporting (internal control). This consideration served as a basis for designing audit procedures that are appropriate in the circumstance for the purpose of expressing our opinion on the financial statements. However, this consideration was not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Entity’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraphs and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may exist that were not identified. Categorizing Deficiencies by Severity Deficiency 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. Significant Deficiency 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. Material Weakness A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that material misstatements of the Entity’s financial statements will not be prevented or detected and corrected on a timely basis. Identified Deficiencies We identified certain deficiencies in internal control that we consider to be a deficiency. Deficiencies •During the last few months of the fiscal year, after the Finance Director resigned, there were some instances when the VP of Finance reviewed her own journal entries. 36 Fayetteville Advertising & Promotion Commission June 30, 2025 Attachment A Management Representation Letter 37 Representation of: Fayetteville Advertising and Promotion Commission 21 South Block Avenue, Suite 100 Fayetteville, AR 72701 Provided to: Forvis Mazars, LLP Certified Public Accountants 5115 W. JB Hunt Dr. Rogers, AR 72758 The undersigned (We) are providing this letter in connection with Forvis Mazars audits of our financial statements as of and for the years ended December 31, 2024 and 2023. Our representations are current and effective as of the date of Forvis Mazars report: June 30, 2025 Our engagement with Forvis Mazars is based on our contract for services dated: February 10, 2025 Our Responsibility & Consideration of Material Matters We confirm that we are responsible for the fair presentation of the financial statements subject to Forvis Mazars 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 Mazars 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 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. 38 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. 39 Fayetteville Advertising and Promotion Commission Page 3 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: 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 entitys 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 entitys ability to maintain sufficient liquidity. We acknowledge that you have no responsibility for future changes caused by the current economic environment or changes in federal administrative policies and the resulting impact on the entitys 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 entitys 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. 40 Fayetteville Advertising and Promotion Commission Page 4 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. 18. We understand that the term related party refers to: Affiliates. Entities for which investments are accounted for by the equity method. Trusts for the benefits of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management. Principal owners and members of their immediate families. Management and members of their immediate families. 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 attorneys 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. 41 Fayetteville Advertising and Promotion Commission Page 5 Nonattest Services 24. You have provided nonattest services, including the following, during the period of this engagement: Preparing a draft of the financial statements and related notes. 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 entitys 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 are properly valued. 42 Fayetteville Advertising and Promotion Commission Page 6 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. 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 GASB Statement No. 84, Fiduciary Activities, as amended, required by Arkansas Code 10-4-412 regulatory basis of accounting. 33. Components of net position (net investment in capital assets, restricted, and unrestricted) and 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 entitys policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance is available and have determined that net position 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 entitys ability to continue as a going concern was evaluated and that appropriate disclosures are made in the financial statements as necessary under GASB requirements. 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. 43 Fayetteville Advertising and Promotion Commission Page 7 g. Guarantees, whether written or oral, under which the entity is contingently liable. h. Known or anticipated asset retirement obligations. 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 a lack of diversity related to employers, industries, inflows of resources, workforce covered by collective bargaining agreements, providers of financial resources, or suppliers of material, labor or services, or constraints, which refer to a limitation imposed by an external party or by formal action of a governments highest level of decision-making authority related to limitations on raising revenue, limitations on spending, limitations on the incurrence of debt, or mandated spending, 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, including exposure to imposed tariffs. 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 managements 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. 44 Fayetteville Advertising and Promotion Commission Page 8 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. e. There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements, including impact of imposed tariffs and economic volatility. Jennifer Walker, Interim CEO/VP of Finance jwalker@experiencefayetteville.com Elvis Moya, Commission Chair ejmoya@uark.edu 45 Fayetteville A&P Commission Meeting Minutes June 23, 2025 – Fayetteville Town Center – 2:00 p.m. Present: Chair Elvis Moya, Sterling Hamilton, Mike Wiederkehr, Sarah Bunch, Chrissy Sanderson, Katherine Kinney Absent: Elliot Hunt Staff: Jennifer Walker I. Call to Order Chair Moya called the meeting to order at 2:00 p.m. II. Approval of Minutes Commissioner Sanderson noted a correction to the May 19 minutes—she was present, not absent. Motion to approve the minutes with correction: Commissioner Bunch Second: Commissioner Sanderson Vote: Passed via roll call III. New Business A. CEO Report – Jennifer Walker •Incoming CEO Ryan Hauck visited June 16; his first official day is July 21. •A new MOU with the City provides Placer AI software to estimate event attendance. The City is funding the first year, and data will be shared with local event producers. •Discussions are underway for a new two-part mural on the back of the Town Center and Library parking decks, as the original site is no longer available. •Chris Lankford has joined the marketing team as Director of Brand Strategy. •“Favoriteville” trademark applications have been filed for apparel and tourism services. •Staff attended the Outside Festival in Denver as part of a state tourism activation. •“Vanny,” the Mobile Visitor Center, will be activated at Pride Festival on June 28. •Restaurant Week is scheduled for July 20–26. •Hotel occupancy is down 10% from last year; similar trends across Arkansas. Lodging accounts for 15% of HMR tax revenue but affects restaurants and related businesses. •Walker closed by thanking the Commission for the opportunity to serve as Interim CEO. B. Financial Report – Jennifer Walker 46 •YTD through May: Revenue at 40% (2% under target); expenses at 39% (3% under target). •HMR collections: $2,076,220 YTD •Net income: $93,560 •Cash/investments: $4.9 million •Unearned revenue: $243,000 (mainly Town Center bookings) C. Marketing Report – Sarah King •Ongoing media coverage around SEC sports and cycling. •Partnership with @explorestlparks and Visit Bentonville highlighted a 55-mile NWA family cycling trip. •The Outside Festival activation in Denver helped showcase Arkansas tourism; follow-up email campaign in progress. •Restaurant Week will include discount admission at the Arkansas Air Museum and Botanical Garden with proof of purchase. •Anne Davis (Outright) reported 6.5 million campaign impressions and a 95% video completion rate—an 18% increase from April. •Arrivalist data shows highest visitor conversion from drive markets. •Ryan MacGregor (Outright) presented campaign performance data and optimizations underway. •Chair Moya inquired about adding Pensacola (a new direct flight market) to ad campaigns. Davis responded that while Pensacola is not included this year, campaigns for new Salt Lake City and Philadelphia flights are being used to test direct-flight strategies. D. Visitor’s Guide Printing – Vote Sarah King presented a proposal to print Visitor’s Guides. Motion to authorize the Interim CEO to accept a $28,302.90 quote from The Roark Group: Commissioner Wiederkehr Second: Commissioner Bunch Vote: Passed unanimously via roll call E. CEO Transition Policy – Vote Walker presented a formal CEO Transition Policy requested earlier in the year. She reviewed its structure and confirmed legal review. Motion to approve: Commissioner Kinney Second: Commissioner Sanderson Vote: Passed unanimously via roll call F. CEO Transition Plan – Discussion Walker shared highlights from a working transition plan, including active/future RFPs and financial obligations. 47 •The July 28 meeting will be led by Hauck with Walker and Hauck preparing the agenda. •A small city/staff meet-and-greet will follow the July meeting, with a larger public welcome reception (in partnership with the Chamber) planned for August. G. Favoriteville Festival Fund – Discussion Walker introduced a draft of a new event support fund tied to the Master Destination Plan. •The fund would exclude blackout dates (e.g., Razorback games, graduations). •Applications would be scored using a rubric based on factors like financial viability, cultural value, and community impact. •A sample event, Togue Con 2025, was shared by Commissioner Hamilton, along with a P&L example. •Commissioners discussed guarantee percentages (e.g., 30%), overall budget size, and event eligibility. •Moya suggested renaming “margin protection” to “financial risk justification.” •Sustainability may become a core scoring category (not bonus points). •Consensus: $160,000 total will fund both this program and the Community Incentive Fund. •All applications will be reviewed by the Commission during the pilot year. •Commission requested a list of past sponsorship/CIF recipients. •Walker proposed to send revised version of the plan ahead of the July meeting, with discussion and possible vote scheduled. IV. Adjournment Chair Moya thanked Jennifer Walker for her time as Interim CEO and staff for their leadership during the transition. Motion to adjourn: Commissioner Sanderson Second: Commissioner Kinney Vote: Passed unanimously Meeting adjourned at 4:00 p.m. Minutes prepared by Amy Stockton, Experience Fayetteville 48 The Favoriteville Festival Fund is a new initiative designed to support festivals and events that enrich Fayetteville’s cultural life and strengthen our local tourism economy—especially during seasons when visitor activity tends to slow. By offering post-event financial support to a small number of high-impact events each year, the program helps mitigate risk for organizers with bold ideas and a strong plan, encouraging innovation and inclusivity in our city’s event landscape. This program supports our Mission to elevate the quality of life for the community of Fayetteville through tourism promotion, partnerships, and programs. Aligned with the “Bring Out the Best” Imperative of the Experience Fayetteville Master Plan, the Favoriteville Festival Fund affirms our role as champions of Fayetteville’s most vibrant assets. By encouraging and incentivizing signature events that make Fayetteville shine, this initiative helps fulfill our commitment to enhance what makes our city a compelling, world-class destination. Priority consideration will be given to events that: •Occur during slower seasons (e.g., late June – early August, late January–early February)to maximize economic and cultural activation. No blackout dates (to be provided) •Demonstrate economic impact and financial responsibility •Celebrate the unique identity and creativity of Fayetteville How It Works The Favoriteville Festival Fund is administered through an annual application process. Organizers submit proposals detailing event plans, budget, and community impact. Applications are reviewed using a transparent evaluation framework with the following key criteria: •Event Viability •Economic & Cultural Impact •Financial Responsibility •Organizer Track Record •Access & Inclusion •Seasonal Activation & Blackout ConsiderationsThis is not a traditional grant or upfront funding program. Instead, the Fund provides margin protection – a form of post-event financial support designed to reduce the risk of hosting bold, high-impact festivals. 49 During the application process, organizers will submit a projected event budget and establish a reasonable profit margin target. After the event, staff will review the actual income and expenses. If the event does not meet the agreed-upon profit margin, the Festival Fund may reimburse part of the shortfall – up to 30% of eligible expenses or a maximum of $30,000 – to help close the gap. A selection committee consisting of two Commissioners and two staff members uses a standardized scoring rubric to evaluate submissions. Final recommendations are presented to the Fayetteville Advertising and Promotion Commission for approval. Selected events will be required to execute an MOU and complete post-event reporting procedures. By lowering financial barriers and encouraging bold, community-focused ideas, the Favoriteville Festival Fund invites new traditions to take root and ensures that Fayetteville continues to grow as a place of connection, creativity, and celebration. 50 Memo To: Ryan Hauck, CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, VP Finance, Experience Fayetteville Date: July 21, 2025 Re: Add CEO Ryan Hauck as an authorized bank signer In accordance with the Fayetteville A&P Commission Financial Policies, the following directive is outlined under Section III. Internal Controls, C. Cash Handling: “Bank accounts will include the following signatories: CEO, Commission Chair, and Director of Operations.” Due to the recent addition of Ryan Hauck, CEO, updates to the authorized bank signers are necessary. The Fayetteville A&P Commission currently maintains three operating checking accounts with First Security Bank and one checking account with Arvest Bank, as detailed below: First Security Bank: Arvest Bank: Bank account ending in 8714 Bank account ending in 4636 Bank account ending in 4209 Bank account ending in 1528 Staff Recommendations: 1.A vote to authorize the following individuals as signers with full authority on all accounts listed above: a.Commission Chairperson Elvis Moya b.Ryan Hauck, CEO c.Amy Stockton, Director of Operations 2.A vote to authorize the removal of any individuals currently listed as signers who are not included in the updated list above. 51 Memo To: Fayetteville Advertising & Promotion Commissioners From: Ryan Hauck, CEO Date: July 28, 2025 Re: Amendments to A&P Commission Bylaws Background: Staff is proposing amendments to the A&P Commission Bylaws to address the following items. The bylaws are included with highlighting to reflect proposed changes. 1)Clarification of commission’s authority to appoint an interim CEO, the full policy was approved at June 2025 commission meeting and is inserted into the employee handbook 2)The 95th General Assembly updated the Freedom of Information Act. We have updated our bylaws to be compliant. These changes will allow remote attendance at meetings for commissioners to continue and ensure we are in compliance with Arkansas Code Annotated 25-19-106(e)(6). We will be able to continue remote attendance for commissioners as we will publish the public Zoom meeting link when we publish the meeting agenda. 3)We have also added clarification to acknowledge that discussing voting or positions on agenda items between staff and commissioners is prohibited, in accordance with Ark. Code Ann. 25-19-106(f)-(h). In accordance with our bylaws, these amendments are being proposed at this meeting and will be voted on at the next meeting. 52 Fayetteville, Arkansas Advertising and Promotion Commission By-Laws I.Creation and Membership of Commission Section 1. Creation of the Commission. The Fayetteville Advertising and Promotion Commission, hereafter referred to as “the Commission,” has been created by and in accordance with provisions of Acts of Arkansas 185 of 1995, 123 of 1969, and 58 of 1970, codified as Arkansas Code Annotated §26-75-605 et seq., (“the Statute”); and City Ordinance No. 2310 (passed and approved March 1, 1977), which formally established the Commission. Section 2. Purpose of the Commission. To operate in accordance with all applicable laws, including without limitation the Statute and City Ordinance No. 2310, in using proceeds of the City of Fayetteville’s hotel, motel, and restaurant tax (“HMR tax”) to advertise and promote the City of Fayetteville and its environs and for any other lawful, appropriate purposes. Section 3. Membership of the Commission. The membership of the Commission will be composed in accordance with the Statute, and unless preempted by conflicting provisions of the Statute, the seven (7) members will include: i.Four (4) members that shall be owners or managers of businesses in the tourism industry, at least three of whom shall be owners or managers of hotels, motels, or restaurants and shall serve for staggered terms of four (4) years; ii.Two (2) members that shall be members of the governing body of the City of Fayetteville, selected by the governing body, and shall serve at the will of the governing body; and, iii.One (1) member that shall be from the public at large and shall serve for a term of four (4) years. Section 4. Officers of the Commission. At the first meeting of each year, the Commission will elect one of its members as its Chair whose term will be for one (1) year. The Chair can be elected for succeeding terms. Section 5. Vacancies on the Commission. A vacancy in any of the tourism industry positions or in the at-large position shall be filled by appointment of the Commission with the approval of the governing body of the City of Fayetteville. A vacancy may result from the expiration of a regular term or be declared by the Chair if at any time a Commissioner resigns, dies, or is absent from three (3) consecutive meetings without just cause. II.Duties of the Commission Section 1. Essential Function. The Commission is the body that determines the use of the City of Fayetteville’s advertising and promotion fund resulting from the HMR tax. Section 2. Hiring of Staff. The Commission will be responsible for the hiring, supervision, 53 and continued employment of an Executive Director a CEO. The Commission delegates to the Executive Director all authority and responsibility necessary to properly administer the business of the Commission and its agencies, within policies set by the Commission and subject to its review, including financial policies specifically addressing spending and budgeting activities. The Commission has the authority to appoint an interim CEO when necessary; full details of this policy are available in the employee handbook. Section 3. Regular Meetings. The Commission will hold meetings regularly on a consistent day and time, either in-person or virtually, notice of which shall be published. The time, place and method of meetings are subject to change at the discretion of the Chair, upon published notice. Section 4. Hybrid meetings. Whenever possible, in-person commission meetings will be made available for virtual attendance. Commissioners should make every effort to be present for in-person meetings. When circumstances prohibit in-person attendance, commissioners may participate virtually so long as their virtual attendance at in-person meetings does not exceed three meetings in a calendar year. Remote attendance will be via means that comply with all applicable provisions of Arkansas Code Annotated 25-19- 106(e)(6); we will publish the public virtual attendance meeting links when we publish public meeting agendas. Section 5. Special meetings. Special meetings of the Commission may be called, for any purpose, by the Chair or any three members of the Commission at such times deemed necessary, provided: i.Advance notice, and corresponding agenda, of every special meeting of the Commission shall be distributed for each Commissioner not less than three (3) days before such meeting; and, ii.No business shall be transacted in special meetings, other than business referred to in the agenda. Section 6. Quorum. No formal business shall be conducted without a quorum of the Commission, defined as a majority of the Commissioners. Section 7. Proxy. No Commissioner may vote by proxy. Section 8. Budget. The Commission will annually approve a budget for the operation of the Commission and its agencies. Section 9. Freedom of Information Act Arkansas state law outlines that business must be conducted in a public meeting and this code further defines communication parameters outside of public meetings. Discussions between commissioners and staff concerning voting or positions on agenda items, outside of public meetings, are prohibited. This is in compliance with Ark. Code Ann. 25-19-106(f)-(h). Commissioners and staff will adhere to state code regarding Freedom of Information Act. III.Reporting Section 1. Meeting Schedule. The Commission’s meeting schedule will be published and accessible to the public. 54 Section 2. Meeting Agendas. The agenda and supporting documents for meetings of the Commission will be distributed no later than three (3) business days before the scheduled meeting. Section 3. Tax Summaries. The consolidated HMR tax report summaries will be published and accessible to the public. IV.Financial Policies and Conflicts of Interest Section 1. Financial Policies. Through its Executive Director, the Commission will develop financial policies, implement financial procedures in accordance with those policies, and ensure the practices of the Commission and its agencies are carried out in accordance with those policies. Section 2. Conflict of Interest. No Commissioner may participate in, vote on, influence, or attempt to influence an official decision of the Commission, unless the pecuniary interest that may accrue to the Commissioner is incidental to their vocation or accrues to the Commissioner to no greater extent than the pecuniary interest could be foreseen to accrue to all other members of the vocation. V.Amendment of the By-Laws Amendments. Amendments to these By-Laws shall be proposed in writing at a regular meeting of the Commission and voted on at a subsequent meeting. Amendments to these By-Laws shall be effective with an affirmative vote of 2/3 of the members of the Commission. If the proposed, written amendment has been distributed to all Commissioners, a special meeting for the purpose of voting on the proposed amendment can be called after ten (10) days following distribution to the Commissioners of the proposed amendment. 55 Memo To: Ryan Hauck, CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, Interim CEO Date: July 21, 2025 Re: Community Incentive Fund – Proposed Change to Approval Process The Community Incentive Fund was established to provide flexible, strategic support to initiatives that enhance tourism and promote the City of Fayetteville. Historically, disbursements from this account have been approved at the discretion of the CEO. Staff recommends a change to the approval process for these funds. Specifically, we propose that all future payments from the Community Incentive Fund require approval by a majority vote of the Commission during a regularly scheduled or special meeting. This change is intended to: •Increase transparency and oversight of discretionary spending •Ensure that expenditures reflect shared priorities and receive input from the full Commission Implementation: •Requests for Community Incentive Fund support will continue to be received and reviewed by staff. •Staff would present eligible requests to the Commission for discussion and vote prior to payment. •No retroactive approvals would be required for payments made prior to this policy change. Included in the agenda packet is a summary report for 2025 year-to-date payments from the Community Incentive Fund for Commission review. We look forward to the Commission’s discussion and feedback on this proposed change. Recommendation: Staff recommends that future payments from the Community Incentive Funds account require approval by a majority vote of the Commission during a regularly scheduled meeting or special meeting. 56 Fayetteville A&P Commission Community Incentive Detail January 1 through July 21, 2025 Date Name Memo Amount 80100 · Community Event Incentives 06/25/2025 Fairfield Inn | UAPB Marching Band Lodging for UAPB Marching Band - Juneteenth 243.44 02/01/2025 Brittany Johnson Books + Blankets contribution 300.00 06/13/2025 Angel Marin Arceo Comedy show 500.00 01/27/2025 Committee for Mardi Gras Inc 2025 Mardi Gras Royal Sponsor 500.00 05/20/2025 Kyndal Saverse Fayetteville Movement Festival sponsorship 500.00 06/12/2025 NWA Center for Sexual Assault Let's Talk NWA 2025 Juneteenth Celebration sponsorship 500.00 01/08/2025 Beyond A Step Inc Mom Prom 2025 Sponsorship 600.00 01/06/2025 JazzyJae NWA Feb 2025 Blackowned Business Expo - Black Magic Sponsor 750.00 05/16/2025 Your Yoga, LLC Yoga in the Upper Ramble - Sunsets on the Ramble 750.00 04/01/2025 Arkansas Classical Theatre AR Classical Theatre - The Comedy of Errors 1,000.00 01/06/2025 Barley Hops & Water Frost Fest Sponsor 2025 1,000.00 03/13/2025 Fayetteville Chamber of Commerce Women of ALL Generations Network Sponsor 1,000.00 05/12/2025 Jonathan DerGazarian Jam Etiquette Workshop 1,000.00 06/28/2025 Julia Paganelli Marin Bee Balm Arkansas Literary Festival 2025 1,000.00 05/13/2025 Ra-Ve Cultural Foundation Inc Visiting Artists' Appearance Fees 1,000.00 03/12/2025 Travis Smith Productions LLC Music Industry Meetup (April 22)1,000.00 05/22/2025 Trey Marley Prairie Street Junk Market support 1,000.00 01/02/2025 Community Creative Center Wheel Club - Year One 1,250.00 04/27/2025 Old Friend Productions LLC Old Friends Showcase at Miller Lodge 1,500.00 04/29/2025 Stephen Wallace Arkansas Pride Metal Fest sponsorship 1,500.00 04/30/2025 Symphony Orchestra of Northwest ArkansasFY25 SoNA Beyond events 1,500.00 04/01/2025 Visual and Performing Arts at Fenix Fenix Arts - Creekbed Carter Concert and Elder Exhibit 1,500.00 06/23/2025 Washington County 4-H Clubs Foundation2025 NWA Fiber Festival support 1,500.00 03/24/2025 Brain&Brain LLC OZ Play Event Funding 1,600.00 04/02/2025 Raif Box HARCO 2025 Series Funding 2,000.00 02/09/2025 Vaughn Mims HopOut 2025 shows 2,000.00 02/28/2025 Mount Sequoyah Center Sequoyah Hall exhibitions Sponsorship 2025 2,500.00 02/03/2025 Ozark Gravel Cyclists 2025 Bikepacking Clinic Series & Summit 2,500.00 01/31/2025 Roger Barrett On The Map - Spring 2025 shows 2,500.00 02/11/2025 Community Creative Center Fayetteville Gallery Coalition - Gallery Hop on March 8, 2025 2,800.00 05/12/2025 Botanical Garden of the Ozarks Sponsor for Terrific Tuesday Nights 3,000.00 01/31/2025 Community Creative Center 2025 Arkansas Pottery Festival sponsorship 3,000.00 04/23/2025 KUAF 91.3 KUAF Lunch Hour sponsorship 5,000.00 01/15/2025 NWA Martin Luther King Jr Council MLK Recommitment Celebration Sponsorship Feb 25 5,000.00 04/29/2025 Robyn Jordan 2025 Her Set Her Sound Sponsor 5,000.00 04/04/2025 Northwest Arkansas Equality Center Inc 2025 NWA Pride Sponsorship: Diamond Level 10,000.00 01/24/2025 Ozark Music Initiative Ozark Music Festival grant award, June 2025 10,000.00 04/04/2025 Northwest Arkansas Equality Center Inc 2025 NWA Pride - Friday Talent Support 18,500.00 03/01/2025 Clinton House Museum Clinton House Museum support - 2025 25,000.00 Total 80100 · Community Event Incentives 121,793.44 80300 · TheatreSquared Contribution 03/25/2025 TheatreSquared Inc 2025 Contribution 200,000.00 Total 80300 · TheatreSquared Contribution 200,000.00 Page 1 of 157 Memo To: Ryan Hauck, CEO, Experience Fayetteville Fayetteville Advertising & Promotion Commissioners From: Jennifer Walker, Interim CEO Date: July 21, 2025 Re: Walker Stone House Lease Agreements The Walker Stone House is currently occupied by the Folk School of Fayetteville. The existing lease is set to expire in February 2026. The current tenant, represented by Bernice and Bryan Hembree with Folk School Fayetteville, has notified staff of a leadership transition and a proposed arrangement to transfer operations of the Folk School to a new organization. Ozark Folkways has submitted a Letter of Intent expressing interest in signing a five-year lease at a symbolic rate of $1 per year. The proposal includes a continuation of the building’s existing use as a community music space and assumes responsibility for preserving key program elements such as the teachers cooperative and instrument lending library. The proposed transition would include the donation of the “Folk School of Fayetteville” brand name and associated assets to Ozark Folkways. The Letter of Intent outlines the broad terms of the proposed agreement, with a target transition date of September 1, 2025. It is non-binding and intended to serve as the basis for further negotiation. A formal lease agreement would be brought before the Commission for approval at a future meeting, pending review by legal counsel. Staff are seeking Commission feedback and guidance prior to beginning the formal lease negotiation process. A copy of the Letter of Intent is included for your reference. Please feel free to contact me with any questions in advance of the meeting. 58 59 60