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Home My WebLink About2021-03-15 - Agendas - Final RevisedFayetteville Advertising and Promotion Commission March 15, 2021 2:30 p.m. Location: Virtual Public Meeting, Via Zoom. Register in advance for this webinar: Commissioners: Katherine Kinney, Chair, Tourism & Hospitality Representative Todd Martin, Tourism & Hospitality Representative Chrissy Sanderson, Tourism & Hospitality Representative Elvis Moya, Tourism & Hospitality Representative Robert Rhoads, Commissioner at -large Matthew Petty, City Council Representative Sarah Bunch, City Council Representative Staff: Molly Rawn, Chief Executive Officer Agenda Call to order at 2:30 p.m. II. Old Business A. Review and approval of February 2021 minutes III. New Business A. January and February 2021 financial statements; December 2020 and January 2021 HMR reports B. Vote. Financial Policies. Staff recommends the commission vote to adopt the attached Financial Policies which document many practices already in use and establish both an operating and capital reserve. C. Vote. Meeting schedule. Staff recommends changing the monthly meeting to the 4t" Monday at 2 pm rather than the 3rd Monday to allow presentation of the prior month's financial statement. D. Vote: Commissioner Appointments. The interview committee presents their recommendations for vote. Memo pending, interviews underway. E. Annual Marketing Report presented by Hazel Hernandez, Vice President of Marketing and Communications F. Agenda Additions. Additions to the agenda may be added upon request from a majority of commissioners IV. Announcements V. Adjourn Fayetteville Advertising and Promotion Commission Minutes from February 811, 2021 Meeting Virtual Public Meeting, Via Zoom Commissioners Present: Matthew Petty, Chairperson, Katherine Kinney, Todd Martin, Chrissy Sanderson, Robert Rhoads, Sarah Bunch, Elvis Moya, Staff: Molly Rawn, Chief Executive Officer and Jennifer Walker, Vice President of Finance Chairperson Petty called the meeting to order at 2:02 p.m. doing a roll call vote with each commissioner being present. Old Business A. Commissioner Martin moved to approve the December 2020 minutes as presented and Commissioner Kinney seconded the motion. A roll call vote was approved unanimously. III. New Business A. Vote. Appointment of a commission chairperson. In accordance with our by- laws, a chairperson must be voted on by the active commissioners at the first meeting of every year. The chair serves a one-year term. Chair Petty has served as chair the last three years and stated he's appreciated the opportunity to serve and is proud of what the commission has collectively accomplished. He does not intend to submit his name for consideration this year. He opened the floor to accept recommendations. Commissioner Rhoads recommended Commissioner Bunch and then Commissioner Bunch, along with other commissioners, recommended Commissioner Kinney with Commissioner Kinney also volunteering to serve. Petty asked if there were other nominations and with none, Petty called for a roll call vote with each commissioner voting for Commissioner Kinney to serve as chairperson. Chair Petty then gave the floor to Commissioner Kinney who turned it over to CEO Rawn who shared her appreciation for Commissioner Petty's leadership before she began. B. Presentation of the 2019 audited financials by BKD, LLP. CEO Rawn began by stating that typically the audit is presented in quarter 2 of the following year, we are presenting it now due to pandemic related delays. Rawn turned it over to Cynthia Burns with BKD. She began with the Independent Auditor's report and pointed an adverse opinion and an unmodified opinion on regulatory basis of accounting, which is the highest opinion that is given. She pointed out that the team has worked hard to segregate duties and no significant deficiencies or material weaknesses were found. Fayetteville Advertising and Promotion Commission had a good year, with footnotes being quite consistent with last years, with footnote 7 noting the potential impact of COVID19. No problems were encountered with working with the management to conduct the audit. The next item she shared covered internal controls. Due to the size of staff, it is hard to eliminate all segregation of duties. With an additional finance position now, this area will diminish for the next audit. C. Vote: Engagement letter for 2020 audit. CEO Rawn is recommending we sign an engagement letter with BKD for the 2020 audit and filing the Clinton House Museum's 990 for a budgetary impact of $23,000. Chair Kinney asked if there was a motion. Commissioner Rhoads made a motion to engage BKD for the 2020 audit and filing of the Clinton House Museum's 990 with a budget impact of approximately $23,000 with Commissioner Sanderson seconding. The motion passed unanimously via a roll call vote. D. Vote. Submitting a loan application through the Paycheck Protection Program (PPP), approximately $246,000. Fayetteville Advertising and Promotion Commission is now eligible for this assistance through PPP as was addressed in the meeting packet. CEO Rawn introduced this and asked VP of Finance Walker to present. Walker stated that this was important as it ensures our staff is intact through the duration of the loan as we await to see our first quarter revenue. Because we had significant reduction of staff due to cancelled events in 2020, we would not be able to receive 100% forgiveness of the loan, Walker estimates that we would pay back 25-30% of the loan with an interest of 1 %. She is investigating the option to request 100% loan forgiveness but to be able to apply for this option, we would need commission approval to meet the deadline and would need the approval before we knew if we had forgiveness of 100% of the loan. Rawn stated that we've done due diligence in researching this before bringing it to the commission in talking with the finance department at the Little Rock CVB who is in a similar situation. There being no questions, Chair Kinney presented the item to vote. Commissioner Moya made the motion to authorize Rawn to submit a loan application through the PPP program to not exceed $246,000. Commissioner Rhoades seconded it and it passed unanimously via roll call vote. E. Vote. Approving a quote for $75,785 with West Pro Construction for repairto the Town Center airwall. CEO Rawn presented this vote, noting it is one of the capital improvements presented in the 2021 budget. To replace the airwalls is an estimated cost of $400,000 and to repair them will cost approximately $75,000. Rawn is asking for ability to just submit one quote as this is a very specialized service. Commissioner Sanderson asked what the timeline would be for the repair with Rawn saying she estimated work could begin within a month of approval. Commissioner Moya asked what an estimate of the life span of the repair would be with Rawn saying she had the impression with proper care it could have a 10 year life span. With no more questions, Chair Kinney asked for a motion to accept the bid. Commissioner Petty made the motion with Commissioner Martin seconding it and the vote passed unanimously via roll call vote. F. Vote. Approving a quote for $21,834 from Multi -Craft Contractors for replacement of a Town Center roof -top HVAC unit. This is one of the capital improvements presented in the 2021 budget. Rawn is presenting one quote from MCC as our 2019 maintenance agreement with MCC gives us a favorable quote on this project. Chair Kinney asked if there were any questions and with none, she asked for a motion to approve the quote for $21,834 from Multi -Craft Contractors to replace a FTC HVAC unit. Commissioner Sanderson made the motion with Commissioner Rhoads seconding and it approved unanimously through a roll call vote. G. Vote. Renewal of annual contract with Sells Agency to serve as agency of record through December 31, 2021. This contract amount will vary based on the amount of media placement and agency services we utilize based on our budget. CEO Rawn is asking to continue our contract with Sells for 2021. Our intent to put this out to bid later this year. Commissioner Bunch asked what the deliberation process is when we submit a proposal for bids. Rawn gave two examples, one being when you are doing a renovation project such as the renovation of FTC where we worked with the city on the proposal process. For this example, we submitted a RFP for distribution. Another example would be a marketing project which is actually a Request for Qualifications, an RFQ, more than a request for a certain dollar amount. With no further questions, Chair Kinney asked for a motion with Commissioner Petty making the motion to renew the annual contract with Sells Agency to serve as our agency of record and Commissioner Bunch providing a second, with it passing unanimously through a roll call vote. IV. Announcements: A. CEO Rawn shared that Fayetteville Advertising and Promotion Commission will soon have two open seats as Commissioner Martin's tourism and hospitality seat and Commissioner Rhoads's at -large seat both expire on March 31st. Both are eligible to re -apply. Rawn explained that Martin's seat would need to be filled by someone who is an owner or operator of a hospitality organization. Applications are due on February 19th. Rawn suggested that a block of time be set aside for the committee to meet virtually with the candidates who meet the qualifications. Commissioner Petty asked if we can consider limiting the number of interviews if there are clearly candidates who are most qualified and if we receive numerous applicants. This was liked by the commission and Rawn will send the packet of applicants to the committee requesting they indicate their top candidates to determine who will be interviewed. B. HMR for December down 18.70% from 2019 YTD. Rawn said we were prepared for this and were even prepared for a larger decrease. December numbers reflect November activity. When we meet in March, we will submit both January and February numbers. V. Adjourn. With no further questions or announcements, Commissioner Kinney adjourned the meeting at 3:08pm Minutes submitted by Amy Stockton, Director of Operations, Experience Fayetteville Fayetteville A&P Commission Balance Sheet As of January 31, 2021 ASSETS Current Assets Cash 1,868,390 Investments 594,164 Accounts Receivable 260,284 Prepaid Expenses 16,779 Deposits 30,617 Visitors Guide Trade 4,001 Inventory 12,365 Total Current Assets 2,786,600 Other Assets Capital Assets Furniture & Fixtures 96,641 Equipment 498,597 EF/CVB Building 940,410 EF/CVB Land 198,621 Building Additions 971,952 Walker -Stone House 1,167,218 Accumulated Depreciation (1,232,947) Total Capital Assets 2,640,491 Total Other Assets 2,640,491 TOTAL ASSETS 5,427,091 LIABILITIES AND EQUITY Current Liabilities Accounts Payable 114,270 Sales Tax Payable 545 Unearned Revenue 112,630 Subtotal: Current Liabilities 227,445 Total Liabilities 227,445 Equity Fund Balance 4,879,105 Temporarily Restricted Funds 494,980 Net Revenue Gain/(Loss) on Investments (253,206) Net Revenue without Cyclocross 12,213 Net Revenue for Cyclocross 66,555 (174,439) Total Equity 5,199,647 TOTAL LIABILITIES AND EQUITY 5,427,091 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ January 31, 2021 CONSOLIDATED Year -to -Date Actual Budget Over/(Under) Budget %of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 263,665 3,460,576 (3,196,911) 7.6% Rental Revenue 5,858 350,250 (344,392) 1.7% Event Revenue 173 37,500 (37,327) 0.5% Visitor Center Store Revenue 300 45,258 (44,959) 0.7% Parking Revenue 128 21,500 (21,372) 0.6% Advertising Revenue - 8,000 (8,000) 0.0% WFF Cycling Coordinator Grant - 31,190 (31,190) 0.0% Interest and Investment Revenue 1,457 21,500 (20,043) 6.8% Total Revenue 271,581 3,975,774 (3,704,193) 6.8% Expenses Operating Expenses Rental Expenses 199 68,690 (68,491) 0.3% Event Expenses 868 73,800 (68,491) 1.2% Visitor Center & Museum Store 3,337 41,560 (136,982) 8.0% Personnel 76,501 1,329,680 (273,964) 5.8% Sales & Marketing Expenses 41,309 961,675 (479,436) 4.3% Office and Administrative Expenses 68,736 593,369 (890,382) 11.6% Bond Payments 58,416 707,000 (648,584) 8.3% TheatreSquared Contribution - 200,000 (200,000) 0.0% Total Operating Expenses 249,367 3,975,774 (2,766,329) 6.3% Net Income/(Loss) Before Other Revenue and Expenses 22,214 - (937,864) 0.0% Other Income Unrealized Gain/(Loss) on Investments" (253,206) 0.0% Other Expenses FFE & Improvements - 155,000 (155,000) 0.0% Depreciation Expense 11,667 0.0% Cost of Goods Sold (299) 0.0% Net Income/(Loss) (without Cyclocross Grants) (242,360) (155,000) (794,231) 156.4% Unrealized Gain/(Loss) on Investments (253,206) Net Income/(Loss) Without Cyclocross Events 10,847 Net Income/(Loss) for Cyclocross Events 66,555 Total Net Income/(Loss) (175,805) ** This is a City of Fayetteville accounting entry that reverses in February '21 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ January 31, 2021 Experience Fayetteville Year -to -Date Actual Budget Over/(Under) Budget %of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 263,665 3,460,576 (3,196,911) 7.6% Event Revenue - 26,500 (26,500) 0.0% Visitor Center Store Revenue 300 45,258 (44,958) 0.7% Advertising Revenue - 8,000 (8,000) 0.0% WFF Cycling Coordinator Grant - 31,190 (31,190) 0.0% Interest and Investment Revenue 1,327 19,000 (17,673) 7.0% Total Revenue 265,292 3,590,524 (3,325,232) 7.4% Expenses Operating Expenses Event Expenses 613 62,800 (62,187) 1.0% Visitor Center & Museum Store 3,337 41,560 (38,223) 8.0% Personnel 57,880 910,718 (852,838) 6.4% Sales & Marketing 41,159 942,375 (901,216) 4.4% Office and Administrative 40,900 302,799 (261,899) 13.5% Bond Payments 58,416 707,000 (648,584) 8.3% TheatreSquared Contribution - 200,000 (200,000) 0.0% Total Operating Expenses 202,306 3,167,252 (2,964,946) 6.4% Net Income/(Loss) Before Other Revenue and Expenses 62,986 423,272 (360,286) 14.9% Other Income Unrealized Gain/(Loss) on Investments" (253,206) - (253,206) 0.0% Other Expenses HE & Improvements - 15,000 (15,000) 0.000 Depreciation Expense 6,278 Cost of Goods Sold (299) Net Income/(Loss) 1(196,199)1 408,272 1 (351,265) -48.15 ** This is a City of Fayetteville accounting entry that reverses in February '21 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ January 31, 2021 Town Center Year -to -Date Actual Budget Over/(Under) Budget o of Budget / Revenue Rental Revenue 5,858 350,250 (344,392) 1.7% Event Revenue 173 11,000 (10,827) 1.6% Parking Revenue 128 21,500 (21,372) 0.6% Interest and Investment Revenue 130 2,500 (2,370) 5.2% Total Revenue 6,290 385,250 (378,960) 1.6% Expenses Operating Expenses Rental Expenses 199 68,690 (68,491) 0.3% Event Expenses 255 11,000 (10,745) 2.3% Personnel 18,621 418,962 (400,341) 4.4% Sales & Marketing 150 19,300 (19,150) 0.8% Office and Administrative Expenses 27,835 290,570 (262,735) 9.6% Total Operating Expenses 47,061 808,522 (761,461) 5.8% Net Income/(Loss) Before Other Revenue and Expenses (40,771) (423,272) 382,501 9.6% Other Expenses FFE & Improvements - 140,000 (140,000) 100.0% Depreciation Expense 5,389 Net Income/(Loss) (46,160) (563,272) 517,112 1 8.2% Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ January 31, 2021 Cyclocross Events Year -to -Date Actual Budget Over/(Under) Budget o / of Budget Revenue Other Revenue Cyclocross Grant Funds 271,804 675,000 (403,196) 40.3% Cyclocross Events Revenue - 288,500 (288,500) 0.0% Interest and Investment Revenue 200 3,000 (2,800) 6.7% Total Revenue 272,004 966,500 (694,496) 28.1% Expenses Operating Expenses Office and Administrative 133 2,500 (2,367) 5.3% Cyclocross Events 205,315 1,342,089 (1,136,774) 15.3% Total Operating Expenses 205,449 1,344,589 (1,139,140) 15.3% Net Income/(Loss) 66,555 (378,089) 444,644 -17.6% Fayetteville A&P Commission Balance Sheet As of February 28, 2021 ASSETS Current Assets Cash 1,814,066 Investments 851,743 Accounts Receivable 248,276 Prepaid Expenses 18,196 Deposits 30,617 Visitors Guide Trade 4,001 Inventory Asset 12,201 Total Current Assets 2,979,101 Other Assets Capital Assets Furniture & Fixtures 96,641 Equipment 498,597 EF/CVB Building 940,410 EF/CVB Land 198,621 Building Additions 971,952 Walker -Stone House 1,167,218 Accumulated Depreciation (1,244,614) Total Capital Assets 2,628,825 Total Other Assets 2,628,825 TOTAL ASSETS 5,607,925 LIABILITIES AND EQUITY Current Liabilities Accounts Payable 46,984 Sales Tax Payable 757 Unearned Revenue 137,950 Subtotal: Current Liabilities 185,691 Total Liabilities 185,691 Equity Fund Balance 4,879,105 Temporarily Restricted Funds 478,862 Net Revenue Gain/(Loss) on Investments 4,373 Net Revenue without Cyclocross 6,522 Net Revenue for Cyclocross 53,372 64,267 Total Equity 5,422,234 TOTAL LIABILITIES AND EQUITY 5,607,925 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ February 28, 2021 CONSOLIDATED Year -to -Date Actual Budget Over/(Under) Budget %of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 489,432 3,460,576 (2,971,144) 14.1% Rental Revenue 6,608 350,250 (343,642) 1.9% Event Revenue 173 37,500 (37,327) 0.5% Visitor Center Store Revenue 1,076 45,258 (44,182) 2.4% Parking Revenue 244 21,500 (21,256) 1.1% Advertising Revenue - 8,000 (8,000) 0.0% WFF Cycling Coordinator Grant 11 31,190 (31,179) 0.0% Interest and Investment Revenue 2,931 21,500 (18,569) 13.6% Total Revenue 500,475 3,975,774 (3,475,299) 12.6% Expenses Operating Expenses Rental Expenses 342 68,690 (68,348) 0.5% Event Expenses 868 73,800 (68,348) 1.2% Visitor Center & Museum Store 3,174 41,560 (136,695) 7.6% Personnel 172,566 1,329,680 (273,390) 13.00o Sales & Marketing 95,141 961,675 (478,433) 9.9% Office and Administrative 81,831 593,369 (888,518) 13.8% Bond Payments 116,832 707,000 (590,168) 16.5% TheatreSquared Contribution - 200,000 (200,000) 0.0% Total Operating Expenses 470,755 3,975,774 (2,703,899) 11.8% Net Income/(Loss) Before Other Revenue and Expenses 29,720 - (771,400) 0.0% Other Income Unrealized Gain/(Loss) on Investments 4,373 0.0% Other Expenses FFE & Improvements - 155,000 (155,000) 0.0% Depreciation Expense 23,333 0.0% Cost of Goods Sold (136) 0.0% Net Income/(Loss) (without Cyclocross Grants) 10,895 (155,000) (639,597) -7.0% Unrealized Gain/(Loss) on Investments 4,373 Net Income/(Loss) Without Cyclocross Events 6,522 Net Income/(Loss) for Cyclocross Events 53,372 Total Net Income/(Loss) 164,267 Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ February 28, 2021 Experience Fayetteville Year -to -Date Actual Budget Over/(Under) Budget %of Budget Revenue Hotel, Motel, Restaurant Taxes Revenue 489,432 3,460,576 (2,971,144) 14.1% Event Revenue - 26,500 (26,500) 0.0% Visitor Center Store Revenue 1,076 45,258 (44,182) 2.4% Advertising Revenue - 8,000 (8,000) 0.0% WFF Cycling Coordinator Grant 11 31,190 (31,179) 0.0% Interest and Investment Revenue 2,686 19,000 (16,314) 14.1% Total Revenue 493,205 3,590,524 (3,097,319) 13.7% Expenses Operating Expenses Event Expenses 613 62,800 (62,187) 1.0% Visitor Center & Museum Store 3,174 41,560 (38,386) 7.6% Personnel 129,775 910,718 (780,943) 14.2% Sales & Marketing 94,991 942,375 (847,384) 10.1% Office and Administrative 36,093 302,799 (266,706) 11.9% Bond Payments 116,832 707,000 (590,168) 16.5% TheatreSquared Contribution - 200,000 (200,000) 0.0% Total Operating Expenses 381,478 3,167,252 (2,785,774) 12.0% Net Income/(Loss) Before Other Revenue and Expenses 111,728 423,272 (311,544) 26.4% Other Income Unrealized Gain/(Loss) on Investments 4,373 - 4,373 0.0% Other Expenses HE & Improvements - 15,000 (15,000) 0.0% Depreciation Expense 12,556 Cost of Goods Sold (136) Net Income/(Loss) 103,681 408,272 (308,964)1 25.4% Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ February 28, 2021 Town Center Year -to -Date Actual Budget Over/(Under) Budget o of Budget / Revenue Rental Revenue 6,608 350,250 (343,642) 1.9% Event Revenue 173 11,000 (10,827) 1.6% Parking Revenue 244 21,500 (21,256) 1.1% Interest and Investment Revenue 244 2,500 (2,256) 9.8% Total Revenue 7,270 385,250 (377,980) 1.9% Expenses Operating Expenses Rental Expenses 342 68,690 (68,348) 0.5% Event Expenses 255 11,000 (10,745) 2.3% Personnel 42,792 418,962 (376,170) 10.2% Sales & Marketing 150 19,300 (19,150) 0.8% Office and Administrative 45,738 290,570 (244,832) 15.7% Total Operating Expenses 89,277 808,522 (719,245) 11.0% Net Income/(Loss) Before Other Revenue and Expenses (82,008) (423,272) 341,264 19.4% Other Expenses FFE & Improvements - 140,000 (140,000) 100.0% Depreciation Expense 10,778 Net Income/(Loss) (92,786) (563,272) 470,486 1 16.5% Modified Accrual Fayetteville A and P Commission Statement of Budget, Revenue and Expense Year -to -Date @ February 28, 2021 Cyclocross Events Year -to -Date Actual Budget Over/(Under) Budget o / of Budget Revenue Other Revenue Cyclocross Grant Funds 271,804 675,000 (403,196) 40.3% Cyclocross Events Revenue - 288,500 (288,500) 0.0% Interest and Investment Revenue 374 3,000 (2,626) 12.5% Total Revenue 272,178 966,500 (694,322) 28.2% Expenses Operating Expenses Office and Administrative Expenses 133 2,500 (2,367) 5.3% Cyclocross Events 218,673 1,342,089 (1,123,416) 16.3% Total Operating Expenses 218,806 1,344,589 (1,125,783) 16.3% Net Income/(Loss) 53,372 (378,089) 431,461 -14.1% • C 0 01HEIiIUIS 0.89% 6.50% -3.37% C 0 0 6.67% % change over previous year INAIII -10.20% jan S I S apr I (may I jun jul I aug I sep Oct I nov I dec Monthly A&P Tax Collections 2021 ** 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 I� 0 00 0 0) 0 O 0 T- 0 N 0 (n 0 0 Ln 0 �0 0 � 0 00 0 0') T- TI- N N N N N N N N N N -10.20% change from 2020 ** This represents one half of the total HMR collections. The other half supports the Parks and Recreation department. 2.21% 0 VI 00140i • 6 C 01Fal I MW 18 1 an: 6.60% 0.75% C 0 011&18� 0 0 4.19% % change over previous year 40 i� -14.20% jan S S apr I (may I jun jul I aug I sep Oct I nov I dec Monthly A&P Tax Collections 2021 ** 777N S263,6651 -10.20% -18.43% 0 0 0 0 0 0 0 0 0 0 0 0 0 % change 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o from 2020 0 0 0 0 0 0 0 0 0 0 0 0 0 I-_ 00 0-) O T- N m L 00 0-) T- TI- N N N N N N N N N N ** This represents one half of the total HMR collections. The other half supports the Parks and Recreation department. Memo To: Molly Rawn, CEO, Fayetteville Advertising and Promotion Commission Fayetteville Advertising and Promotion Commissioners From: Jennifer Walker, VP Finance, Fayetteville A&P Commission Date: March 10, 2021 Re: Financial Policies Experience Fayetteville staff have drafted a set of recommended Financial Policies for the Commission's consideration at the March 15, 2021 meeting. Many of the practices included in these policies are referenced in the Employee Handbook to some degree, and most of the items are already in practice by Experience Fayetteville staff and commissioners. Below are a few highlights from the policies for the Commission's review: • Access to Records — we have proactively committed to our ongoing practice of being open and transparent with Experience Fayetteville records and information. • Approval thresholds — Payments greater than $5,000 require two signatures/approvals. Budget adjustments greater than $20,000 will continue to go to Commission for approval. • Operating Reserve — We are recommending a static Operating Reserve of approximately 90 days of operations. This is valued at approximately $1 Million. The operating reserve will be established out of the current fund balance of over $4 Million. As noted in the policies, this reserve is only able to be utilized with Commission approval and only in times of emergency to continue basic operations. • Capital Reserve — We are recommending a minimum reserve be established at $1 Million out of the current fund balance. All capital purchases beginning in 2022 would be funded out of the capital reserve. The reserve will be replenished each year out of operations at $100,000 annually unless otherwise directed by the Commission during the budget cycle. The Capital Spending Plan will be presented with the Annual Budget beginning with the next budget cycle. The two fund balance reserve requests above will leave approximately $2 Million in the unreserved fund balance. Recommendation: Staff recommends the commission vote to adopt the attached Financial Policies Experience Fayetteville Financial Policies Approved by the Fayetteville Advertising & Promotion Commission 3/15/2021 Table of Contents I. Ethical Considerations........................................................................................................................... 2 A. Conflict of Interest............................................................................................................................ 2 B. Gifts and Gratuities........................................................................................................................... 2 C. Access to Records............................................................................................................................. 2 II. Accounting Policies............................................................................................................................... 3 A. Monthly Close................................................................................................................................... 3 B. Recordkeeping and Retention Schedule........................................................................................... 3 III. Internal Controls............................................................................................................................... 4 A. Segregation of Duties........................................................................................................................ 4 B. Cross Training....................................................................................................................................5 C. Cash Handling....................................................................................................................................5 IV. Financial Planning and Reporting..................................................................................................... 5 A. Delegations....................................................................................................................................... 5 B. Budget Management........................................................................................................................ 5 C. Internal Financial Reporting..............................................................................................................6 D. Audit..................................................................................................................................................6 V. Revenue and Accounts Receivable....................................................................................................... 6 VI. Expense and Accounts Payable......................................................................................................... 7 A. Approval Authority............................................................................................................................ 7 B. Purchases and Procurement............................................................................................................. 7 C. Accounts Payable Processing............................................................................................................ 8 D. Credit Cards.......................................................................................................................................9 E. Payroll Processing............................................................................................................................. 9 VII. Asset Management...........................................................................................................................9 VIII. Reserves..........................................................................................................................................10 A. Operating Reserve.......................................................................................................................... 10 B. Capital Reserve................................................................................................................................10 Financial Policy March 2021 Page 1 of 10 Ethical Considerations Fayetteville Advertising & Promotion Commission d/b/a Experience Fayetteville is a component unit of the City of Fayetteville funded primarily by the Hotel Motel & Restaurant Tax, and as such its activities, records, and accounts are subject to audit and scrutiny. The following policies represent long-standing principles, traditions, and practices that have guided the Organization in maintaining financial stability. A. Conflict of Interest Experience Fayetteville commissioners, employees and agents have an obligation to perform their duties in a way that avoids any conflicts of interest and minimizes the perceptions of conflicts of interest. Although we cannot list every activity or relationship that would create either an actual conflict of interest or a potential conflict of interest, examples of activities that violate this policy include the following: working for a competitor, customer, or vendor as a part-time employee, full-time employee, or independent contractor, or in any capacity; working for, sitting on the board of, or owning interest in an organization receiving funding from Experience Fayetteville; organizing an event receiving funding from Experience Fayetteville; using the resources of Experience Fayetteville for personal gain. Procedures for handling potential or actual conflicts of interest are in the Employee Handbook and operating procedures. B. Gifts and Gratuities No Experience Fayetteville employee may accept for individual or personal benefit any gift or gratuity from a current or potential supplier of goods or services to Experience Fayetteville. This does not include standard promotional items provided by vendors, reasonable entertainment provided by vendors or standard hospitality services provided by Experience Fayetteville's constituency. C. Access to Records Experience Fayetteville aims to be open and accountable to citizens, vendors and customers. We strive to make information easy to find for other interested parties such as partners, visitors, and members of local communities. We seek to provide information in a way in which reflects the wishes and needs of customers and other interested people. We strive to provide information about how we are governed, our finances and how we achieve value for money. We publish and provide the following information in different ways and formats to meet the diverse needs of our customers and interested parties. In many cases we use our website to share information, but we may print some documents such as leaflets and guidebooks. We also use social media channels to share information. • Annual Reports • Audited Annual Financial Statements • Adopted Budget • Monthly Financial Reports Financial Policy March 2021 Page 2 of 10 • Tax Revenue Reports • Commission Meeting Minutes • Governing Documents Individuals and groups can request information about Experience Fayetteville that is not routinely published. We will comply with these requests wherever possible. In addition, any record allowed under Arkansas FOIA regulations will be provided upon request. II. Accounting Policies All accounting for the organization shall conform to Government Accounting Standard Board (GASB), using the fund basis of accounting. A. Monthly Close Accounting records will be closed on a monthly basis, within 20 days of month end. The following items shall be performed on a monthly basis: • Reconciliation of Bank Accounts (quarterly for short-term and long-term investments) • Reconciliation of Accounts Payable • Reconciliation of Accounts Receivable • Reconciliation of Organization's Credit Card account and related expenses • Fixed Asset reconciliation and depreciation entries • Quarterly reconciliation of all other miscellaneous Balance Sheet accounts, including amortization of prepaid expenses and revenue recognition entries as applicable B. Recordkeeping and Retention Schedule Experience Fayetteville retains records as required by law and destroys them when appropriate. The Organization's staff, members of the Commission, committee members and outsiders (volunteers or independent contractors) are required to honor the following rules: • Paper or electronic documents indicated under the terms for retention in the following section will be stored in a secure filing cabinet and/or Experience Fayetteville's server and backed up appropriately; • All other paper documents may be destroyed after three years; • All other electronic documents may be deleted from all individual computers, data bases, networks, and back-up storage after one year; • No paper or electronic documents will be destroyed or deleted if pertinent to any ongoing or anticipated government investigation or proceeding or private litigation (check with legal counsel for any current or foreseen litigation if employees have not been notified); and Financial Policy March 2021 Page 3 of 10 • No paper or electronic documents will be destroyed or deleted as required to comply with any other applicable financial standard. Experience Fayetteville follows the document retention schedule outlined below. Documents that are not listed but are substantially similar to those listed in the schedule will be retained for the appropriate length of time. Type of Document Retention Schedule Legal records, bylaws, minutes, commission reports Permanent Audit reports, financial statements and tax records Permanent Fixed Asset Records Permanent Legal documents and related correspondence Permanent Financial Records, including accounts payable, accounts receivable, general ledger, bank statements, checks, deposits 7 years Payroll and Personnel Records 7 years Membership Dues records 7 years Contracts and leases, expired 5 years Insurance Policies, expired 7 years III. Internal Controls Experience Fayetteville employs several safeguards to ensure that financial transactions are properly authorized, appropriated, executed, and recorded. A. Segregation of Duties The following guidelines have been established, to reduce the chance for fraud by requiring two or more people in each process and to eliminate unintentional errors. • The person receiving and processing payments shall not be the person to approve the write-off of uncollectable accounts. • The person depositing cash shall not be the person to reconcile the bank statement. • The person who processes the payroll shall not be the person to distribute paper payroll checks. • The person responsible for approving invoices for payment should not be the person responsible for cutting the checks to pay those invoices. • Checks and electronic payments of $5,000 or more will require two (2) signatures/approvals. • The person responsible for depositing checks and cutting checks shall not be the person to reconcile the bank statement and review for irregularities. • All journal entries will be reviewed by someone other than the person who recorded them. Financial Policy March 2021 Page 4 of 10 B. Cross Training Individuals involved in the financial process will be cross trained so that they can perform other functions in the case of an extended employee absence. In addition, these employees are required to take five consecutive business days of leave per year. C. Cash Handling The Finance office is responsible for ensuring that all bank accounts are reconciled on a regular basis. The Finance office prepares a monthly bank statement review and reconciliation. The reconciliation is reviewed, initialed, and dated by a different Finance representative or the CEO. Bank accounts will include the following signatories: CEO, Commission Chair, and Director of Operations. The Finance office is responsible for ensuring check signatory information with banking institutions is up to date. Experience Fayetteville reserves the right to charge a service fee for returned checks. Stale dated checks will not be kept on the Experience Fayetteville books after twelve (12) months. Stale checks will be turned over to the Arkansas State Auditor's office through the Unclaimed Property program. Checks written to "CASH" shall be avoided unless needed for (a) petty cash replacement checks (b) increase to cash held in safe for specific large cash bar events (c) other reason documented and approved in writing by both the CEO and the Commission Chair. IV. Financial Planning and Reporting The organization's financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and the Governmental Accounting Standards Board (GASB). Experience Fayetteville's fiscal year is January 1 to December 31. A. Delegations The CEO shall have all authority to approve all published material and be the official signatory for all official correspondences for the Fayetteville A & P Commission. B. Budget Management The organization's annual budget is prepared and approved annually for all departments. The budget is prepared by the CEO in conjunction with other applicable Experience Fayetteville staff and approved by the Commission prior to December 31. Financial Policy March 2021 Page 5 of 10 A budget adjustment is a change in the authorized budget, either revenue or expense. A budget adjustment transfers a specific dollar amount from one line item to another, thereby decreasing one budget line and increasing another line. Since it is a change in allocated funds, great care must be taken and only changes for good reason will be accepted. Budget adjustments greater than $20,000 must be approved by the Fayetteville A & P Commission. It is the responsibility of the Finance office to prepare a budget adjustment when required. The adjustment is presented to the CEO as an agenda item. The CEO is responsible for placing the adjustment on the agenda of the Fayetteville A & P Commission meeting. Budget adjustments of $20,000 or less may be authorized by the CEO. It is the responsibility of the Finance office to prepare the budget adjustment when required. Budget increases that include new appropriations from the fund balance must be approved by the A & P Commission. C. Internal Financial Reporting Financial reports, based on the modified accrual method of accounting, should be prepared and presented on a monthly basis to the CEO. Current financial statements will be presented at each Commission Meeting, including a year -over -year comparative balance sheet and a statement of activities versus budget with year -over -year comparison. D. Audit Experience Fayetteville will hire an independent Certified Public Accountant on an annual basis to audit the organization's financial statements. The audit shall be completed within six (6) months of the end of the fiscal year. The CEO or designated staff shall be responsible for overseeing the implementation of the annual financial audit. The CEO shall recommend to the Commission for approval, the selection of a firm to perform the annual audit. The Commission shall assist when necessary in the audit preparation and provide oversight. A representative of the audit firm shall be required to attend the annual presentation to the Commission. A complete and audited set of financial statements will be provided to the City of Fayetteville and the A&P Commission on an annual basis. V. Revenue and Accounts Receivable On a regular basis, Experience Fayetteville will issue invoices to various community partners and convention groups for cooperative marketing programs, Visitors Guide advertising, Visitor Center retail sales, registration assistance, sponsorships, etc. Financial Policy March 2021 Page 6 of 10 All invoices shall be created in the accounting software. Outstanding/unpaid invoices are reviewed monthly by the supervisor in charge of the revenue stream. Experience Fayetteville will make reasonable efforts to collect on outstanding receivables including mailing paper invoices/statements, phone calls and/or email communications. • After 30 days, collection efforts will begin by sending a past -due notice to the customer. • After 60 days, a formal letter may be sent • After 120 days, the invoice is eligible to be turned over to an outside collection agency and written off. If a receivable is deemed uncollectable, the balance and collection attempts will be discussed with the appropriate parties prior to write-off. The CEO will authorize any write-offs greater than $500. Invoices written off that are dated in the current year will be treated as a reduction of the appropriate revenue account. Invoices written off that are dated for a prior year will be treated as bad debt. VI. Expense and Accounts Payable The CEO will be responsible for oversight, control and compliance of Experience Fayetteville's expenses and related policies. Policies regarding employee expense reports, corporate credit cards, employee travel and client entertainment, are outlined in Experience Fayetteville's Travel and Client Development Policy. A. Approval Authority The Fayetteville A & P Commission approves the fiscal year budget on an annual basis. Items included in the approved budget are considered formally approved which will allow for staff to act nimbly to execute initiatives. For non -budgeted expenses, advance approval for the expenditure must be received at the following levels: CEO may approve expenditures up to $20,000 Commission approval required for all expenditures greater than $20,000 The CEO and the Commission Chair are the only individuals with the authority to sign contracts on behalf of Experience Fayetteville. The financial implications of the contract must be included in the budget and/or approved at the appropriate level. B. Purchases and Procurement Any other expenditure in excess of $5,000 for the purchase of a single item should have quotes from three (3) suppliers. These quotes will be reviewed by the CEO and the bid award must be approved in advance of procurement. Exceptions to this policy will be made for the following types of expenditures: Registration Fees Postage/Freight Financial Policy March 2021 Page 7 of 10 Overhead expenses (such as rent, telephone, etc.) Advertising Travel Expenses (see Travel and Entertainment Policy) Membership Dues and Subscriptions Co-op Opportunities Dues and Membership Advertising Client Entertainment Professional Services Items purchased for resale and promotion When soliciting quotes: • A Request should be sent to qualified vendors. The request shall include specifications, instructions, due date, and any relevant information. • It is preferable that written bids should be received from vendors, but verbal quotes will also be documented and considered. The bids should include the vendor's understanding of the requirements, due dates, pricing and payment terms. • Once bids are received, a decision upon awarding the bid will be based upon many factors including price, quality, delivery capabilities, function and other relevant factors. It is not necessary for Experience Fayetteville to accept the low bid if it is a determined that a different vendor can provide a higher quality of service. • The CEO should sign off on any awarded bid. This approval can be obtained prior to completion of the Purchase Order Request Form or as part of the normal purchase approval process. All contracts over the amount of $20,000 must be approved by the Commission. C. Accounts Payable Processing Invoices presented for payment will be processed in a timely manner upon completion of services or receipt of goods. An invoice, check request, or approved contract is required for payment. Check requests should only be utilized for payment of deposits when an invoice is unavailable. All invoices will be approved for payment by the CEO. Payment of all organizational expenditures should require the following approvals: • Paper checks over $5,000 require signatures from two of the approved signers on the account. Electronic payments over $5,000 require two approvals. Examples of electronic payments are ACH payments, wire transfers and electronic check processing. This does not apply to routine payroll processing. • On a monthly basis, the Commission Chair shall review and approve the expense reimbursement report and credit card expense report for the CEO. Financial Policy March 2021 Page 8 of 10 D. Credit Cards Experience Fayetteville purchasing (credit) cards are issued to employees on an as -needed basis. New card issues must be approved by the CEO. Cards have set credit limits, and access and limits are administered by the Finance office. Each cardholder is responsible for reconciling the credit card monthly and providing an expense report with receipts and supervisor signature to the Finance office. Employees must follow all purchasing policies and procedures when using the credit card as a payment method. E. Payroll Processing All employees, exempt and non-exempt, are required to record time worked, holidays, and leave taken for payroll, benefits tracking, and cost allocation purposes. Any payroll additions or changes are initiated and approved by the CEO. Any payroll addition or change relating to the CEO must be approved by the Chairman of the Commission. Procedures related to timekeeping and personnel records are included in Experience Fayetteville's Employee Handbook. VII. Asset Management The following information provides an overview of the accounting and control of assets. Chapter 59, Section 14-59-107, of the Arkansas Statutes states that all municipalities shall establish by major category and maintain, as a minimum, a listing of all fixed assets and equipment owned by the municipality. The listing shall contain as a minimum: 1. Brief description; 2. Serial number, if available; 3. Date of acquisition; and 4. Cost of property Such fixed asset and equipment records shall constitute a part of the general records of Experience Fayetteville and, accordingly, shall be made available for utilization by the auditors at the time of audit. Items with a purchase price of $5,000 or more, and useful life of 3 or more years, are eligible for capitalization. The Finance office will maintain depreciation and accumulated depreciation will be determined in compliance with IRS regulations, and will be calculated using the straight-line method of depreciation. In addition, the Finance office shall also maintain all addition and deletion records regarding fixed asset transactions. On an annual basis, the Finance office will review the various charges which have been recorded in all capital outlay accounts. This review will verify that the charges meet all the criteria of a fixed asset. An Financial Policy March 2021 Page 9 of 10 asset number will be assigned, and the asset will be added to the fixed asset list. A physical inventory of property and equipment will be taken annually. VIII. Reserves A key element of prudent financial planning is to ensure that sufficient funding is available for current operating, capital and debt service needs. Additionally, fiscal responsibility requires anticipating the likelihood of, and preparing for, unforeseen events. Experience Fayetteville will at all times strive to have sufficient funding available to meet its operating, capital and debt service obligations. This funding will be accumulated and maintained in order to pay for operating expenses and capital expenditures in a manner consistent with its operating budget and capital spending plan, respectively, and avoid significant changes in published rates due to changes in cash flow requirements. The Commission may designate specific reserves and maintain minimum balances consistent with statutory obligations that it has determined to be in the best interest of the organization. The policy directives outlined below are intended to ensure Experience Fayetteville has sufficient funds to meet current and future needs. Reserve balances will be reviewed by staff and the Commission annually during the budget and capital spending plan process. Experience Fayetteville's reserves can be classified into three categories that include restricted cash and investments (held by the City of Fayetteville), capital reserve funds, and operating reserve funds. A. Operating Reserve Experience Fayetteville will maintain a minimum reserve of ninety (90) days of annual regular operating expenditures in Undesignated Fund Balance. The minimum unreserved fund balance cannot be reduced without specific vote of the Commission. These funds are set aside to stabilize the Organization's finances by providing a cushion against unexpected events and losses of income. The funds should be used only in times of emergency or fiscal and economic hardship. B. Capital Reserve Experience Fayetteville will maintain a capital reserve necessary to fund the replacement and expansion of the Organization's buildings and equipment. This reserve will be established at $1,000,000. The Organization will contribute annually to the reserve fund in the amount $100,000 out of operations. Purchases funded out of the capital reserve must be approved by the Commission and will presented with the annual budget when possible. Financial Policy March 2021 Page 10 of 10 Overall Users: Overall Sessions: Organic Search (Users): 13317 Landing Page Views: 9119 Online Guide Requests: 817 1 �11 1 1 E PDFM0 Fimipbooko. F�l MaiP.910I 114 .7i�11i'RILf: 40m2% � • 5.40/, 40/o CiiEu�«E __ . ............... VISITOR'rS GUIDE 009%p7 oys�UNp�, � FAYE�VILE ivill!�Y!IIIIIINirIII�IIINIIII■IIII�IIII�J�I Pf = 1 N 5150,000 510o.a4U E, 2020 Media Spend - Plan GIs. Actual Planned Media Spend: $515,107 Actual Media Spend: S245,938 $49,279 $18,820 aa,a�a 54, j04 Geo-fencing; XNA- Spring Flight: 7 TLS-NWA Hotels Markets S74,979 7 36,988 5179,154 $42, 353 $74,+i48 S29,404 Cable TV LR-TLS Connected TV. 7 Summer Flight: 7 Fall Fxagbv 7 Markets Q3/4 Regional Q3/4 NWA Media Markets Markets Media: 4 markets SPre-Covid Media Plan EPost-Covid Actual HA11Y PHOGHAM - OVEHVIEW ............................................................................................................................................................. Multi -channel messaging aimed at Fayetteville residents to promote pickup and de local r �vca Jpdc InfoE PtP_S(] t r nt during pandemic r wlmm�.Amlb& .... ....... ........ e e •■•r.1• Organic social meth Disniav advertising a e e e1reme e e livery at Arictions. LUc e ith a boosting budget M$ •1re11111• vith existing ExpFay contra Calling all NWA small business owners! suPPVRT LvGF RESTAURANTS, ORDER TAKEOL DR DELIVERY_ Click to Learn More. #Supporti-ocaINWA SUPPOQT LOC A o LNW KEEP YOUR MASK ON. L ( A (J KEEP OUR COMMUNITY HEALTHY. KEEP BEING COOL. i ur Restaurant Follows 6.13est Health Practices i I I il valilm a I U • - - 5,896* I EAT SLEEP EXPERIENCE DOWNTOWN GUIDE • - • . • 1:07 3% *87% • 4/15-7/15101 4' 7 • iliif it �►...., �.��. ities ✓JQI�#1� `*fir rppfYi++lhly�{41�+►7�CV .��r•�y.� 1, ALM �r1+'CJ rl�*fxi i}��fr+7..r Rif +M+i Trai ShFpi{i ap1t8-.� •»il[•r• wallas/Fr Tne"s : 4 &� —3 % Channel 2% Spend A Little,, Help A Lot Now more than ever, one of the best parts of %etteviIle - our local restaurants and their amazing staff - needs our help. So, lets come together as a community to shover our support from the safety of our homes and vehicles! If Fayetteville residents do their part by ordering takeout or deliverer from time to time, we can help focal businesses in a dig way! So, we've put together resources that can help our favorite restaurants through this pandemic and show support for our community. Below are links to help you decide where to order takeout, helpful information for relief efforts and custom-made video conference backgrounds featuring some of our favorite locations, activities and art around town. Let's support #FayettevilleTogether in whatever way we can! Here's how: Spend a Little If you want to support your favorite local restaurant, right now the best way is to order curbside pickup or delivery. So, we're Keeping a running list of participating restaurants in town. Click to learn more! Share Whether or not you can support restaurants financially at this time, sharing this message of VISITOR'S GUIDE Get your FREE visitor's Guide full of insider tips and guides to hotels, dining, entertainment, the arts, and more G3/G4 2020 DIGITAL (LIGHT: Aug 10- NOV 26 NWA Pre -roll Food Little Rock Connected TV ORA Tulsa Display Public Art Joplin acebook/instagram Cycling Kansas City tatic andvideo) Outdoors �7 job,,, IN FAYETTEVILLE • Nomad's Trailside rat �P _ • US IN FAYETTEV I LLE . � w 'Setter Together' by Matt Miller IN FAYETTEVILLE Big Box Karaok w mom WIN 1 r IN FAYETTEVILLE, WilsonPark illiflillmli 4 1 qw I , g(,lib ................................ Display: Impression PF w ClickZ- 4,2�-, CTR: i 0.120/�i DIGITAL (LIGHT: HIPOHTING ............... ................ Pre -roll: Connected TV: Social: i Impressionism. �, � i � Impression ' � Impressions. ' Clicksm Clicks Clicks: ' CTR: i v ' , CTR i � ' . CT Video Completion: de om etiono. Post eaction.m 'Video Completion: NWA PHIMHoll 111GHTE0 12/14 1/3 essions. Click CT � ' � LAVOR IN FAYETTEVILL Vide mplet'lo u wm J Aft I S C H b�*IET 08 _ Vol 3ERRMY GAWTHROP GAF }nRLIII� WOOD STONE PIZZA r { M JAN MJUI JULYDE Overall Users: 94178 Overall Sessions: 11119 Organic Search (Users): 47,1 Landing Page Views: 16 '0 11,1 ,02 Online Guide Requests: 0 07 -A 7 Y( I,,=: 3,6 - �t I INIIIIIIIIII[W Res'tauranlWn NWA Cycling in Denver, Colo. Downtown BusinesseIi WHEN YOU'RE READY, • q j�yY. � �� J - 5 � F MN UPCIHURCM LE A([ IEVIL FP I l0 1 Click to Learn More ' *! +oars NWA WSWE', READY New Campaign(s)! Time to replace Find Away First: "When You're Ready, We're Ready" ..... 12:�G AND �r A CI W r If