City Council - Regular Meeting

Go ahead and call the, work session to order. This is the, VCBB work session with the city council of these. We have Sherry Forbes present. Yep. Alright.

Missing council member, Devin. Council member is absent and excused. Council member

Foster.

Foster is unable to be online this evening.

Okay.

But she is excused as well. She did notify us.

Okay. And this, this work session is, been in prep for, we got the 2024 audit, everything, there. The only thing that the council did not receive was the, five zero five budget that we are expecting today. So, you wanna go ahead and present? That'd be great.

Good evening, everybody. I

have

a couple of papers to pass out here. Okay. Let me start by saying thank you for having me and allowing me to come back again tonight after, multiple times of working this out. I think that the ultimate goal for all of us is that we work together to find the most success that we can in order to support the tourism industry here in Valdez, and that is my goal. So I'm going to start with just a quick little once over.

What you guys have received in handouts is both the budget or the $5.00 5 that's called the a la carte budget requested by the city mayor, and you guys will find also a presentation document. I'm just gonna kinda go over one quick thing for you guys prior to that. Give me just one second. So let's start with this presentation results. So the elephant in the room was the audit that was requested to be received prior.

And now I would like to just kind of read through for you guys this presentation.

So please hold. Please be

patient with me, but allow me to finish this. My intention is to give you the information this way and on the screen as well as having a physical copy so you can hear it three ways. Alright. Upon discussion with city manager DeVall and mayor Fleming, ACVB now understands all those, understands and is willing and pleased to commit a deadline of September 1 delivery for all future audits. This was something that came to our attention previously in a meeting with, city manager Duvall and mayor Fleming. Done. It will be in our new continuity plan. It's already in our process and updated accordingly. So going forward, our intention is September 1 of every year, you guys have the budget in hand.

Thank you.

I did want to go ahead and give you guys a couple of updated highlights on that audit just to remind you that it was very successful. We got flying colors. So and significant accounting policies. No matter has come to no matters have come to our attention that would require us under professional standards to inform you about the methods used, etcetera, etcetera. You'll see financial disclosure under significant unusual transactions. There were no significant unusual transactions identified. Ignore this part that says draft. It's just the revision. This is what was presented before they signed it. Identified or suspected fraud.

We've identified or have obtained no information that indicates fraud may have occurred. Under significant difficulties encountered during the audit, we encountered no difficulties in dealing with management related to the performance of the audit. Under disagreement with manager management, it says no such disagreements arose during the course of the audit. In management's consultation with other accountants, it said, we did not disagree with any work performed by Melissa Hartford that was seen during the audit. And then other significant matters, findings, or issues, it says that none of the matters discussed resulted in a condition to our retention as ACV's auditor.

So I just wanted to let you guys know, upfront kind of prepare you by answering some questions first so that, we're full freely full fully free to just revise the budget as we presented. So regarding this budget coming up, mayor Fleming and city manager Duvall asked for an a la carte budget to be prepared. Because this is another budget request outside of our additional three budgets that were prepared for myself previous to the request for the a la carte. We're having the city review this budget first, and the recommendation will then go to our board for approval. This process makes way more sense than having the board approve a bunch of different budgets and then come back with those possibilities.

The budget was requested to be prepared for December 3. So here it is for you now. This preparation of the budget is just a gentle reminder. It can take an average of two to six months to produce on a normal cycle. So I just want you guys to understand how hard we've worked to accomplish the requests that you've given us, and that was our first goal, to show you that not only do we intend to seek transparency, accountability, and collaborative energy, but we're also we're we're putting aside everything else to make sure that this is successful.

I'd like to show you guys the timeline, which was 10:10. The work session was scheduled. On 10:16, council asked for these deliverables. Number one, they wanna rewrite the original approved budget and reduce that budget over half, maintain remove the main source of revenue or a main a main source, and create an entirely new budget with 505,000 contribution in under two weeks. And I I think the timeline is important for you guys to understand.

Also, we were I had to create a new presentation that comes with that, and a good presentation when I deliver it takes between sixteen and eighty hours of work. I know I'm kind of an a student, but that is still kind of the norm. And, have all that voted on a process by our board, which has a, had a requirement of approximately a week to approve and then supply that to the city with enough time for the council to post it and review it prior to October 27. By the way, now I know better. If you guys request it to a specific date, I'll have to go backwards three days.

Now we know, just to make sure that the city council gets it, in a timely fashion. Okay. And going forward, an detailed event brief for each proposed item outside of the submitted documents and then an audit in the annual report. And this is first of all, I would like to apologize council member Green for not supplying his request to create and provide concise event briefs. It would have been another week or two's worth of work, and we were just truly unable to complete the task in timely matter.

And I just wanted to make sure that that was said. Also, right after that, I went to ATA conference and was working on budgets all hours. We went to the city council on the twenty seventh and told them we just couldn't simply pull it together with all that stuff that's going on to try to complete in that time and then have it, approved. 11:11, we went to a meeting with mayor Fleming and, council sorry, city manager, Duvall, and we were asked, is it with one l or two l's, Nate? Okay. Sorry about that. We were asked to create this a la carte budget to be present presented on December 3 for consideration. Also guaranteed was the deliverable of the audit prior to the next scheduled meeting, which we have provided. Please note that this meant creating another presentation. So here we are today.

We are doing our best. We've been asked multiple times for different things, including deliverables and deliverable dates. Examples include last year's budget request to move towards a five years and 50% support that was asked by council member Love, as well, what council member Love had just recently asked for in the, in the '6 10/16 deliverable, and what the city clerk sent us as requested doc documents didn't match. So what we're getting is a little bit of in inconsistency there that we're gonna wanna work on as a team to make sure that we are getting what you've asked of us and that that's written documented so that I have that accountability as well. In short, we've been jumping through hoops to give you guys deliverables with unrealistic timelines in some capacity.

And, that's just the fact is it may be that some of our members weren't aware that it takes time to accomplish the tasks. We just wanted to make sure that you know that we worked hard to meet the deadlines. I also ask that you guys represent support and encouragement that we need because we've been under a lot of direct attack even from what feels like city council and staff members. Okay. And for the budget review.

So when we presented and submitted the original raw financials to date, we weren't, intending that they were gonna go into the packet. That was, specifically noted as raw financials on the document. So because of the second half of my presentation being cut, I wasn't really able to explain those financials fully. And for the record, at least 85,000 plus of that budget that you saw was actually supposed to be recognized in 2026 and had not been done by our accountant yet. So just in all in all, I guess that's what I'm saying is we'll work towards making sure that this packet is accurate and has specific unapproved financials kept out of that packet.

So I also would like to bring a couple more things to mind just prior to the budget itself is the bed tax in number 41100. And you guys are welcome to carry along with the budget next sort of if you can do those two things at once if it's easier than mine. I'm not really a multitasker. But so for bed tax, I'd like to clarify a couple of things. So Airbnb tax revenue in 2022, when you guys look at the graphs that, city manager Duval kindly created, which were fantastic, you will see a number on these, the bed tax previously includes Airbnb.

I'm not sure how far back that is, but at least if you can see on this document here, which I was provided with when I came on, I don't know where it came from. I'm assuming it was it aligns with what the city had given us. So this shows you in 2022, the bed tax numbers actually at that time included the bed the Airbnbs. So that should be considered when going forward as far as the numbers. Just wanna make sure that you guys are sure that that that is accurate. If you're looking here, you're seeing these numbers as soon as 2022 hit.

Sorry. Director Harris, one second on Correct me if I'm wrong. Think maybe he's his finance director. Airbnbs were not in 2020. We haven't collected Airbnb taxes for the Fed tax.

Okay.

And when did that did that we start collecting on Airbnb?

The ordinance was 2023. Thank you, Luis.

The ordinance was 2023. So we started collecting in 2023.

Not all of them

are platforms still haven't been remitting consistently. So there's you can talk to this more.

It's on

our system still.

Yes.

We haven't really had significant Airbnb tax revenue in our bed tax, correct? That's what I

Jordan, can you clarify that for me? Because what I have here is actually listed at $13,317.46 and that was in 2022, and it had a list of bed excuse me. It had a list of Airbnb's, on the left hand side of this, which I didn't wasn't able to make fit on the screen. But that's actually what it said that this source of funding right here that you're seeing 1,012 thousand, and the total of 13,000 was included on this 22. So for clarification, I'm not sure if this is specific.

Yeah. I'll take what's the data.

But it's probably true. There were a number of Airbnbs who were self reporting prior to the code inclusion because they interpreted as a BNB. So that without looking at the numbers that could be correct, but

Okay. All right. So just to let you know that may or may not have had an effect on the revenue previously. I just want to clarify that so you guys can see it. Also just wanted one more clarification on city and sponsored events.

When I look at this and I see and you're looking at the graph as far as city sponsored events and events and then you were to look across an economic development, I do think it should be important to note the fact that when there was an increase in economic development funds that you would see a significant increase the next year in bed tax, and it's just a notable portion of the graph that I wanted to bring to your attention. You guys have already seen this contribution graph as it goes through, and you can see that we pretty much had a benchmark of steady all the way through, as well as the fact that I do wanna kinda give you guys some information about Airbnb's because I think it's pertinent to us to have that be considered. Valvice has about a 100 Airbnb. This was a random Internet search, so perhaps this is AI that shared this with us. About a 100, and that's about the best that we can do other than going on Airbnb and finding out ourselves.

Sitka had about 88. So the reason why I bring this to your attention is because it looks like as a report in 2024 so 2025 indicated that the 2024 total short term rental for Sitka was approximately 1,000,513 and $57, which was a 19% increase. So just to let you know, that comes to roughly 90,091 thousand in revenue, tax revenue, which I know previously yesterday someone had said that's kind of a small number, but a huge number for us because that extra 100,000 goes right back into marketing dollars once the operational costs have been covered from the organization. Alright. So let me skip along, and I just wanna show you guys that technically, I'm just gonna push through this and let you guys read the paperwork later, but the concept that I'm giving you right now is that you are seeing an increase in Airbnb based on the action data.

This data is actually taken from an organization called Key Data Insights, and these reports show a decent increase. It also shows when you look at the ADR rate for hotel Airbnb taxes has gone up. You see quite a significant decrease across the board, and that was in the month of March. And if you guys don't remember correctly, Mount Spur was going on, so we did see some numbers go down as well as other factors, which we kind of reviewed at the last meeting at our last work session. I also just want you guys to take a note to see that this is along with the average, and it looks like in some areas a little higher.

Long story short, let's see, 18 active rentals, and another 20. Hi, Jimmy. So this point right here says that in Cordova, I wanted just to bring your attention just the fact that this Airbnb booking is through Valdez Cordova market. So there's about 18 to 20 of those Airbnbs will have been Cordova's market, which could affect our numbers, but needs to be said. Alright.

So you've seen a daily booking window increase of let's see. This was 11/04/2025 through 12/31/2025. You're seeing ADR go up to 270 from the original, and that's average daily rate. In case you guys are are not really familiar with the terms, our guest nights have gone down, but the average length of stay and booking window has increased. So overall, you're seeing positive results, and the benchmark eventually shows that our occupancy was down through these past, what, six months.

We have here nine oh, no. That's the full year. 09/01/2024 through 03/3125. That again was from key data insights. This shows that we were down about 1.3%, but actually surrounding areas, etcetera, are down around 8% for the year average, and our ADR was up, so there was a huge increase in revenue. I know that was a mouthful, but that's all really important to show you guys that this is a huge source of funds that haven't been tapped yet. And since I didn't have time to talk about that earlier, I had to shove it in here. Alright. Financial forecasting. So you guys are probably fairly familiar with it, but this is something that is both a mix of quantitative models and qualitative insights.

When we have quantitative models, you're gonna see basically, this will be historical numbers. You can see there's gonna be historical trends, statistical methods, numerical data, and with the qualitative insights, what we have that also adds a well balanced picture because what you guys are getting is, as mayor Fleming said yesterday, well, how do we know the numbers? What what are we seeing? We're seeing med tax. That's all we have as an example right now.

What are the other elements? And there are some quantitative models, but really the qualitative insights are gonna assist you guys in understanding the value of what we're giving and whether or not we're giving it. So I'm gonna encourage us to see a couple notes here. Occupation sorry. Occupancy numbers are generally down across the state. I'm bumping that. Okay. Scott McCray said midsummer, and you guys will see whoops. Let me just bump the button. Roughly. Wait a minute. Where did I go? I lost my numbers here. Yeah. I'm just gonna it's gonna take a month to get there.

That's why I'm talking fast. I have to cover a lot without you guys falling asleep on me. Alright. So occupancy number is generally down. So Scott McCray had said the occupancy rates just so you guys know, he's the CEO and president of Explore Fairbanks. He said that the occupancy rates at local hotels and bed tax revenue were showing a decline. End of this point means that he says that it looks like we're overall seeing a decline from last summer. So just a heads up, Fairbanks saw that. Anchorage saw this. Hotel stays were down about 5% in May, says Jack Bonney.

And statewide in Alaska, ATIA also quoted that we are seeing overall numbers slightly down compared to previous years. Now I would like to talk about revenue and expenses for CVBs and chambers because this got a point. The borough assembly gives Ketchikan visitors $250,000 to promote Ketchikan tourism and offer visitor information and additional. Stacy Simpson, you guys can go ahead and review this later too as well if if I'm going too fast. I apologize.

But this is actually, from the city of Ketchikan. It looks like $350,000 was approved to fund marketing, and promotional efforts. Visitor services, Sitka says that they pay, city of Sitka pays the chamber 300,000 to manage visit Sitka. And if you guys aren't familiar, there has been across the state a lot of issues with the CVB, the DMO, and the chambers trying to figure out what their role is, what their structure, and what the money is that they should be spending. They received a supplemental appropriation of 275,000 last year just to cover visit Sitka, not including the chamber.

So looking at other similar locations on ProPublica, keep in mind these are twenty twenty three, twenty twenty four years numbers. We're seeing from Sitka chamber revenue, 800 and some. Expenses, about 800. Homer, 2024, revenue is about 500 and some. Expenses were about 715. My assumption is this might be boat raffle fundraiser related. Matsu CVB 2024, 938,000. Expenses around 900,000. So you're looking at revenue for Seward 2023, 551,000. Expenses, 674,000.

We're looking at revenue here too. Also note that the net income seems to be a little flexible, and my understanding is that with DMOs and CDBs, that type of thing, that it is often the case that you might see some net income reduction, although it never you can never tell because we don't know what the purpose of it is without more data. Revenue, 865. Expenses, 941. Soldotna, $7.97 and $8.21. I'm just looking at these ballpark numbers, twenty twenty four, you're looking at Whittier's chamber. That's a small chamber. 688,000. Expenses, 6 764. So the purpose of this is to just give you guys that number and now present you with the a la carte budget.

I'm gonna go ahead and show that to you Right now, just keeping in mind that we did also, I guess, last thing that goes backwards was that we were looking at lower numbers statewide. Similar sit Sitka City saw 8% down over the summer. We have a new administration that came along right around the time that we were beginning to do bookings, as well as the fact that Canada boycotts, tariffs, Mount Spur, and the list goes on. So those things all must be noted as we go through and just in reflecting upon budget numbers. Okay.

Here's our a la carte budget. My proposition for you is this. We originally started as a CBB. We are solidly capable with 505,000 of maintaining that and being a CBB. You'll see the numbers below, and I can go item by item for you so you can take a list as mayor Fleming had requested. The CDB, we're good to go. A DMO is gonna change things a little bit. We could be a CDB. We can be a DMO. But in order to be both of those things, it's gonna change the look of our budget completely.

Previously, what we gave you was basically a second draft combined status quo budget. That status quo maintains the status quo of somewhat with the other organizations in the state as well as kind of what we've been trying to do. And when you look, if you go and take a look, you know, deep look at our previous financials, there are losses. And we are seeing a financial trend that's going to move us downwards continuously until we are able to create a sustainable income source or have a revenue that's sustainable that matches the requirement of the budget funding. So what I'm gonna show you guys is what we have here, and let me see if I can shrink it just a little.

Okay. Do you wanna see maybe we'll just put the official approved amount as well. Sorry. This is a weird mouse. Okay. There we go. So this is the number on the far right that you see in light blue is the official approved amount that we've previously suggested and proposed. The the stuff that's in italics, you'll see that's a draft proposal. And just so you know, I might have missed a couple, so stop me if I got it wrong. All of these show the city of Valvius grant at 505,000.

We have options. Here they are. It looks as if we're a CVB. We will not be generating any membership income. Everybody will be looking to seek support from the DMO, which is the marketing arm. That's the whole thing that the people would like in the first place. They have no interest in being members of the visitor center, and that's understandable. So when you look at the membership total, that's reflected. We have a suggested income sales to be named. If we remain a CVB, then we would sell all of our DMO assets to the city of Valdez if they would like them, including our guide and brand to the city.

If we're a DMO, we would sell all visitor center assets to the city. And then there's optional add on, which is gross profit from office supply sales. We can start doing printing in office. There's not one in town. I don't think it would be any argument there. We also would see same numbers with Crawford advertising. You look at the vacation by guide color ad is the only one. There we go. 43300 that you can see change on the CVV because we would no longer be expensing that account line. Let's see.

So we've got clothing and collectibles. You guys can see that changes. Retail sales of branded items would be specifically for the not for the DMO to be selling as a whole, but if there's a combined minimum, then obviously that could be sold. That was suggested. Frankly, you could do online DMO sales. I don't know how it would do, but that's definitely something we wanted to visit. Retail sales total, you can see there. And then we have incentive packages. I'm still heavily one way or another, I wanna pursue that. I feel like this is something as a CBD that we have not been doing that could be a great asset to both the city and to the organization.

And the idea would be group packaging, which I've wanted to discuss and very willingly from the economic development department as well as from the city manager's interest. So if you look down a little bit farther, you're gonna see just kind of status quo across the board. Those are the things that'll just basically stay either way. Look down the special event income. We have a suggested draft minimum, which is 18,000.

That would be the event income that we made from Oktoberfest already. So bringing in a new additional event would probably only yield about 10,000 is my rough estimate because when you look at breakeven points, there's a couple elements that are involved in event management, and you're not always looking for a break even the first year. So let's see. You know, I guess if you look at that fixed cost divided by contribution contribution margin per unit. Long story short, that seems like a safe number to say 10,000 is optional for an add on for two additional events that have not been held before.

There's our total income line. That's probably the important one that you guys can see as you look at that total income amount or both of those elements. That could change significantly if we go back to the drawing board with events. But again, when we do our massive amount of events that we had done, it was the Costco version of events, which means that a lot of the things that we're buying would be bought in in mass quantity. So, you know, you're gonna get a discount on the event management.

You're gonna get a discount if you buy your own stage, and then you don't ever have to do it again, but the value of that stage is worth rather than renting. Same way with chain link fencing, etcetera, etcetera. It goes on and on. And so when you're looking at wages, we have the average wages that we had already provided. We actually 304 is a highball number, and you can see with a CVB or a DMO, wages the are gonna be fairly similar, a little higher with the CVV because we would be, funding some summer extra summer higher.

Optional add on is 20,000 for, event management expense. That's if we had, you know, two two day events and two small scale events or something to that effect. And then you're gonna see those numbers pretty much stay the same. Total payroll expenses. Okay? And the insurance isn't gonna change. Rent, the only thing that I decided to do here was just for the DMO. We could just be renting a room from whomever it is that even maybe from this the visitor center itself, and I could not give an estimate on the changing as far as administrative costs. A lot of that, you're gonna see say the same, telephone, Internet, etcetera. We would like to retain the website, so I've kept that in.

That's the amount that it is currently at. I can't see it going any lower no matter how much we wrestle Granicus, but you guys also, as a city, use Granicus. So I'm sure you're familiar with the changes. Supplies, same. Stays across the board for both organizations. Cleaning fees, you will see a significant difference if we have a good CPB because we are now, looking at a 50% increase. And and I'm not sure exactly what next year is gonna hold. The estimates are being decided right now because of the budget budget shutdown. Sorry. The government shutdown, we didn't have a budget to refer to as far as our next year's forecast for visitors.

Also, we have cost of gold goods and services. I've showed you kind of like basically with the CVB, we would add some I do not know what the success of that, so I kept the numbers very conservative. And then you can see what would happen if we had a combined status quo. This one right here that you can see that changes optionally because of the fact that there would be more marketing, then you're gonna look at a greater sell on the retail cost of goods and services. As well, we have an optional add on that would be for retail sales for the office supplies that we discussed.

I'm sorry. Retail purchase. And then if you're looking on down farther, not a lot's gonna change with the CVV. The guide postage and shipping distribution costs would not be there. They would be with the DMO. They would not be changing unless we do decide to do distribution in house, and that's something that we can visit later when we talk about it. But I'm giving you the overview and stop me if it's important to you. All these charges, kinda left the same. Software subscription changes significantly, basically, because of the fact that CVB will have less required software and subscriptions the DMO would have, and the combined minimum of the two ends up making the total about 38,000. That's negotiable.

There's either crowd with replace or that we can negotiate if that's something that's a factor that's important to the city. Also, let's see. Professional services are gonna change slightly if we did the status quo budget, which we know increases a few different things, and our accounting fees will go up slightly. Internet and web ads, that is definitely a suggestion. We go up, to 18,000 because when you divide that, the number actually equals about 15,000 a month, which is what we were originally spending per month on, social media. I'm sorry. Internet and web ads. Radio and TV ads. This is either a CVB. No.

We don't keep it. The DMO would be in charge of it. We also have there's the total for advertising for that. This one's kind of interesting because of the Valvezification Guide zero on the CVV. The DMO looks at 60,000.

The combined draft minimum is a 110,000 for both of those, but can be visited in house, what I had said up above regarding potential to do in house production. We're not opposed to the idea of going in house for design or in house for the production. The production would include us leasing a machine, and I actually have done a lot of research on that. We would be saving some money if we did lease the machine and actually produce our own guide, as well as being able to use that as opportunities for other people locally, such as the city when you guys produce a map. You can just come to us and we'll print it for you and save you guys the shipping and handling fee.

We'll even deliver it. And that's just another option for you guys to consider. Registration fees, you're gonna see a huge change in one to another because the combined status quo shows for an extra RV show. Those tend to be expensive. And just so you know, because of the fact, if you weren't aware, we now do not have Jeff and Laura Sachs with the Eagles Rest.

Things have changed and the new Eagles Rest owners are not putting the same level of interest in the RV shows to promote Valvese as a destination, and that should be considered when we go forward because they did most of the marketing for our RVs for the entire like, they marketed not just for the state, but, like, all of Valvese's marketing for RV went through Jeff and Laura Sachs. So this is a huge change and will bite us if we don't somehow find a way to accommodate for that. Anyway, that's just my advice. Contractual services, you can see here we have a combined draft minimum of 50,000 or a 100. This is the inclusion or exclusion of seed media as far as, you know, a couple different things.

We've got a website increase here, and then the combined amount here in contractual services of 100,000 would ink include website update and the design for the guide. So total, that's what you're looking at as far as a total. I'm sorry. Contractual services shouldn't be in this account line, and we've been working on that. Dylan's gonna fix it for us.

Transportation, you guys can see the differences between CVB, DMO, and the combined draft minimum and maximum, which is status quo. CBB, we're only gonna do we would just do the basic stuff trade shows. I think there's two of them, one for Great Alaska Sportsman Show and one for Fairbanks. DMO, there's the inclusion of the other ones, and that actually is what we were originally doing. I suggest the 14,000 because when I added it up, the hotels for some of the RV shows were more expensive than the the normal. So I did adjust that just for your information. Meals, you guys can see there. I'm walking you through item by item board member meetings and special events contingencies. This is suggestion. If there's a special event, there should be contingencies.

Particularly, if we're gonna have more than one special event, it suggested that the contingency is half of the revenue of of the event. You can see the rest of it is pretty much status quo except for the special events budget here, which you can see is zero, and then 10,000 would be our suggested if we went with an additional so let's see. Special events, this is how much we would expect to spend on special events if we do Oktoberfest optional add on of 10,000 additional per event. So if we decided to do multiple events, expect that the expense is gonna be there. It could be lower, but the first year, you're gonna expect you're getting a lot of those supplies for that.

And right now, we can reduce our budget for Oktoberfest this year if we do it because of the fact we have a lot of the things we already need. And we've already been through it, so it reduces the amount of time and energy as well. Finally, I'm gonna show you guys our total expenses here, and what you can see is the CVB expense, which is very close to net income and can be worked out. I what I did was I'm gonna present you guys with this, and if there is something that you see that is particularly, we could adjust this to make sure that our net income does come out even, because that's the ultimate goal, but that is the absolute all of it all, in the end, an additional total optional add ons would be 109,000, but that doesn't matter if you're picking them a la carte. So last but not least, let's look at this beautiful well, I think they're beautiful.

Those are my pie charts that show you our CVB and what we're looking at. What I'm hoping to explain to you guys here is that when you're doing this budget, everything that's excess of the 50% here that you're seeing for a CDB is used for other items. You can see that there is a small measure there. It's very small. You can see that little 1% as well as some I can maybe even scoot in

a

little. This is how much you're gonna get, you know, in administrative cost, payroll, etcetera, and then you're looking at the rest of that. I'm sorry. I'm on the wrong one. Income. City of LD's grant, 50% membership income, retail sales, etcetera. You can see that's what's gonna look like. 50% of our budget would come from the city of Aldis. Oops. And then this is the same one here.

This is the other proposition. That's the same thing except for this is if we're a DMO. What you're gonna see as far as my ultimate goal is if you're a DMO, how much of this is gonna come and actually go towards marketing because that's the whole point of the DMO. So noting the fact that, you know, this is this is the income here that you're getting and guacamole. Sorry. There's one more. That's the combined status quo income. And it's a little bit a little bit finicky. Okay. There we go.

For some reason, it doesn't wanna show up when I zoom in. Alright. Combined minimums, combined status quo. You guys can see how much income is coming in from each different source. And then on the other budget, which I keep apparently wanting to get to and I had to scroll down on this one just so that you guys could see it.

Hang on. Okay. There we go. So here's the last presentation portion that I'd like to share with you guys, and that is the CVB expenses. So this is where it comes into play.

I'm I think this is interesting. So you're looking at the CVB that there's there's the payroll budget right there, administrative costs, and you're looking at piece of the pie that would include travel sales and marketing. It's a small budget. It's a small number, but that's what would happen if we were a CBB CBB because our focus would be as a visitor center, and that would be left for someone else to be DMO. I'm assuming that's the city, and I don't so if it was a DMO, you guys can see that most of our again, there's guide right here. You look at the guide production and how much that advertising is relevant. I don't know how the guide got in on that one. Please excuse me. Ignore that that one right there. Let's just look at the DMO.

There's 48% to guide, and we also have administrative at 34%. So you're looking at, like, a huge portion of that pie is going towards marketing. And then here's the combined minimum and combined maximum. And if you look at those two together, as you can see the difference, we're going guide is half of the income of the combined minimum of the combo. And then you're gonna see we're advertising.

So administrative is 30%, and then you're looking at basically, you know, 70% is gonna go towards marketing, and then the combo max, which you finally get here. That's 42% guide and 27% administrative, and then the rest of that pie there. So you're basically looking at a little bit of a significant difference there as well, and 3% when you've got a number like we have is actually a pretty big deal. So and now I'm open to answer any questions and to collaborate with you guys on a good solution.

Any questions? Go ahead.

Thanks, Doctor. Harris. I guess, first question is on the various options and budgets. What has been the Board's input on all these different budgets that are here today?

Originally, before we had talked about the a la carte budget, this was the only thing that I keep being able to produce for you guys. Because even if I wanted to produce an a la carte budget, if you pull one thing out, something else, the house of cards falls. Like, this this is the only way that we can provide you with a la carte options. The board, we've had mixed sentiments about it based on the way that things have gone previously and what has originally felt like kind of a strong lack of support. I think the board was resigned to be whatever we need to be, but knowing that when you guys

see this

presentation document that I presented you, CBBs that are this question is coming to play. And so we know that some resolution needs to occur. We don't know what it is, but we're opening the, you know, the discourse for this to happen. And I think that the the board is basically of the opinion, if I'm right. What what does the city want? What do they need from us? What can we be? How can we best operate for you? We are happy to stay as a CVB and make it, you know, small, tight, sufficient. We'll be a great visitor center.

We continue to be a great visitor center. Those numbers and the and the feedback doesn't lie. At DMO, we're happy to work in that capacity as well. I know that nobody really necessarily wants to take on the guide endeavor in the city, but that's an option. So we're wherever you guys need us to be. Is that correct, you guys?

So so I guess just to clarify, I mean, on each of these, you know, separate budgets, is this kind of to date mostly being driven by just your work of trying to meet the board's wish to be able to present to us options that we can then give direction to you. Is that correct understanding? Were these budgets built in collaboration with the Board to date?

So can you reframe that question for me also?

Were each of these columns, CVB, DMO, etcetera, were they built in collaboration with the board? Like, were there work meetings where this got developed, or was it mostly the board gave you direction and then you came up with your best

shot? That's what I did. I came up with my best shot. The board themselves are not acting right now as an operational board. They're an advisory board.

And so their role in this system, apart from our treasurer over there who's been actively involved in, you know, administering the correct information to be able to make, for you guys to make a decision. I I the reason, Austin, sorry, council member Love, the reason that we've come forward to try to provide you with this is because I don't think that anyone's completely certain of what the future holds for that. Right now, know with a $505,000 budget, we will not be able to operate in the capacity that we have been previously. And that's the reason why we're and you will see, you know, that as you look into our audit records that you're gonna continue to see that that in this level of support, we will continue to go downward. And the only way that we've been able to stay at a steady, which you'll see in our 2024 audit, is by pulling a bunch of costs, cutting a bunch of corners, faith out there being the ambassador on the floor, and that has taken its toll on the actual operational function of the organization.

So what we're giving you is this is what we are actually capable of doing. And so then in the same regard, that's that's where my board stands as well. Think they stand behind me on this.

So then after looking at audit that we received, the draft audit, is that not final? Is that my understanding? It's

final. Yeah.

It's signed?

Okay. It was just that that was what I had when I was preparing the

presentation. Finalized since it was provided? Yep. Great. Thank you. And then just looking at the overall fiscal position of the organization from 2023 to 2025, looking at the audit, I think your net position, your net assets in 2023 were $178,000 And then in 2024, that dot dropped to $146,000 And then at least based on the balance sheet that you provided, I think, during one of the work sessions, that drops down to $38,000 in 2025. And I think the main reason behind that was some of the issues with the vote raffle, I think, which you're describing, hardships that were incurred.

No, actually, so when you're looking at net assets, for clarification, that would actually be depreciation expenses. And correct me if I'm wrong, but that's really

the I guess another way to look at it is just your cash and current assets. In 2023, you had $208,000 in cash. In 2024, you had $186,000 in cash. And then this year, at least, I think it was October 28 that those balance sheets were, you had $52,000 in cash. Looked like a little over $130,000 in cash was expended this year.

That's correct. And you'll note that some of that is actually going to be recognized for 2026, and that was in it was supposed to be somewhere in the presentation, but I think I skipped that part.

Yeah. So I guess so I that trend is concerning to me that you're you're you're drawing on your cash reserves to cover costs. You know? Typically, you're trying to not do that by having, like, a physical, like, restraint with your budget and not overspending so you're not drawing on reserves. But to see that kind of happen year over year and and then to see that you're in that position now is really concerning to me. And then tonight to present a budget in front of us that then shows even the CVB that you're gonna have another net loss.

Mhmm.

It's very concerning to me overall just from a fiscal standpoint, especially when we're trying to make an investment of $05,000,000 in three I understand that some of the CVBs or VCBBs in other places have net losses, but I don't want to see a net loss when we're making a $500,000 investment. And it looks like in the past that the VCBB was able to have to be profitable essentially, to have net assets year over year so that they had a cushion of cash so that when days do happen, you're able to draw on that, not after cut services. And then hopefully, the next year rebound without having to draw down on your reserves. So I guess that's a long way of saying those are my concerns. And then with those in mind, why would you present to us a budget where you're furthering not even breaking even?

I mean I mean, I I know you noted that you wanna revise to that. But from my standpoint, at least the starting point would be a balanced budget

Yeah. I absolutely agree. And that's, again, Austin, why so for two two things. The first of all is that when we received, like, this year, we had our cash in the bank in order to fund the items that were purchased, which was an extra six months forward on the guide. That was funded.

So when the vote raffle fundraiser was canceled, that sucked our reserves and all of the profit that was estimated to occur was then redacted. So that's for one point. The other thing that I want you to understand is I I'm presenting you this budget because I'm telling you this that it's not working. That's that's what I'm saying is the $505,000 that you guys have that the that the council has suggested that we operate with is not gonna work. That so I am agreeing with you in that wholeheartedly, and I understand that that $505,000 investment is a lot of money for our our city.

But I also want you to understand that in order to operate as an organization, the 505,000 would be throwing dust. You're throwing your money away because of the fact that that is not going to pay our bills unless we're a CVB and we can increase that sales significantly through having a having a supply store, which we talked about. That's something that's definitely an option and at minimal, a small town gross profit looks at about $30,000. I think that's a fair number to start with. I did crunch a bunch to find out that.

But when you're looking at these numbers apart from the CVB, which can easily balance when we have that optional add in, the DMO numbers that you're looking at, the second draft combined minimum and the status quo are not gonna function with just 500,000. That that's my point. That's the reason why we were trying to think of alternative ways. So I agree with you that funding source is not solid enough to establish us in any one of these capacities, and that's why I'm coming to you. That's I'm concerned.

Did that answer all your questions?

So far. Thanks. So

it was my understanding that your large cash reserves from 'twenty one and 'twenty two were as part of the paycheck protection program for COVID-nineteen. Is that correct?

That's correct.

Okay. So that's not it's not like you built up a bunch of cash reserves and now you're dwindling them over time. You got a onetime payment to rebuild your workforce after COVID?

That's correct. We also actually had not utilized fully. What I could see was utilize we I don't know that we used all the funding at that time. From my research that I've done, it looks like we still had a, as you see, a cash reserve, and that has kept us fairly steady. But we do if you look at our total net, are slowly seeing a dwindle as expense for our DMO CVB chamber has increased.

Okay. Thank you.

Hi. Thank you. This was very informational and very thorough. I really do appreciate it. I do have a question though looking at it, I think you kind of see the same concerns that counsel is having regarding valuations for the future and moving forward for the VCBB.

When you first came to us with the budget, I think we were requesting $532,000 I believe about for VCBB to maintain the current direction. You've seen that, that was very doable. And now that you're looking we're looking at these numbers, you know, you're saying that it's not doable and that, you know, we have to downsize essentially to be able to get the price down. It did the audit change that?

No. Let me clarify that for you, please. No. So you're actually arguing two different points. I'd like to clarify. 562,000 was the original budget request. That budget has been like we're in Ant Hill and a dynamite got thrown in that. Everything has completely changed. That budget included events production and all types of other things that could support that funding. We were asking for $562,050.

Council said no. We would like to give 505,000. That's a completely different concept, and so I just like to clarify that so you understand, for correction and to understand that this official approved budget has now been completely eradicated because at this point, even to go back in and try to fix it, our board is tired. We we've we've we've given as much as we have, and our goal is to see if we can't do this.

If you were just to be under the CVV, would that be year round for employees, or is that just during seasonal operation?

That's correct. It would be year round.

Year round? Okay. Thank you.

I'd also like to say that, I am not sure whether or not this email that was sent to you guys today city manager Duvall and mayor Fleming, did you receive the email today?

I did receive it.

I received

it right after work.

Okay. Alright. Thank you. I just wanna ensure that that's clarified and in you know, for all parties involved, I think that, Joy, you probably received sorry. Council member Witty, you probably received the email that I sent out as well. And I am formally requesting that you recuse yourself from all discussion and from vote regarding anything with v c b c VCB with the organization and, as well as anything regarding the public accommodations tax.

Yeah. And that won't happen because it's it's, our rules up on the council is that we if there's a financial gain to be made. There is no

That's the clarification? Is that right? That's what you're sharing? That's correct. Yeah. Okay. Alright. Thank you, guys. On the go.

Any other questions?

Yes. Thank you for your information there. I'm still a little puzzled. You mentioned the $85,000 at cost, and I didn't quite understand. Is that a now out of period cost that's maybe not being captured properly in the appropriate year or business cycle? Could you better explain that for me, please?

Sure. So every year, we invest about $85,000 in the guide and upwards of more depending, previous previously recorded was 85,000 Let me go down to that section for you. I was having a hard time too because what it looks like previous years as far as how they recorded it was slightly different than how it's being recorded now. So, what we have here for What am I missing? Here we go.

Sorry. Valdes vacation guide here. Is this what you're referring to? Valdes vacation guide?

Had mentioned $85,000 that it seemed like it maybe it was meant to be spent in 2025, but was not. It was going to be moved into 2026 or something like that. And I wanted to clearly understand in my mind, and if that isn't impacting your budget cost reporting there.

Yes. So actually, what I'm referring to when I said that was the raw financial data that was presented to the city previously. How it works is we pay for services in 2025 that are to be provided in 2026. So the guide publication itself is actually for 2026. So it's recognized.

If the purchases was made early because of the fact that we've been trying to push back that date to support our members, and that was the goal with the money that we had spent or that we had had made to date on the the the boat raffle fundraiser. So what we had done was make the decision to purchase that guide earlier, and then that would be received in 2026. That makes sense. So yes, purchased, but actually counts for 2026 as expense.

Okay. Thank you.

Yes, go ahead.

And Derek Harris, I guess just a bigger picture question. Historically, say, in 2023, I believe you had a net profit of $81,000 from your financials that you presented. So that was a good year, 2023 out of COVID. Yeah. You're able to put away or increase net assets We didn't have by $82,000.

Yeah. We we didn't actually so this is where it's kind of muddled because we didn't have staff members on and we closed early. A lot of that the the money that so what you'll see is that bottom line number, it doesn't reflect this. I mean, it may reflect to you guys the success, but it doesn't reflect to us success. It's actually the opposite of that.

That means that we were in crises, and we didn't spend all the money that we could have or should have in the areas that we've allocated. So, I mean, I think that's the hard part for me is when you guys look at the net bottom number, that doesn't always accurately reflect, which is kinda what I was saying about the CDVs is we don't know what they were doing. Were they making the purchase of some type of an asset that was a fixed asset purchase or something or whether they were paying off bills that were owed or some type of if you even think about them paying off loans. So there's so many different facets involved, it's hard to piece that together for you to

see But sounds like a lot of it has been filling positions staffing wise have been driving a lot of your increases in expenses.

Yeah, and you'll see that go up and down, and actually we decreased in our expenses last year significantly. You'll see if you're actually looking on the actual profit and loss statement and the entire balance sheet, you'll you piece together that fact that part of the time we didn't even have like, in 2023, they didn't have a executive director for about half the time. 2024, they didn't have me for a few months before I came on, and there also weren't any staff members on board until May. So it's just sort of it I guess, it's just case by case.

So I guess, like, overall, like, traditionally, the VCBB has it operated as kind of a combination of a CVD and a DMO? Is that kind of typically been the operations?

From what I can see historically is that we had started as a CVB and then somehow slowly drifted off to DMO representation, but then we were purchasing things for DMOs, but then the CVB would be closed in the winter. So I would say that it seems like it's kind of maybe an up and down cycle as far as I can tell on what it actually was accurately role its role.

What do you and the board envision, you know, ideally, your organization delivering between those two types of roles? Like, what do you think ideally is is the ideal mix that our community needs in order to drive, you know, business and tourists here. Like, what's the what are the things that need to be done? Because, I mean, I think it's hard for council to decide if it's a CVD or DMO. We kinda rely on your board and on you to like you said, you're you're, you know, in touch with RV parks and what's not happening there. I mean, what what is it that needs to be done this year?

If, ideally, there there's no ideal about it. In order to be successful as a community, I strongly would urge the council to consider both a CVB and a DMO. If it's not us that represents as a DMO, that's fine. But a DMO is essential to our community members, to our businesses. As much as we have not been a chamber, I feel strongly pushed to support our members, our business members in the community if this DMO is not properly done and if somebody isn't consistently pushing forward to try to to grow the success of our marketing campaign as Discover Valvees or as Valvees, we are gonna see the drop.

And I know that you guys haven't seen the drop yet, but if you were to imagine what it's like to suck any of that funding away, particularly if we were not a DMO at all, it would definitely be like a crash course in slow death. And CBB is the same way. Like, if we don't have a visitor center, we just went up 50, and we're also looking at numbers this year increasing even more because we have an additional, what, 12 votes. So, you know, either way, whatever you guys choose, we're at the position right now where we're willing to do whatever is asked of us. But in order to do this DMO, we can't do it successfully without additional funding.

And this isn't my opinion. I've just drawn the numbers up, and I'm giving this for everyone to consider. This is what we have. And, you know, if the thing is is we've tried to be very fiscally responsible, and I think this is a new board, a new executive director. We're in the position right now that whatever it is that we can do to work to make this smaller and and and to reduce the expenses that our that our taxpayers are investing is is what we will continue to do.

But when you look at those numbers and you guys see the decrease in funding from economic development and you will see the next year effects of that on your bar chart, and that's just sort of a financial forecasting estimate, your best bet, in my opinion, would be to try to find a way to do both of them. That means we're CVB and you guys have someone to do do DMO there in the marketing department. One way or another, they both need to happen.

I don't know. Could your board president maybe speak to that question too about, you know, what UC Lee said, missus Gronk, as, you know, ideally, what the VCBB should be delivering in the next year, kinda given some of the, I guess, feedback that council has given today too.

Yeah. So, just to kind of clarify, as a board, one of the things that we've discussed with faith in all of this is what's what is the best fit for Valdes? What does what does Valdes need from VCBB, whether it's just the visitor center, whether it's doing the advertising and and marketing for businesses in Valdes? As all of you are aware, VCBB has gone through a lot of growing. We've been through multiple executive directors, multiple board members, and are feel like, you know, once we get together and have a good idea, something happens and our you know, it's kinda pulled out from under us.

I think that we, a board and executive executive director Harris, feel strongly that having the visitor center as well as the DMO is gonna be probably the best bang for the buck for the city. Events wise, I know that kind of got muddled in all of this. It was so it was utilized as something to try and bring revenue to the VCBB to help offset some of these costs. But, again, having those doors open for visitors coming in, with the growth that hopefully we'll see in the next few years, the importance of having the VCBB open for the visitor center as well as the the guide and the marketing aspect of it. I we we strongly feel that both of those are are pretty necessary.

What we have the funds to do, again, we're here at your mercy. We we want direction from you guys on what the best thing for the the visitor center to do, for us to do. Like I said, we're we're a fairly young board and and new faces and just wanna do what's best by our city. So did that answer?

Yeah. No. That's great. Thanks. Thank you, Sean. I appreciate that. I mean, I guess just with that in mind, you know, I mean, I still have the same concerns, you know, regarding kind of the, the trends fiscally, like, where the organization has come, and I I appreciate the clarification on why why that's happened over time. I appreciate that very much.

Can I interject for just a second? Faith wasn't here. I was on the board when we went through having no executive director. I it was my understanding. Megan Nyland was our board president, and I think she was doing everything volunteer.

Like, I think she stepped in as an executive director, and I don't know that she was paying herself very much if anything at all. We were trying to keep the place afloat, and that was in 2023 when you saw the the big savings. We obviously tried to rectify that, brought in a new executive director, things went south quickly. In all of that, we were trying to also create you know, be this DMO for the city where we went through a couple of different companies that weren't. We didn't have the resources to be able to do a lot of the marketing ourselves.

We didn't have the photos. We didn't have some of those things that we we had to kinda scratch and and dig around to find. We felt that going with Seed Media was the best thing for all involved because it's a local company. They were gonna be able to encompass everything that we needed. Yes. The the price was a little bit more expensive, but in our in our discussions, it seemed like it was the best route to take for the DMO portion of VCBB. Just a little clarification on.

Also I wanted to interject too and say that in 2024 and even into this year actually, there was quite a few expenses that were from 2023 that arrived on our doorstep. And so some of those expenses actually were 2023 that you're going to see coming out of twenty twenty four's budget.

I'm going to contrast what Councilmember Love was saying in regards to your fiscal position. It doesn't concern me to see that you are expending your PPP loans for the purpose that they were, you know, loans to you for is is for the the paying of your payroll. If you look at the, the trend over time, it looks to me like you are responsibly spending that money on purpose that it was meant to be spent. My main question, I guess, and feel free to correct me if I'm wrong, but it seems to me what you're endeavoring to do with this work session is you've presented us with what you believe you can achieve and what you believe that it would cost, and you would like for us to give you the priority of which things like as though, like, we're at an a la carte menu here, and we can go without?

That's what we were under the understanding that we were asked for. And my my council member Devins, what I what I think that we are here to say is that we are we are willing to receive the $505,000, and we would like some more, please. Can you guys give us an idea of how we can make this work? If we cannot, then then we will be a CBB, and then then we will, you know, have a great discussion with the with the city about the income the draft income sales that's proposed that would sell you guys the visitor's guide to take over, and then we would just operate as that good old CVV that we've been, maybe slowly at this point, which originally, you guys remember council member Lally had said what he'd like to see is the slow growth and steady, not to try to just automatically, you know, boom right into events and try to do that with the understanding that I still would kindly disagree with you, council member Love, on the the function and the necessity of events in a destination marketing organization's budget. Needless to say, going at it in a much more conservative way.

So long story short, Jimmy, we are presenting you with this hoping that you guys will give us insight on whether or not if we don't become a CBD CVB, if council is willing to consider extending our funding or creating an outside contract with us as you see in other previous CVBs and in the chamber at Sitka, an additional funding source to support the DMO purpose, and that would operate as two separate budgets in one organization, clearly delineated in program funds and class systems apart from the actual CVB running. But whatever it is, we'd really like to have a contract and very clear written deliverables and key performance indicators that help us know how to do it well. Because when we walked away last year, we said, wow. We have been doing so good. This is going so well.

And then kinda got thrown

to

the wolves, it felt like a little bit at this last council meeting, at the eighteenth, I think it was, or nineteenth, without I think what it is is not that that you guys are to attack us, but I don't think we have clearly decided how these deliverables will be so that you guys can receive that performance metric. And that's what you guys are looking for. That's what we would like as well.

So I I I agree with you, wholeheartedly on the fact that we do need to have more specific metrics measurement of of what, what a success of your organization would look like because, I mean, and and and not to discredit what Councilman Love was trying to get at is one of the only things that we have to look at is your fiscal position. And and per my understanding of my years working in non in the nonprofit sector, is not the goal of a nonprofit to endeavor to grow their savings account. It is the goal to deliver the service for which is your mission. And and in fact, if you have savings, then you have underperformed at delivering that goal in some cases. So so I I don't think that it's fair to measure your savings account and how successful you are.

We don't really have very strong standard of what metrics we are using to measure to say whether you guys have been successful or not. Yeah. It's the bed tax. It's it's it's it's really hard to establish. And and and as I stated in a previous meeting, the bed tax can't really go up much more than it can in the summer season because in the summer season, almost every single room is full.

So until we build more rooms, we can't get more bed tax. And and we were actually just talking about potentially some avenues to get more bed tax, that would not that would not in any way reflect the performance of your organization. It it would just it would just reflect a change in our municipal code. So so this is this is kind of what I would like for us as a council and for you as an organization to come to some sort of understanding on is what are a measurement of success? What metrics are reasonable for us to expect and and viable for you to deliver?

And kind of following through with what Jimmy said. First of all, Faith, good job on presenting us what you were what we'd asked. I know it took a lot of time and effort, so I appreciate that very much. And to the board for helping out and everything. So there is no animosity, I want to state clearly, between the council. I mean, we fund 95% of your organization. So, you know, we wanna make sure it's getting right. This is so I know it's it seems like sometimes we're being argumentative. We're really not. We just wanna make sure we're on the right path.

So one of those metrics that, you know, we've led to is, you know, for instance, it cost you $79,000 to make a guide for you in 2024. How effective is a guide?

Anybody? Absolutely. So if you'd like to, I can actually give you the numbers on that. Last year, we saw so for 2024, we saw upwards of 39,000 plus guides including the we actually is it this year we had to print additional? Was it it was

this year. Yeah. Yeah.

This year. So last year we sold we were we gave away 39,000 worldwide copies of the guide as well as the fact and you guys will probably see this in that annual report that we had. 10 times 10 x that in digital copies worldwide were retained. The direct effect of that, I'm not sure, but it reached every single continent. And in particular, we spent extra investment in collaborating with a Brazilian.

I mean, these are some things I didn't get time to tell you guys, but we're talking about some of the influencers that we reached as far as that market in Brazil and in Ireland and expanding our reach to some other international, including the German Germanic countries. So, you know, that is a performance indicator. I think as the guide number increases and as you see increased visits to our website, which is what I was trying to give you guys the best performance indicators that we had of our good job at that previous meeting. And I think that that's hard because what I need, I think, to understand from you is if that doesn't matter to you and that's not relevant to to helping you understand, then tell me what is, and we're gonna make sure that we get you those performance indicators.

Yeah. And and that's where we kinda come to a little bit of of work. You know, I'm accounts I work across bay. I really am not a tourist person. Most of us don't deal I mean, other than the fact that they come to our town, we welcome them. We're very happy that they're here. But out of those guys, you know, like you said, you distributed them. I can honestly say that I didn't see a lot of Brazilian people here this year.

We did.

So I mean but I mean, that's good if they came off the ship or whatever. But I mean, how do we know that these things are being affected so that we know that we're putting the dollar where it should be put you know, in in these kind of guides. So when we say, for instance, you know, your, professional services and advertising, how do how do we know the advertising is actually drawing in customers to Valdez? Because, you know, I hear from the RV parks, and they say that they're pretty much, you know, the ones that come here for the most part Mhmm. Are Alaskans that come from Fairbanks, most of them. They've got their RV. They come down here, they fish.

Yep. So

And state is a huge market for

us right now. A major portion of the RV park. So, I mean, do you really need a visitor guy or somebody that lives in Fairbanks? And so I guess what I'm saying is that the council, you know, we've got some, you know, ideas of how it might work, but we're looking towards you as a professional to make sure that, you know, these metrics that we're measuring are spend of our money is accountable. Because if I had, for instance, if 500 if I knew that $600,000 $700,000 we're going to bring in $30,000 more people into Valdez, why wouldn't I invest in that as a city?

But right now, I can't tell you whether any of the stuff that we're doing is very good. I have no metrics to base that on. I've got people that, like I said, in Fairbanks that come down and they're that's who travels here. There's but I've also seen people from Florida. I've seen people from all different parts. I met a person when we were doing the Veterans Day or Memorial Day thing. They've come for the last three years from Wichita. They bring up a camper, and they do the Valdez because her husband was a service member, and he likes to get the little medallion. They've been coming up for the last five years. And but I asked him, just out of curiosity, how'd you ever find it?

He says, oh, it was with the RV company that said, hey. We gotta bring a bunch of RVs to Alaska. Do you want to come? And him and his wife happened to stop by in Canada to a couple that were fishing and said, we're going to Valdez, Alaska. It's best fishing ever. And so they drove up here. So did marketing help at all? I I didn't tell you.

Oh, and that's one thing too. You know, marketing a lot people that don't understand the marketing concept, will often wonder, like, what where that seems like a lot. Marketing costs a lot. And a lot of times you will I'm sure there are plenty of people that you will meet who will not have read the guide to get here, and they're not gonna be the people that just climbed on our website. That doesn't mean that we didn't have a reach and impact in that, and a lot of times what you're gonna see too, and this is something that this is giving me good idea and fuel for possible indicators that you guys could be looking for for the future, but what it sounds like we need to try to do, I will continue.

You guys will be patient. When I give my presentations, I very much seek with consideration to be educating the counsel on the marketing concepts throughout my presentation. So it might sound like I'm just blabbing, but my intention is to educate so that you guys can make good decisions because it's your role to make those decisions. But I don't know that very many of you, you know, accepting council member Woody, really actively involved in our social media or actively involved in marketing itself, not knowing that and understanding is completely understandable, and that's gonna be our goal going forward then to make sure that we've properly given you the information you need. Yeah. Okay.

But, I guess, just, like, going back to, like, I think moving forward. I mean, number one, just to go back to the financial. I guess, like, just my overall, I guess, philosophy, whether or not it's CSOs or in this case, you know, VCBB and budget request as received. You even talked about this last night. There's, you mean, there's there's two things I'm looking for. Overall, big picture for all these organizations. I'm looking for financial health. I'm looking for programmatic success that serves the citizens of all these. Those are the two big things. Right now, I'm not seeing financial health in the BCPB.

And for the reasons I already stated, I worked for nonprofit for ten years. I worked for the city of Aldis. Those past nonprofits that I worked for all put savings away, had cash reserves for rainy day funds excess of $05,000,000 to hundreds tens of millions of dollars in the case of the city. So the statement that's saying that nonprofits don't hold on to cash reserves or don't year over year build on that, that's not true. So there's also the nonprofits that operate in different ways.

But nonprofit doesn't mean having net losses every year. That's not what that means. It means being able you know, have the revenue you need to cover your expenses and hopefully still have buffer. So that's that's my overall thought on that.

Well, I'm glad we did have a buffer in this situation with the boat ravel fundraiser. And that is the eternal debate between nonprofits. Is our nonprofit supposed to have a profit? That is you're not the first person to ask that question.

So so

I mean, so moving forward, I'd certainly like to see that, you know, going that direction with the VCBB financial health, where you're not showing, you know, net losses year over year. Yeah. Regardless of all the things that happened, COVID, boat raffles, etcetera, budgets so that despite those things, you're still gonna have financial help.

Okay.

Number two, programmatic success, you know, serving valued citizens. You know, one of the things we asked for were annual reports from from the VCBB. I still haven't seen those, I don't think, that I'm aware of. And those annual reports in my mind are supposed to show them to the council just what we're talking about, the metrics that show success of an organization. And so hopefully, moving forward, those annual reports

You said you lost those ones, the previous ones?

No. The one that

I sent forward to you and

Yeah. They asked for that and and previous annual report that you said

So he asked for the past two just to clarify, guys, this is another one of those things. It's like just making sure that we get what is asked for. You asked for the previous two annual reports. Austin, I provided you with one because the previous report when I apparently, they didn't do one before I came out.

I understand. Okay. I mean

Yeah. I understand that.

Picture I got one. We should have five years I mean,

that's Right.

I should have all the annual reports if I ask for them for an organization over half $1,000,000 a year. So I'm just saying, big picture, this is just problems that I'm seeing. And in that in those annual reports, we should clearly see this money. We're giving these metrics that council member Devins and, you know, counts and the mayor were saying that we're seeing the success in those. So I can see it written in documentation. It's really difficult to always just come into a meeting and have it verbally talk to you the first time. Just like it's very difficult to not receive this budget ahead of this meeting to actually look at it and just get it. You know, it's it's it's hard to sit here and to see all these numbers without having time to digest it. So communication is really important. I think, I think, touched on that in the last meeting.

So like, that's important too. And we've also talked about moving forward, having quarterly check ins with the organization so that we can make sure that we're like going towards success. Because I think everybody wants success here. And I guess, like big picture just where I'm at right now is I'm still willing to the $505,000 I'm not interested in giving more the city's money. I still would like to see a final budget from the VCBB.

I think the ideas that were presented here tonight of what if it's a CVB with whatever DMO step you can do, given the budget that we can afford that works that we can support. I'm supportive of 500,000,500 but I still need to see your final plan before I can actually give a head nod fully. So I kind of leave that to you. It's hard for me to know what's exactly right. Kind of lean on your Board's expertise and your expertise, Director Harris, to really put things together.

So whatever that looks like, great, present that to us. And then number two, let's not have a net loss. Like if you have to make difficult decisions to balance the budget or even put some cash away so you can start building your reserves, I understand it might have some difficult decisions, but that's kind of where we're at in my mind. There's some difficult decisions that need to be made. And whatever those are, you're the experts in that area.

So that's I would leave that to you all. I mean, that's my kind of opinion moving forward is the $5.00 5,000,000 is still a line in the sand for me. And I think you need one more step of working with your Board to get something that your Board is on you're agreeable to and what you can afford given what we're willing to do. That's just where I'm at. So I don't know, Aaron. Sure.

Austin, I'm not trying to be argumentative, but I think that what you're saying is a little bit, in opposition to things that you've said in the past and things that you've committed to in the past. This program, as you're well aware, one of the qualifying, or what rather one of the qualifiers of this program is that these funds are not meant to be used to grow savings. That is something that is a standard that's that's baked into our policies. And when 90% plus of their income comes from the city of Valdez, how are they supposed to grow savings without using our money to grow savings?

Can I respond to that?

Yes. Absolutely. They're not a CSO. Well, but still,

I Is it is this part of the CSO program? I'm Is this part of the CSO program?

Only because we took it out of the CSO program is it not part

the Is it currently part of the CSO program? I mean

so so are you suggesting that you are comfortable with them using Citi funds to grow their savings?

I'm suggesting I'm comfortable with them using Citi funds to be a financially healthy organization, absolutely. So what

I'm saying is, if they came to us, let's say, this is a philosophical question. If they came to us and they said, actually, we can do all of our operations with $400,000 would you still give

them 500 and $5,000? That would depend. On? On what they presented to me at that time and what they were gonna use with that excess funds. If they had a plan for it, sure. Maybe. But they're not a CSO, so they're not subject to the stipulations of the CSO. So that's why I think about it separately, if you want a clarification on where am I thinking.

Well, okay. So I appreciate the clarification.

Go ahead, Joy.

I just wanted to say, so I agree with, Love. I I think that you guys need to have a healthy business. And that's really what I would like to see for the VCBB. We as council members, we hear a lot from the public where there's a lot of real concerns about the direction that you guys are going. And, I think some hard decisions have to be made.

One of the questions that I posed to you, Faith, in one our talks was just if you would be willing for something like with, your pay raises, which salary increases is a huge amount that, in the audit reflected was part of the outstanding cost. I ask ask you if you would be willing to reduce down the percentage that you're wanting to increase pay from it was like four point something percent down to the city standard, which is 3% with our tier system. And you said no. And so I think something as simple as that minute thing could really lead to a financial difference. You know, I'm really thrilled to hear that, like, with the magazine, or the guide that you guys do, a lot of online.

That was one of my big questions was if we could get away from the paper and maybe move more towards digital because there's many, many, many cheaper options, if you went that direction. And everyone knows everybody is trying to get away from paper and go online and go digital. So if you looked over what you presented us with the draft proposal tonight and simply went, okay, here's an area we can cut, here's an area we can cut and reduce down some of this, we might be able to find some middle ground for you guys to be able to to accommodate what the city needs.

Well, I just had a couple comments regarding that just to let you know. Councilmember Whitty, what we have as far as an increase in payroll cost is purely reflecting the fact that we actually had bodies in the building, and that completely changes everything, including our insurance costs, including our our our workman's comp, the whole entire thing. So when you're seeing an increase in payroll cost, that's what that reflects. Our people do not make nearly what the city's funds are, and the only type of recourse that I have for them is to give them well deserved increases in their pay. You know?

I mean, I don't. It's not this is not something that I it's not a negotiable thing. This is an operational matter, and I don't think that that particular business matter is of any concern to the council, especially if I'm doing within what's completely below what is the average standard for a nonprofit organization to pay their employees in the first place. So national average? No.

We're well under the national average, and I'm not willing to consider that something that minute is something that's a case point. If that's gonna be a make it or break it, I'd rather not be an executive director. So, I mean, that's an important point to me, and I will stand behind the work that my people have done that to warrant them to deserve that. I cannot pay them what the city pays them. I do not give them an insurance plan nearly as sufficient as what the so if you look at work and pay and compensation, our employees are drastically underpaid in my opinion, but I'm doing my best. So and then regarding that second thing, you're right. I completely agree. Guides could be completely digital, and I would love that. But, unfortunately, for some reason, everybody wants a paper guide, and it drives me nuts because in marketing, I say, why not go digital with everything? We don't need paper anymore.

But I'll tell you that those guides go hot off the press, and people are looking for the physical paper copy to hold in their hot little hand. And our goal this year was to make sure that that guide was something that was pretty enough that they wanted to put on their coffee table and had enough stories in it that kept them juicy. So next year, that's gonna be even better, and and that's the best we've got. So if they want paper, we give them paper. Sure.

I've been in sales for twenty five years. I've sold motorcycles, RVs, cars. Everything you can think of, I've been in sales.

Robert Harden, treasurer.

One thing I hated was filling up the guy the brochure. But 50% of the people that came into the store, whatever I was selling at the time, brought in a brochure with handwritten stuff on it. I could get the same thing off the Internet. I can look in the back of the newspaper, whatever. But they grabbed the brochure when they first came in. We blew them off. They came back with that brochure. I've been in Anchorage, and I called her the day it happened. Some people from Switzerland asked to borrow my phone because their phone wouldn't work so they can get a hold of the motel to send them a shuttle to pick them up. And I noticed she had a Valdez brochure in her stack of brochures, just went and started to pick them up.

I'm like, are you all going to Valdez this year? She's like, no, but we're going next year. I'm like, awesome. I mean, it's a great place. What are you doing? And they were leaving there. They were going to Kenai, and then they were flying to somewhere down South, North America or something. But this was like boom, boom, boom. And then next year, they were coming back. But I just I run into I go to Anchorage a couple of times, three or four times a year.

I run into so many people that are picking up the brochures. I was against them because I was a guy putting them in the rack. And somebody come in and grab a brochure, first thing you know, you're not selling the vehicle, so you're trying to get away from them so they can do their thing, but they come back with those brochures. And we I mean, I had a guy help me bring my trailer up here. He's been here three times because he came to Valdez unexpectedly because he did me a favor, and he's been back three times.

And it's just that. We've just got to go out there and tell people Valdez is great. I was reading the mission statement there a few minutes ago. That right there is the visitor center, except you add visitors to that, not just the people who live in Valdez, but you add visitors to that. And that's what we do at the visitor center. And it's we've got a great group here and I'd hate to lose any of them.

Go ahead, Jimmy. I

am very sympathetic to your position in regards to, you know, the the challenges of increasing costs and and and limited revenues. You guys don't have a product that you sell to visitors. Visitors are a product that you sell to us. And it's very hard to know how many we bought based on what you guys did. That's that's a very hard thing to measure.

And I think that that's kind of the crux of the issue that we're all coming to is you guys, you know, you feel like you're having success and it's not being recognized. And we are not fully able to recognize any success because it it is difficult to measure. So I think the challenge that I would like to put on on both groups, the city council and on your organization, is I think that we need to come up with some reasonable deliverables that we can measure over a period of time. And and then I think that that's how you guys justify an increase in budget going into the future.

Oscar?

I would agree with Jimmy's thoughts there. First off, I would like to thank you and your Board for all of your hard work, time and effort. You can tell that's been a lot of energy and thought and work has gone into this. So I do appreciate that. And you are here to make our community better and for other people to come here and enjoy this great place.

So I do appreciate that. And I like the idea about the collaboration, working together, City Council, VCB and identifying these deliverables so we can track and measure the success because we want to make sure that we both agree upon what success looks like, right? And we can recognize and celebrate that success, and we want to do that together. So I'm very comfortable with the five five portion there. I would like to move forward.

That's my opinion. I do want to see, you know, deliverables or these requests that we talked about, like the quarterly meetings. I think that's very important for both parties, both groups to stay engaged and work through this. And I would agree, I think it was Councilman, Lolly that talked about that kind of slow, steady or the steady growth. Maybe not so slow, but steady forward progress. We'll take progress over perfection there, okay, moving forward there. But I do appreciate your time and effort, and thank you.

Again, I'm with the right now, same as Lester, I agree to five zero five, right now and a steady growth and continued communication with quarterly meetings, and, you know, down the road, talk about things that we can develop, metrics that are proven, and we can see where, you know, people are using VisitorSky. That's a good investment, maybe not as many or maybe just as many, you know, or maybe even more, you know, and in that kind of respect. So, I know that you'll probably have to go back, present to the board, whatever it is, a $5.00 5 budget. Looks like it's a CBB, and then, present that back to council, for a final time. And I'm sure that we'll have plenty of time to to work that out.

I I just wanna, clarify too. If we when we do go back and rediscuss this, we hear five zero five loud and clear. Is city council comfortable then with us just being a CVB? Because that's the direction this is taking us.

Yeah. If that's if that's what the five zero five ends up being, you know, is this, I think that we are clear on that number. And so if that's what you can do, I mean, if you can figure out a way to make it, you know, double somehow without increasing it to five zero five, but then all means. But, you know, I I think, you know, at this time and place, I'd like us to continue to grow to where we can be maybe a multifunction, thing. But I think the council also, you know, with all the turbulence that you talked about earlier with the the all these visitors center and and everything and and just the way things are working out, you know, I think, I think it would be beneficial for all of us to slowly get into it.

You know, next year, you present a budget that doesn't, you know, have, you know, costs that are in '26 and other things that went wrong or anything. And and I think those conversations, those quarterly conversations are gonna help us get there a lot faster too. So I think when we meet at a quarterly meeting and and discuss all this, you know, I I think we're gonna head into a position to where, you know, eventually, you're gonna be back into full dock dockets. You know? But right now, I would concentrate on that five zero five and just be the visitor center, up until that point. And then, you know, as we work through things and kinda get more comfortable with each other, I think we're gonna be successful.

K.

Go ahead.

Can I can I make

a proposal to the council? Because they have come to us with such good faith and have been so amenable to try to meet our needs, could we perhaps consider that at the second quarterly meeting, if they have established deliverables that we agree are reasonable and they believe that they can exceed those deliverable deliverables with additional funds, we can give them an opportunity for a request for a small additional stipend to help to grow their operations if it seems that they're being successful over the period of the first half of next year.

I, you know, I think it's too early to say. I'd I'd say let's let this work out and kind of permit and go forward, but let's hear from the other council members.

I would like to see, them be successful at what they do best, which is being the visitor center first. Let's see that play out over the year. Let's get back another audit, and then we can reevaluate and move forward together.

Lester?

To me, this is part of this quarterly move along. So if things are you know, if you're up on step and things are moving forward more quickly than we anticipate and things are going better, we need to take a look at that. You know? Things change every day, every month, every quarter. So we're not gonna go into this with blinders. Okay? We're gonna be open. If there's opportunities that make sense, we would want to take advantage of those opportunities. Right? But we also wanna remember remember about this discussion tonight and our primary goal.

So let's start with that. And then, you know, we're gonna have a quarterly meeting coming up here in, first quarter of twenty six, see how we're doing. And I'm sure that we're gonna have forward progress, and let's build from there. Thank you.

I I agree with generally what Joy and Lester were saying. So Okay.

I'd just like to say that this decision is definitely going to have a terrible effect on our membership community and our businesses and what you were doing right now by not making a decision to support. I'm not saying that you need to do it now, but to walk away and still consider the fact that an additional destination marketing organization funding to cut that completely. Magdalena, you're sending the audience. How do you feel about that? Yeah.

Do you I mean, I just okay. I'm gonna let you guys go, but I just wanted to let you know that I am sorry that I am a little worked up, but I feel as though everything that we're trying to do right now is to support the member community, and I can't believe that you guys are making a decision that would disclude an opportunity to promote Valdez as a destination. It's shocking to me. And one thing, sure, make us a CVB, but then you guys would have to take the handle as the DMO, and that's in your hands now. So if you guys would like to do it, go for it.

But are you just gonna drop the whole idea of a DMO? I'm I'm just shooting straight now, you guys, because this is we're we're going way too far down the rabbit hole. Is that really what you wanna do? You want to close us being a DMO, and that's okay. But then who picks up the the tab for the visitor's guide? Nobody? Do we not have a visitor's guide then? Who picks up all the marketing tab? There's nothing on that budget.

And I just wanted you guys to walk away and think

about that because I'm starting to a little

So, I mean, just to clarify, like I said like I said earlier, you know, if if there's opportunities to have some kind of a combination of a visitor center and a DMO given, you know, the financial, you know, line that we're drawing right now. I mean, we're open to the board, you know, bringing that back to us. I'm not saying, you know, if if maybe you're not the full DMO that you wanna be right now, but maybe you can be part part of that. I mean, I'm not saying you I'm open to what you guys created if they can come up with with kind of the budget, you know, restrictions that we're giving you, and then grown from there. Whatever you think is best. I understand it's gonna be some difficult decisions, but, you know,

if can

do a

little bit I understand if you can do a little bit of that, great. If not, yeah, I do appreciate the point, director Harris.

And Okay.

I appreciate you bringing that up.

Go ahead, Jimmy.

I I I do think that the visitor's guide is an important part of what you guys do. That's why I was I'm open minded to an additional stipend for future activities. If, for example, if truly and I know that this budget is just, you know, the best of your ability projecting forward. If truly this budget means that you cannot create a visitor's guide, then I think that's a discussion that we are gonna have to have at the first quarterly meeting because to me, that is one of the more important or or one of the many important services that you guys provide to our community. And you're absolutely right.

The destination marketing, although that is a part of a visitors bureau, that is, you know, also an entirely separate thing, that that takes additional staff time and additional effort, additional investment. And, I do wish that we had had more time with your proposals. I I I think that honestly this was a little this discussion was a little pretty premature with we we have not really had the time to discuss all of the deliverables that were proposed in in each of your itemized proposals. I personally would like to have more opportunity to do that because I agree with you. Your your five zero five proposal, it it doesn't include some of the services that I consider very important.

Although, maybe if we had a little bit more time to pick and choose, we could we could say, hey, can you do a little less of this, a little more of this? You know, maybe we can come to a compromise. I feel like we we really didn't have enough time to do that in this meeting.

Okay. So the deliverable would be go back and work the budget, come back. We need to schedule one more meeting with them with the finalized version of it, of their budget in the work session?

I guess that that's at discretion of counsel. Where we left it last night was with the approval of the budget is that the money is appropriate within your contingency reserve to get access to it will require resolution. So, whatever timeline, you know, they can achieve that and present it to you, whether that's just an action item in a regular meeting or another work session, I'll leave that to your discretion. But, that's kind of the way way we left it with the approval of the budget.

Okay. So it'll come to us in a resolution, correct, with their approval of their board, and then we'll get there in a resolution. Mayor.

I have a

Go ahead.

Oh, if if counsel could, please just make it clear as to if, for one, do you want another meeting with them prior to the resolution coming forward? We need to know that so that I can get that on the schedule. And and, also, what what deliverables clearly that you would like them to have to you in advance of any meeting and that that has to be provided so that you have adequate time to review those documents, please?

So, I mean, we talked about yeah. So, I mean, I I think we need to have a work session at this point. I mean, I think we need to see their, you know, deliverable is the you know, their draft final budget to us is one deliverable is what I'm understanding. And then we talked about deliverables of the VCBB. We wanna talk about that.

So I guess I would I would I would ask that they come up with some deliverables to present along with that because a budget is hopefully gonna give us some deliverables. So what those things are, you know, based on this discussion, you know, I think you could glean on what some of those deliverables would be over the next year and present those during the work session. So the the draft budget during a work session and those deliverables that we that we talked about that we, you know, that council member, Devin's brought up so that we can track progress over time. I think those are the two things that we need to see at a work at a work session before the resolution makes sense to me because I think that's gonna be more of a still back and forth conversation as opposed to an action item.

Okay. So how how much time do you guys you wanna get back with Sherry to schedule the work session instead of, you know, trying to pick a date tonight? Just get back with Sherry and figure out what what it is, we'll go from there.

Yeah. And, Lisa, do you under do do you guys understand exactly what it does that council is asking for?

Okay. So council is asking for a final draft budget, quarterly meetings, can be done, steady growth progress, as well as, it sounds like, some deliverables Measure deliverables, measurable key performance indicators that can help them understand whether or

not we're meeting our goals.

And then I also think there was one more. See if Lester had one.

All I have is a final they want a final budget, the quarterly meetings we talked about. But and then we talked about annual reports, but that's just moving forward.

Yeah. Yeah. Moving forward, that won't that won't happen anymore. We'll make sure that that's on the contingency for our continuity plan as well.

You guys good with that? Okay. Okay. Well, then it's the end of the work session. Thank you very