Tourism Commission meeting by conference call
July 10, 2009, 2:00 p.m.
Members in attendance: Chairman Lt. Governor Peter Kinder; Senator Jack Goodman; Rep. Maynard Wallace; Rep. Gina Walsh; Marci Bennett; Sharon Garrett; Scott Hovis, Eric Rhone, Kelly Swanson. Member absent: Senator Ryan McKenna.
Others in attendance: Bob Smith, Bob Hain, Suzy Schneider, Debbie Steffan, Carol Weller, Mary Oberreither, Jeff Wohlt, Cyndi Morris-Sapp, Becky Heeren, Luci Branyan, Tracy Otto, Sarah Luebbert, Stephen Foutes, Missouri Division of Tourism; Rich Aubuchon and Gary McElyea, Lt. Governor Kinder’s office; Tony Messenger, St. Louis Post-Dispatch; Bob Watson, Jefferson City News Tribune; Steve Walsh, Missourinet; Jason Noble, Kansas City Star; David Lieb, AP; Chad Livingood, Springfield News-Leader; Rudy Keller, Southeast Missourian; Mary Sanchez, Kansas City Star; Dale Singer, St. Louis Beacon; Marshall Griffin, KWMU-St. Louis; Gary Figgins, Missouri Travel Council; Ramona Mormann, Missouri Hotel & Lodging Association; Amy Supple, Chillicothe Tourism; Chuck Martin, Cape Girardeau CVB; Andy Thiem, Ste. Genevieve; Lynn Kempker, OA Budget & Planning; Leah Chandler, Hoffman/Lewis; Katie Steele Danner, DED.
Lt. Governor Kinder called the meeting to order at 2:05 p.m. with a roll-call of Commission members. Lt. Governor Kinder asked Bob Smith to provide an update on FY10 budget and what directives we’ve received. Bob Smith indicated that he received instruction from DED to prepare for reductions of $5.7 million and seven FTEs. With input from the commission, we prepared a budget of $17,744,000 which reflects approximately a 24.6% cut with the largest cut taken by advertising; Tour of Missouri race would remain at $1.5 million; Co-operative Marketing remains at $4.1 million. Regarding FTE cuts, the proposed plan includes converting the Welcome Center part-time employees to contract labor which would provide four FTE reductions; the other FTEs would come from vacant positions in Jefferson City. Mr. Smith indicated he was later instructed on July 8 by OA to submit a voucher system for payment; basically our funds were frozen pending OA approval of expenditures. He was further instructed that we were not to pay any funds to Tour of Missouri. The planfor budget and FTE reductions was due to DED by July 14. We received word from DED July 9 and confirmed today that our budget was $20,601,000, which would indicate a reduction in the $5.7 million cut, now a $3.4 million reduction. A revised budget reflecting this new budget scenario has been prepared and sent to commissioners just prior to this meeting.
Lt. Governor Kinder summarized: We were instructed to prepare a plan for a $5.7 million budget reduction, which also allowed for $1.5 million funding for the Tour of Missouri; now we’ve been instructed to prepare for a $3 million budget reduction; and we are to submit vouchers to DED for payments. Bob Smith indicated that the first set of vouchers has been submitted and payment processed this afternoon. Lt. Governor Kinder indicated he was unaware of any other state agency with this type of spending restriction.
Rep. Walsh inquired about the benefit of contracting part-time employees. Mr. Smith indicated it frees up the FTEs with the part-time people at the Welcome Centers still employed at the same rate they’re currently making. Rep. Wallace asked if the $1.5 cut of Tour of Missouri was part of the $3 million recommended cut. Mr. Smith indicated that the $1.5 was not part of the cuts.
Marci Bennett indicated that although she has qualms about the Tour of Missouri for the long-term, we’ve made the commitment to it. Sharon Garrett concurred, contracts have already been signed. Lt. Governor Kinder indicated that based on legal advice, we will incur breach of contract lawsuits; we’re within 60 days of the event. The fallout of the $1.5 million cut will be more dollars in legal fees and lawsuits from vendors, and will destroy the credibility of the Division of Tourism and the State of Missouri. Kelly Swanson indicated that we need to meet all the obligations to which we’ve made commitments. Senator Goodman shared the opinion of fellow commissioners to make good on our obligations; it’s a separate issue if we commit to do this race in the future. Lt. Governor Peter Kinder indicated that there is the issue of the independence of the Commission, with the restrictions on our spending; Lt. Governor asked for input from our two newest commissioners. Eric Rhone concurred with fellow commissioners to honor the commitment for this year, and inquired about our commitments for coming years. Lt. Governor Kinder indicated that we signed a 3-year agreement in 2006-2007, for the races in 2007, 2008 and 2009. Scott Hovis indicated we need to honor the commitment for this year.
Marci Bennett asked how we go forward with OA not releasing funding for the race. Lt. Governor Kinder indicated that the Commission would proceed with the necessary discussion to address of the issue of the restrictions on our spending. Rich Aubuchon, with consultation with legal counsel, indicated that type of action is unprecedented and usurps the power of the Commission. Tourism is a Type 3 agency, which is autonomous is most regards. Rep. Walsh suggested seeking a legal opinion from an outside agency that is not involved in this. Rich Aubuchon concurred. Kelly Swanson suggested that this appears to be a tug-of-war between the Governor’s Office and the commission. Rep. Walsh questioned whether this is the first time something like this has occurred; under the previous administration the division experienced budget reductions. Rep. Walsh indicated frustration with the commission not meeting on a regular basis, no election of officers for the last year. Kelly Swanson indicated frustration with that as well, indicating she feels we’re not doing our jobs. Lt. Governor Kinder indicated he would take the suggestion about the Commission meetings and asked what we could do today regarding the budget. Lt. Governor suggested he could call the Governor, make a personal plea.
Katie Steele Danner, deputy director of the Department of Economic Development, inquiredabout funding for the Tour of Missouri and the Division of Tourism. She’s trying to find out as much information as she can to help us make our case to the Governor. Ms. Danner inquired about the Tour of Missouri Inc., whether it’s a private company and what their budget is for the race. Lt. Governor Kinder indicated that Tour of Missouri Inc. is organized as a 501c3 under the IRS and is set up to promote health and wellness. The Tourism Commission voted unanimously in April to provide $1.5 million in funding for this year’s race. Ms. Danner inquired about the board of the directors of Tour of Missouri Inc. Rich Aubuchon indictedthat information has been provided to DED; the board of directors is set up a 501c3 and the information has been provided to Doug Nelson by Bob Smith. Doug Nelson holds the deputy director position in OA. Lt. Governor indicated that he was appreciative of Ms. Danner’s willingness to help make our case to the Governor. Ms. Danner indicated that there is no question that this event is beneficial to the state; she’s trying to gather the information that shows the total state resources involved in this event. Lt. Governor Kinder asked whether the spending/voucher issue is temporary. Ms. Danner indicated that she learned of this spending voucher system at the same time asthe division staff. She’s an advocate for us and feels certain this is a temporary situation until we get our arms around the expenditure restriction challenges.
Rep. Wallace asked if there was a budget committee meeting on Monday. Lt. Governor Kinder suggested the budget committee go forward with their meeting on Monday.
Motion: Bennett (Stay with our commitment to Tour of Missouri for FY10 with a budget of $1.5 million.)
Second: Swanson
Vote: Unanimous
Motion: Scott Hovis (Adjourn the July 10, 2009 Commission meeting.)
Second: Kelly Swanson
Vote: Unanimous
Meeting adjourned at 3:10 p.m.
Respectfully submitted,
Suzy Schneider
Executive Assistant to the Tourism Commission