Tourism board may audit groups' finances

BY CHUCK VANDENBERG

PCC EDITOR

FORT MADISON - Two local groups that receive funding from the city's Hotel/Motel tax funds, may have their books audited by the city's tourism commission, who doles out the monies.

At Thursday night's meeting of the Fort Madison Tourism Commission, which is chaired by Mayor Brad Randolph, the commission was frustrated in figures turned in by Andy Andrews of the North Lee County Historical Society.

During the two-hour meeting, at several times, Andrews, who's the president of the NLCHS, had to go up to the commission table and look and try to explain the finances to Randolph and the other commission members.

Commissioner Julie Hellman said she couldn't understand the numbers and asked that Andrews bring back a cleaner version of the funds and where they were going.

"I'm not an accountant, but I just don't understand this balance sheet," Hellman told Andrews.

Hellman said she didn't believe that the tourism dollars should just be going into the historical society's operating funds because they are supposed to be earmarked for promotional and tourism-oriented projects. Hellman said those funds shouldn't be used for operations.

Andrews said the money did go into the organization's general fund. Hellman asked about any savings or other assets the historical district has on hand.

"There's no balance sheet here and if we don't have the right to ask these questions, someone tell me."

Andrews said funds come into the historical society specifically earmarked for projects like Brush College school, the battlefield project, and even maintenance projects and all those funds go into those accounts. He said the group also gets interest of funds with the Lee County Community Foundation.

But Randolph agreed the financial documents were confusing and don't show the true picture of the society's financial standing.

"I think you're on track," Randolph told Hellman, " If someone accepts public money they are subject to public scrutiny."

"But my concern is that you're doing a lot of projects and throwing all the money in the same pot," Randolph said. "And that's a problem because we don't know where that money is going. And you're accepting donations and other funds and that's all going into the same till."

Andrews said the NLCHS has a non-profit arm called Friends of The Old Fort, which he said is a subcommittee operating under the NLCHS umbrella.

"You've accepted money as a committee, but it's actually NLCHS? Is that what you're saying?," Randolph asked.

"Yes," Andrews said.

Hellman said she wasn't in favor of continuing at the current rate if that money isn't going to anything new.

"When I looked at this, and I'm not an accountant, but I didn't understand why there is no balance sheet. If we keep giving you the 9% we're not investing in anything else new and we're not trying to generate any new business at all. So we need to decide if that money is going to the right place."

"It's going into the general fund of the historical society," Andrews said. "So what I'm hearing is that you don't think we deserve anything at all."

Hellman replied that wasn't the case but she wanted a better accounting of the funds.

"I personally feel we should have a better accounting of the funds that are going to NLCHS. If nobody agrees with me we'll move on and decide how much we'll do again. But I think we need a better understanding. If Brush College is just going to sit there, we should do something with it."

Randolph involved City Manager David Varley in the discussion by asking if a 7-year snapshot would help clear up the financial picture.

Varley said if the same documents for the seven years were provided in the same format, it wouldn't help.

"If the numbers cover the same time period no, because you're getting the same numbers for the same time period," Varley said.

"By dumping them all in one till, you can say this is going there and that's going there but the bottom line is you made $10,000 and that's half of what the city gave. And you have $58,000 in the bank that could carry a non-profit for quite a few years. So you have to decide if you want to help their fund balance so they can take it and move it and maybe spend it on the battlefield, because they do have some large projects they're working on."

Hellman asked how much he had in the savings account and Andrews said he didn't have that with him.

Randolph also had audit language put on the agenda because he would like the commission to have the authority to request, and pay for, audits on entities that receive more than $5,000 for two years or more during any three year period. The commission usually caps contributions to entities at $2,500 per year and reduces the amount they get each year they come back with hopes that the events become self-sustaining. The NLCHS and Fort Madison Area Artists Association each get 9% of the hotel/motel tax, which would make them the most vulnerable to an audit by the commission.

The commission did not ask for any audits, but did table both groups' funding request until January when both groups were asked to bring back more clearly defined sheets.

Brian Riggs, director of the FMAAA, also presented to the board on his funding request. The board seemed to be more comfortable with his financial documents, but when Riggs brought up that the FMAAA's rent payments are going towards the purchase of the building, Hellman balked.

"So you're saying that we're helping you buy that building," she asked.

Riggs said he could show the hotel/motel tax wasn't being used for that purpose, to which Hellman said she'd like to see a better accounting of his documents including what savings the FMAAA had on hand.

Riggs said the FMAAA has had great successes with lots of media coverage over the past year and asked the commission why the FMAAA and the NLCHS each get the same percentage. He said the commission's funding of its history cumulatively, which is close to $122,000 per year, including the fort, the arts doesn't get the same attention.

The commission gives the Old Fort $100,000 per year to the Fort and then 9% to the historical society. Riggs said if the commission were to quantify the results they would see the FMAAA is doing better than the historical groups.

"We're the only entity that's been transparent with their money and some of the other entities haven't been so transparent."

Randolph said he is not looking at going over 9% for either group and is probably looking at lowering it or capping the amount because he feels the fund is going to diminish in the near future.

Varley said the city is looking at its first quarter in 10 years where revenues will be down and is projecting close to a $51,000 reduction in the hotel/motel money, if that carried through to the 22% decline in the last reporting period.

In other action,

- the commission voted to appoint Julie Hellman as vice chairman of the commission. The vice-chair would preside over any meetings the chairman wouldn't be able to attend.