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	Grand Forks Events Center Commission Special Meeting Tuesday, March 16, 2010 8:00 a.m. Alerus Center Meadowlark Room #12 1. CALL TO ORDER Randy Newman, Chair, called the Special Meeting of the Alerus Center Commission to order on Tuesday, March 16, 2010 at approximately 8:00 am. 2. ROLL CALL Present were David Evenson, Curt Kreun, Darrell Larson, Randy Newman and Dwight Thompson establishing a quorum. City: Saroj Jerath Alerus Center Staff: Tami Pearson, Wendy Nimens, Jeremy Linstad, Rod Oas, Charlene Wifall, Stephanie Bernstrom, Vione Jordheim, Steve Hyman Mr. Newman acknowledged and welcomed new member, Dwight Thompson, to the Alerus Center Commission. 3. REVIEW OF AND RESPONSE TO TASK FORCE RECOMMENDATIONS Mr. Newman indicated the only item on the agenda for today is to discuss and come to agreement of response to the Task Force Recommendations. Draft response was sent yesterday to the Commission. Those are suggested comments and responses. Today we are looking for comments to that draft. Alerus Commission Structure Task Force Recommendation Change the ordinance to create 6 at large members, one City Council representative and UND should be a non-voting ex-officio member. This would be a total of 7 Commission members. Term limits – 2 3-year terms with staggered terms. Commission Response Mr. Kreun asked of Ms. Jerath regarding the Ordinance the Council was working on if it indicated there was a time frame that the Mayor and Council has to act. Ms. Jerath indicated there was not. Mr. Kreun’s recommendation is that the replacement has to be in place within 30 days. Mr. Kreun indicated that no other governing body has term limits within the City. Council as members voted to exclude term limits. Mr. Larson indicated that three 3-year terms might be beneficial as there is a learning curve and it may be helpful to have the third 3-year term. Mr. Kreun stated the idea behind it was to gather more input and create more diversity. With a limit you would get someone else with a different perspective. Concluding Response These are City Council initiatives. Task Force Recommendation Quarterly Reports to the City Council with cover page of narrative highlights. Commission Response Mr. Newman indicated that quarterly reports had been provided to the City Council for a number of years and the Commission got away from it. There has been past practice of developing a quarterly report. We will go back to doing that report. Monthly information will still be given. Commission will also review who the quarterly reports are distributed to. Concluding Response Concur. Task Force Recommendation Review Committee Structure. Commission Response In the past, there was a Finance Committee in place but it has since become more of a Committee of the Whole. Mr. Larson suggested that the Commission review the bylaws regarding Committee Structures. Mr. Evenson suggested going forward we have a Finance Committee simply that it is easier for fewer people to meet than the entire commission and a lot of the issues require more time than at a monthly meeting. The Committee would then come back to the entire Commission with their review and seek the Commission’s ideas. Mr. Newman asked that it be a monthly agenda topic to study the bylaws and the possibility of forming standing committees and for what purpose they would exist. Concluding Response Committee structure will be reviewed. Alerus Commission Activities Task Force Recommendation - Accounting Coordinate accounting activities with the City. Look at having the City handling our finances; all income and pay all expenses. Commission Response Anything we could involve the City in from an out sourcing perspective we should look at. There are some differences noted by staff with some special circumstances. We could work with the City and find out what activities they can assist us in or take over and then what activities we should have at the building level. This would be a project that Wendy Nimens, Alerus Center Director of Finance and Saroj Jerath, City Finance Director, should work on to identify the accounting activities. If there are Commission members who want to participate in that discussion it would be beneficial. The Commission will comply with all policies and procedures of the City. Concluding Response We will work with the City Finance Department on what activities can be coordinated. Task Force Recommendation - Commission Meetings The Commission and its standing or special committees should comply with the provisions of the Grand Forks City Code, Section 24-0203(f). Commission Response Mr. Newman indicated that we have requested an opinion from the City Attorney and have received it. We will comply with Mr. Swanson’s, City Attorney, recommendations. These recommendations give guidance on the minutes and staff is in compliance with sending them to the City Council. Mr. Kreun indicated there was a personal situation that there was a complaint to the Attorney General’s office based on a news clip. It was dropped as there were no findings and the Commission was in compliance. Mr. Kreun indicated that it is the Commission’s belief that we have complied with all open meetings and we will continue to do so. Concluding Response The City Attorney has provided us with guidelines that we will follow. Task Force Recommendation - Commission Financial Reports Financial reports should have a narrative highlighting the period being reported with an explanation of gains or loss. Commission Response Ms. Nimens indicated that she has been doing a written narrative which has been included with the Director’s reports in the packets. Mr. Newman requested that she review it and it be written in laymen’s perspective. It should be just an explanation of the expenses and revenues. Mr. Thompson will provide input for the financial reports and the Quarterly Report. The first report will be provided after the first quarter of this year. Mr. Evenson suggested adding a forward look or anticipation to the quarterly report of what is happening and tie it together with a narrative. Concluding Response We will enhance our narratives and highlight expense and revenue, any extraneous event or effect and also provide a look forward on a monthly and/or quarterly basis. Task Force Recommendation - Budget Commission should not financially obligate the City in excess of the Council approved budget. Commission is strongly encouraged to stay within its budget and strive to create a reserve fund. Commission Response Mr. Newman indicated there should be an understanding and agreement that any expenses above a budgeted item should be identified at the Commission level and they should discuss and approve or not approve the expenditure. Mr. Hyman indicated that we have another banner year in catering. Expenses will go beyond the budget which is in reality a good thing. Not every budget excess is a bad thing. Our annual goal would be to have a balanced budget. History of the Alerus Center is that there has only been one year that we have had a budget that revenues exceeded expenses. Mr. Larson suggested we don’t indicate that we forecast a balanced budget as it was something that we could almost never meet. In this particular statement there would be no particular reason to state this. Mr. Newman indicated that the Community as a whole would need to answer what is an acceptable level of performance at the Alerus Center. This would be something for the Commission to discuss throughout the year and identify and communicate this to the Council. Mr. Larson suggested to delete the portion of the sentence “is always” and change it to “has been” forecast to come in at 0. Mr. Kreun indicated the history was that the budget was budgeted as the Commission saw fit and losses were incurred in the beginning. The Council wanted us to be realistic and if it is negative they would look at it. Attitudes changed and the Commission was told they can’t have a negative number and the Council gave the direction to balance it back to 0. Mr. Kreun suggested that whatever is decided we get it in writing and then indicated that this is the policy we will try and follow. Whatever that is, it will still need to go to the Council for approval. Mr. Newman indicated that one of the reasons the Commission split out the operating and the event fund is that the operating planned events ought to have more predictability and you should strive to manage that. The event fund is harder because you don’t control the event or the attendance at events. Mr. Newman prefers the separation of those and the Commission needs to do a better job of explaining the differing make-ups of the facility. Mr. Larson requested dropping the second sentence to our response as it serves no purpose. Mr. Evenson suggested looking at our nine year average percentage of revenue vs expenses then start growing it in realistic increments until it gets budgeted Mr. Thompson indicated a lot of the discussions was whether or not to calculate the tax revenue or not. Mr. Nemwan indicated we have always counted it in as a source of revenue. The tax increases over the years. Council has asked us to report it not including it as revenue. From a budget perspective, it should be included in the budget as it is a source of revenue. If separated out there is no way we would show a balanced budget. It is a regular source of income for the Alerus Center. Mr. Kreun indicated that the Task Force did not indicate that we needed to specifically address this. Mr. Thompson wanted a common understanding that the tax is included as part of the revenue. Concluding Response The Commission’s annual goal is to attain it’s Council approved budget. Task Force Recommendation - Large Concerts If the Commission wants to sponsor a major event not budgeted, it should request the City Council to have a non-budgeted expenditure approved. Commission Response Mr. Newman indicated that any time we are at risk of loss with a concert, we should discuss and get joint approval with the council. In the past, a concert could come in and bear 100% of the gain or risk. These have gone away in the last few years. Lately to meet our mission statement and get an event we have either co-promoted and the ones most recently we bore 100% of risk. This needs to be a greater discussion as those could be beyond a particular level of what is the acceptable amount of risk. Any risk we take, we need to have the Council involved with it. Currently we don’t have an event approval process including the Council and that would need to be created. Unless we do this we are handcuffing the Alerus Center from fulfilling its mission. Mr. Hyman indicated that time frames vary but typically there would be enough time if there was a system in place. A primary issue would be what is the benchmark level. We need to go back and re-establish the event fund. Mr. Newman indicated that the Commission has created an event approval process with procedures to follow to do the best job possible. There are always factors we don’t control. There are event procedures in how we approve events using this fund. The Commission would take certain events that would qualify, show the Council how we would underwrite the event and get their approval. On events that we had a loss they were never approved thinking we would have a loss. Mr. Newman indicated that we would be able to go into executive session to keep the information from our competitors. We have a mission to provide those events to the public and without an approval process the Commission is not likely or willing to take the risk without the Council’s involvement with it. This is a number one priority to create that process. This may not only be concerts but major conventions/conferences as there may be a convention or major sporting event we would be willing to use event fund dollars towards. Mr. Kreun indicated that the Council will need some direction on what is the information that Staff gathers to put into that packet for approval. If it can be shown that the homework was done than we can show we are in compliance. Mr. Hyman and Ms. Nimens along with two people from the City Finance office will identify what is needed and then be brought back to the Commission to assign one or two members and then forward to the City Finance Committee. Concluding Response A system needs to be developed and a procedure that will enable large events whether they are concerts, conventions or sporting events to be reviewed and approved by the City Council. Task Force Recommendation - Fiscal Matters Commission should continue to keep and file appropriate books, files and records and file with the City Auditor. There should be an annual audit and all budgetary practices should be in accordance with City Ordinance. Commission Response The audit is part of the City’s audit so it becomes part of the information given to the Council. We now have a separate management letter and the auditors will present its audit findings to the full Commission. Ms. Jerath indicated that once the audit is completed, then those procedures will need to be followed including how the expenditures can be classified. The Commission is in compliance and will continue to file information with the City Auditor’s office. The City also has a complete file. Concluding Response We have and will continue to file all related records with the City Auditor. Task Force Recommendation - Mission Statement Commission should review its mission statement in light of current and future competition. Commission Response Mr. Newman stated the budget reflects how we meet our mission statement. The Commission’s meeting agenda tomorrow evening includes a review of the past nine years of the Alerus Center. This will show changes of the Alerus Center and how we have shifted the mission statement. There are significant differences between the years; in attendance and bottom line impact. Over the last two to three years our advertising and suite revenue is down $250,000 from two years ago. These are results of us not bringing events and that is a concern. The Commission will use the information presented tomorrow night to make better decisions. We have shifted the mission statement much more towards conventions, weddings and catering. Catering has doubled in nine years. Mr. Thompson stated that it would be good to balance not only what has been done but with what we are going to do. Concluding Response The mission statement is currently under review. Task Force Recommendation - Business Plan Commission should continue to review and update its business plan in light of competitive factors and opportunities with Canad Inns Commission Response Mr. Hyman and Mr. Newman met with the Canad Inns Executives from Winnipeg and agreed to do this on an annual basis. There is also a weekly sales meeting with the Canad Inns. Mr. Hyman indicated that we have presented a 2009 Business Plan and we will continue to provide an annual Business Plan to the Commission and Council. Mr. Newman indicated that there has been some discussion of Canad Inns interest in taking over some operations of the Alerus Center. The Commission has had that discussion with them prior to building and they were given the opportunity to present a business plan. Catering is growing and has become a significant part of our entity. Our main profit center is catering and even though the Canad Inns provides excellent service and quality, we have chosen not to use them for that purpose. The entities work very well together and the Commission will continue to have the relationship reviews. Concluding Response The 2009 Business Plan was presented to the City Council that highlighted the Canad/Alerus regional status and we will present on an annual basis a Business Plan for the Alerus Center. Task Force Recommendation - Review of Relationships Commission should strengthen its relationship with the Convention and Visitors Bureau, the University of North Dakota and Canad Inns. Commission Response Mr. Hyman and Mr. Newman have had meetings with the entities. There should be a process for an annual relationship review and that review is discussed with the Commission. The Commission at the CVB’s request wants to meet with the Commission at some time. It was suggested that we take out the portion indicating past two years from the response. Concluding Response The Commission always welcomes the opportunity to strengthen relationships through the community and region. We are especially proud of our relationship with Canad Inns, UND and the CVB. Task Force Recommendations - Convention Strategy Commission should direct management to develop a streamlined process for better scheduling with the CVB and Canad Inns. Commission Response Ms. Wifall indicated that the single source one-stop shop is being worked on. Staff continues to have weekly meetings with Canad Inns of which the CVB attends monthly. Trying to get to a single point of contact for clients is being worked on but is difficult in some areas as staff cannot book hotel rooms and Canad Inns doesn’t know how to book space here. Taking care of the client is top priority to all entities and they will continue to work towards that. Mr. Newman asked that the Commission draw upon VenuWorks and come back to the Commission with best practices for a situation similar to Grand Forks. We can’t compare ourselves to other cities that have joint hotel/conference facilities but we can find out how other communities with similar circumstances do it. Concluding Response Alerus Center staff will research and bring back examples from around the country of systems that are in place for privately run hotels and publicly run convention facilities. Task Force Recommendation - Management of Events Center Commission should review VenuWorks for management activities and events scheduled through VenuWorks. Commission Response Mr. Newman indicated that these are scheduled annually. Discussions on 2008 and 2009 are hoped to conclude in the next few weeks. He has asked Mr. Larson and Mr. Kreun to assist with that. We will review our future relationship with VenuWorks as well. Mr. Peters is aware of this and he is coming tonight and will be at the Commission meeting tomorrow. They will discuss ’08 and ’09. Concluding Response We hope to conclude the discussions on 2008 and 2009 and going forward we will review our future relationship from all aspects. Task Force Recommendation - Commission/Event Center/Public Relations Commission should engage a professional to develop a net economic impact model. Commission should identify a spokesperson. Commission Response This has been done and commissioned by the Mayor’s Office. The Commission does have the understanding and are now reporting the economic impact on a net impact perspective. The Commission will try to do a better job with media relations. Concluding Response The net economic impact model is currently being developed by Dr. David Flynn of UND. The spokesperson for the Alerus Center is the Executive Director and the spokesperson for the Commission is the Chair. Task Force Recommendation - Contract Review Commission should have all contracts reviewed by the City Attorney. Commission Response The Commission will comply with that request. Concluding Response The City Attorney will review all contracts and when possible the City Attorney will produce a boilerplate contract. Task Force Recommendation - Amendment of Home Rule Charter City Council shall call for a vote to amend the Home Rule Charter to allow excess 3/4% sales tax to be used for operations, promoting and/or marketing. Commission Response The Commission has taken the leadership in the past couple of years. The Commission is in agreement and it now becomes a City Council action item to do that. The Commission has wanted to build an endowment for future expenses. Concluding Response The Commission concurs and would like to see this item resolved as quickly as possible and would strongly suggest that endowments be put into place that will secure the capital and operational needs of the Alerus Center in all subsequent years. 4. ADJOURNMENT A motion was made by Mr. Kreun to adjourn. Seconded by Mr. Thompson. Meeting adjourned at 9:20 am.