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Committee Minutes

Grand Forks Events Center Commission

Regular Monthly Meeting
February 17, 2010
Alerus Center

CALL TO ORDER
Randy Newman, Chair, called the Alerus Center Commission meeting to order on Wednesday, February 17, 2010 at approximately 7:32 a.m.

ROLL CALL
Present were David Evenson, Curt Kreun, Darrell Larson and Randy Newman establishing a quorum.
City: Saroj Jerath
Alerus Center Staff: Rod Oas, Stephanie Bernstrom, Charlene Wifall, Vione Jordheim, Wendy Nimens, Steve Hyman, Tami Pearson

REVIEW OF AGENDA
Mr. Newman requested to add the following items to the agenda under “Other”:
1. Meeting dates for the Commission to respond to the anticipated recommendations from the Task Force.
2. Joint Board meeting of the CVB and Alerus Center Commission as requested by Julie Rygg and Jody Hodgson.
3. Bid Process on Furniture, Fixtures and Carpet remodeling.

APPROVAL OF MINUTES
Mr. Newman stated that we have been challenged to have more descriptive minutes and asked if an opinion from the City Attorney on the composition of the minutes was in order.
Mr. Kreun suggested that Mr. Swanson, City Attorney, attend a meeting to give us the information. It was stated that at one point the minutes were too detailed and then not detailed enough. Verbatim is not required but how much information is needed. This was brought up several different times at the Task Force meeting. Following Mr. Swanson’s recommendation, the Commission will make a motion and an acceptance on how to and to what extent the minutes should be recorded.

A motion was made by Curt Kreun to approve the January 27, 2010 minutes and ask Mr. Swanson to give an overview of what form our minutes should take. Seconded by David Evenson.

Ms. Jerath indicated that under Reimbursement of Funds to City, once it comes to the City for approval it needs to go to the Finance Committee and then the Council; their approval is needed to reverse the entry.

The motion and second were amended to include the change requested by Ms. Jerath. Motion carried unanimously.

APPROVAL OF JANUARY 2010 FINANCIALS
Wendy Nimens presented the financials. The YTD revenue less hospitality tax is $242,241; comparable to 2009 it is about $20,000 less. In 2009 an additional Monster Truck event was held that involved two days of additional revenue. The January budgeted revenues less hospitality taxes was approximately $288,000. Major events held during the month were NDTC Board Meeting-a two day event, Everything for Weddings, Red River Basin-a three day event, Professional Championship Bullriding-a two day event and also the Lions Club Conference-a three day event. The multiple day events had a positive gain on our catering which came in at almost $2,000 over budget. Affecting the Professional Bullriding event was the early storm warnings. That did have some affect on our attendance as it was down 42% of what we projected. The lower attendance affects Box Office revenue, reimbursed expenses, facility fee, suite food and beverage, concessions, novelty and parking. In addition, one Plan B concert was budgeted that didn’t materialize and that trickles down to those revenue items also.

YTD expenses are $382,831. Budgeted was $391,000. In 2009 expenses were down $46,000 less than current. The major contributor this month was snowfall. Utility expenses came in $10,000 less than projected for January. During the long spell of extreme cold, Xcel Energy required the building to switch to fuel oil which required refilling the tank. The negative on equipment repair is a refund for trading in old wireless mics for new ones.

The Auditors were in last week Thursday and Friday and will return this Thursday and Friday to finish. According to their agreed upon procedures they are looking into the events as they were requested to do.

Box Office currently has four events on sale – Monster Trucks Winter Nationals (held last weekend with a very good response selling almost 1800 tickets the day of the event; upper sections were sold out. Attendance was up from previous years.) Also on sale is Feast of Nations, February 27; GF Men’s Show, February 27 & 28; and East Region Girls and Boys Basketball, March 4-6.

Mr. Larson asked if filling the fuel tank was $17,000 how it was spread out in the budget to assign only $350 to January.

Mr. Newman asked if we were timing when we fill the tank, Ms. Nimens indicated that was correct. We should have a higher number in the winter months when we expect to draw. Mr. Larson stated that it could be averaged out. Ms. Nimens indicated that it was based on past practices.

Ms. Jerath asked if we inventory the fuel oil since we fill the tank but don’t use it all the same month. Then we would only expense the portion that was used. Ms. Nimens will follow-up with Brady Martz on how to indicate the fuel oil purchase when the tank is filled.

Ms. Jerath inquired on the amount due from City in the amount of $118,993.56. Ms. Nimens stated that staff will look at what that entails as the accountant has been using that as a way to track for his purposes and they are now discussing different ways to track those items. Ms. Jerath asked that the invoices be sent as soon as possible to her office.

Mr. Newman extended congratulations to the food and beverage staff and everyone booking the conferences. Catering continues to be strong and continues to be up year after year.

Labor is up percentage wise. Mr. Newman asked if that reflects additions to staff. Ms Nimens indicated that it is full-time labor; we added a Banquet and Catering supervisor hired in September. Mr. Newman indicated that if revenues don’t increase over last year that expense item will continue to become a problem.

Mr. Newman stated that snow removal is a large amount but beyond our control. As the Alerus Center uses private contractors for removal, Mr. Newman asked if there was a way for us to have the City perform those services for us at cost. Mr. Hyman indicated that it would be prudent for the Commission to direct us to contact the City Administrator if there was some way to contract with the City. Mr. Hyman indicated that with the private contractor it is very expensive at approximately $2200/inch.

Mr. Kreun indicated that if the lot could not be cleared at the same time as the streets but if there is an event and the lot needs to be cleared at the same time they are doing the streets there will need to be an investment of more equipment. Mr. Hyman indicated that it was obviously timing but with a 4,000 car parking lot and not needing all the spots on a regular basis we consider working out a contingency plan. Mr. Kreun stated that it should come back to the Safety and Service Committee if there is a potential time when we could utilize City equipment. If everything had to be done at once the Alerus could utilize a private contractor and if not a deadline type of scenario could use the City. Mr. Newman inquired on how that is expensed for other City buildings; Mr. Kreun indicated that it should be treated the same. Mr. Kreun will have the City do research and bring it back to the Commission and communicate with Jeremy on time it takes to remove a certain amount of snow and put together a projection. A back-up bid could be used in the event there was an event scheduled on a snow removal day. Gowan Construction is the backup for the City snow removal and Mr. Kreun will also follow-up on the possibility of including the Alerus Center on that bid.

Mr. Newman commented that the arena actual and the convention center actual shows that the arena due to fixed costs and revenue continues to be an issue on the arena side but we want to continue to promote the performance of the convention center. It is the heart and soul of the Alerus Center.

A motion was made by David Evenson to receive and file the January financials and forward them on to the proper City officials for distribution. Seconded by Curt Kreun. Motion carried unanimously.

MATTER TO ADOPT AMENDMENT TO THE AGREEMENT FOR 20008 VENUWORKS CONTRACT
Mr. Kreun indicated they have been waiting for some of the work that has been done by the Task Force to see if this was an issue which it didn’t come up. Mr. Larson and Mr. Kreun will meet with Mr. Swanson and review the situation that has taken place. Mr. Newman stated that Mr. Peters is intending on being here for the March 17^th meeting; the hope is that this can be brought to conclusion by that time or at least within the next month.

MANAGEMENT REPORTS
Meetings/Convention/Ballroom – Information given by Charlene Wifall and also included in the Commission packet. Additional information was requested for:
o Meeting Professionals International (MPI). It is a Canadian group of which there are two members in Grand Forks and one in Fargo. These members belong to the Manitoba Chapter as Winnipeg is the closest chapter available. It was asked if Grand Forks would be willing to give them a break to have the meetings come to Grand Forks not only for this event but other events from Canada.
o Mr. Newman inquired when the Republican Convention was last held at the Alerus Center. Ms. Wifall indicated it was in 2004 and they are anticipating 1200-1400 people with multiple banquet events for this year’s event.
o Question was asked who makes up the Sales Team when sales calls are made to Bismarck. Ms. Wifall indicated they include Alerus Center representatives; Conference Center Director, Sales Manager and Sales Associate; Canad Inns Sales Manager, along with two Sales Associates and representatives from the CVB. For joint missions they are currently laying out a calendar of visits which include Fargo, South Dakota, Minneapolis, Grand Forks and University of North Dakota.
Marketing – Information given by Tami Pearson and also included in the Commission packet. Additional information was requested for:
o Ms. Pearson indicated that the economic impact was net. Mr. Newman asked that that be included on the sheet along with a definition of the process. Dr. Flynn is revising the formula as it is pre-Canad Inns. The new formula will be on a net basis. Mr. Newman advised continuing to publicize the economic impact monthly until the recommendation from the Task Force is received and the Commission reviews it and makes a decision.
o Mr. Newman asked that any communication we have with regards to the economic impact that we indicate these are net numbers although the total for 2009 was a gross number.
Suites and Advertising – Information was given by Stephanie Bernstrom and also included in the Commission packet. Additional information was requested for:
o Mr. Kreun inquired if we are able to work with multiple year contracts. Ms. Bernstrom indicated that some clients are not comfortable with multiple year contracts and that we also do single year contracts especially with those using trade for services and cash.
o Mr. Hyman indicated that we are having a good response on advertising marketing for the marquees.
o Ms. Bernstrom indicated that she has been aggressive with sales calls. It is a wide scope she is looking at, size of business, statewide or regional.
o Mr. Newman asked what the annual cost of the marquee board from a depreciation or annual expense would be. Mr. Hyman stated that the primary cost would be a minimum 8-10 year life at a cost around $670,000. Mr. Newman indicated that a goal would be to get $80,000-$100,000 of revenue to offset that cost.
o Mr. Kreun stated we need to keep in mind that advertising has to be affiliated with the building per City ordinance. Mr. Hyman stated the marquee contracts that are being sold are for internal and external advertising.
o Ms. Bernstrom clarified they are sponsorships and are building sponsors that are presented on the signs rather than advertising only. She indicated that the clause in the ordinance says they are building sponsors and they would have interior and exterior advertising.
o Mr. Newman asked what sponsors are allowed to market on the marquee. Ms. Bernstrom indicated there were no limits but anything questionable would need to be discussed.
o Mr. Larson asked if MPI could advertise what they are doing in Canada. Mr. Bernstrom indicated they could if they had an affiliation with the building.
Operations – Information was given by Steve Hyman.
o The conference center entrance steel is currently going up.
o Furniture and lighting bids were opened yesterday.
o All of the carpet and tile work in the building is out to bid now. It was in the newspaper last Thursday and it is a three week process. Mr. Hyman indicated all of that will come back to the Commission for their review and awarding.
o Mr. Newman asked at what stage is the remodeling of the conference center. Mr. Hyman indicated somewhere near 50%. Some time was lost due to weather. Anticipated completion is around June/July.
o Mr. Newman inquired of the date for the 10^th Anniversary. Mr. Hyman indicated the 10^th Anniversary will be in February 2011 with possibility of two events. A re-grand opening for the improvements to the building in June or July of 2010 and then in 2011 a ten year celebration.
o Mr. Hyman indicated that we should begin to put together a group which would represent the City, the Commission and whoever else the Commission would want involved to order to begin planning the 10 year celebration. This needs to be done immediately. Mr. Newman agreed and that dollars be allocated towards it.
o Mr. Newman asked Mr. Hyman to comment on the bidding process that is out currently on the Furniture and Fixtures and Carpet. Mr. Hyman stated that we have received the bids on the furniture and fixtures. There were three proposals that came back in addition to two that the City Finance Department has kept. One did not have the addendum acknowledgement written on it and the other arrived late. The opinion is that these two bids cannot be accepted.
o Mr. Newman asked if City policy was followed on the bids. Mr. Hyman indicated that the City Attorney reviewed the bid packet before it became official and approved it. Mr. Newman had received several phone calls from people who have questioned the process and wanted as a matter of record to inform that the City Attorney was contacted and gave approval of the bid specifications and that we are in compliance with the procedure.
o Mr. Hyman indicated that the lighting and furniture are one bid package. For bid at this time is the carpet replacement and the tile work. These are two separate bid packages as well but they are out together.
o Ms. Jerath stated there were some concerns of the bids that were opened. Mr. Newman asked if it was not the normal procedure. Ms. Jerath indicated she didn’t know and that the City Attorney needs to be consulted. Mr. Newman asked who ultimately had the controlling of the process and who should contact the City Attorney. Ms. Jerath indicated that if the procedures are violated it should come before the City Council if they want to take action.
o Mr. Larson clarified that it was our responsibility to follow the procedures. Mr. Kreun stated that under the ordinance it is the Commissions responsibility to administer all contracts and bids through City policy. Mr. Kreun stated we need to determine if they are legitimate objections and if there is a problem we should have the City Attorney make a recommendation as to who is to solve it.
o Mr. Newman asked Mr. Hyman to contact the City Attorney to resolve the objections. The Commission can expect in March to see the results of the bids.
Food & Beverage – Information was given by Rod Oas and also included in the Commission packet.
o Mr. Oas did clarify for the Commission that a challenge of the Feast of Nations is not that it is for 1200 people but that it is a 5-course meal. It is very labor intensive and will probably have 90-100 staff working. With everything going on in the building along with renovations, reviewing and updating is done on a regular basis; the Food & Beverage Department considers this their HACCP plan (Hazard Analysis and Critical Control Program) to ensure that everything is safe.
Executive Director Report – Information was given by Steve Hyman.
o Mr. Hyman asked that the Commission review the 2010 Balanced Performance Model draft. The main focus the staff is going through is a review of all procedures, policies and practices. With the building now in its 9^th year it is important to make sure that how we have done business is still how business should be done according to what makes sense. We are also reviewing all of our partnerships. Commission was asked to read it and get back to staff with any additions/deletions.
Mr. Newman encouraged staff to create a measurement to know if items are being completed. These can then be tied into performance reviews and/or bonus determinations. Mr. Newman stated that he appreciated the work by staff and this is important in order to support the Alerus Center and staff efforts in showing there is more than just a bottom line to the Alerus Center.
o Mr. Hyman has been meeting with the Chair to review the 2010 budget. The budget was developed about a year ago, submitted and approved by the City. Staff is going back and revising the numbers in terms of how we are doing business and what business may or may not come to fruition. If needed, there will be contingency plans put into place should they be needed to reach “0” number or as close as possible.
Mr. Newman would like to meet before the March meeting. The Commission’s philosophy on the budget is to have balanced expense and operating which includes the hospitality tax as that is part of the revenue. The Commission needs to discuss what is an acceptable range, with the understanding that we strive for a balanced budget and to have more involvement on a monthly basis.
o Mr. Newman will speak with Mr. Peters regarding the VenuWorks review. He would like to propose an incentive plan with the goal of aligning everyone’s interest, VenuWorks, the Executive Director and Staff. The Commission would then be able to show the public that there is a fixed portion of compensation to a manager for the work that they do. A bonus pool can be tied to both financial and non-financial objectives. Staff has been working on a contingency plan if needed.
o Mr. Hyman made note the amount of detail that goes into the event forecasting of the expenses and revenues and how a single event is carried out all the way through. It is an extremely detailed formula based on the history of the building and goes into every workable revenue or expense line item.
o Mr. Newman reminded Commissioners that the March meeting was changed to March 17^th. Steve Peters will be here that week. Mr. Kreun and Mr. Newman will be meeting with him and Mr. Hyman to review both VenuWorks as well as Mr. Hyman.
o Once the Task Force recommendations are received, Mr. Newman requested that they be reviewed as a Commission and then schedule an annual meeting with the Task Force and the Council to respond to those recommendations and to also review the budgeting process; helping people to understand the amount of work and detail that goes into estimating the revenues and expenses.
o Mr. Hyman indicated tentative plans to hold the Commission meeting at 7:30 am on the 17^th of March followed by a luncheon or dinner with the Council that same day for a response to the Task Force Recommendations, a review of 2009 and a look at 2010. Mr. Newman asked all Commission members to contact Vione Jordheim of their availability for lunch or dinner on the 17^th or breakfast or lunch on the 18^th. It will then be coordinated with the Council and the Task Force.
o The draft recommendations that were distributed at the Task Force meeting on February 11 were distributed to Commission members. Mr. Kreun indicated that once the Task Force recommendations are completed they will be distributed to all the Commission members and Mr. Hyman. The Commission will then give their response to the Task Force. The Commissions response will go directly to the Council.
o Mr. Newman indicated that a meeting to review the recommendations be scheduled. The meeting will be held at the Alerus Center as the main meeting place with a speaker phone set up to conference in members that cannot be in attendance. An agenda will be posted and minutes will be taken.
o A meeting will also be scheduled to review the 2010 Budget.
o Mr. Hyman stated that he has had some email exchanges with Julie Rygg, CVB Executive Director, concerning areas she would like staff to address which Ms. Wifall is working on. Staff continues to develop the relationships with the CVB and Canad Inns. Staff is currently waiting for a response from Canad Inns to meet with them to do an annual review of their relationship. Mr. Hyman and Mr. Newman met with Jody Hodgson, Board Chair and Julie Rygg of the CVB. Ms. Wifall indicated that sales meetings are being held with Canad Inns weekly and with CVB on a monthly basis. Mr. Newman indicated that they also extended the relationship to REA asking if there was a community event to work on together. The possibilities to work together would benefit both. They inquired if REA would consider the Alerus Center for their events if the event was beyond the ability to host on their own (Mr. Hodgson indicated that number would be more than 250), Mr. Hodgson was receptive to that. A joint CVB Board and Alerus Center Commission meeting were requested and will be scheduled.
o Steve Hyman and Rick Duquette, City Administrator, discussed which of the City Department Head meetings Mr. Hyman should attend to provide updates on the Alerus Center. It was decided that Mr. Hyman need not attend every meeting but due to the importance give an update on a monthly basis. Mr. Hyman will be attending the Business Government Alliance Meetings at the Chamber to give the business community updates on the Alerus Center and to promote the convention and arena use to the Chamber.
o Mr. Hyman stated that surveying of our clients is very important and is predominant throughout the 2010 Balanced Performance Model.

CONFIRM 2010 MEETING DATES
Vione Jordheim reviewed the 2010 meeting dates: March 17, April 28, May 26, June 23, July 28, August 25, September 22, October 27, November 24 and December 22. Mr. Newman indicated that he may not be available for the July 28 and October 27 meeting.

The November and December meetings will be moved a week earlier to November 17 and December 15 as they are currently scheduled during Thanksgiving and Christmas week.

The Commission meetings will continue to be the 4^th Wednesday of the month except for the ones changed which include March, November and December.

OTHER
Mr. Newman requested that the Commission continue to ask the Mayor and the Council to fill the vacancy on the Alerus Center Commission. There are currently two vacancies. One of the proposals of the Task Force recommendation is to make the UND position an ex officio; therefore we may have three positions to fill.

Mr. Hyman there is also a request to change the language within the Ordinance to allow the first vacant position to be at large.

Mr. Kreun asked that we request of the Mayor to bring the proposal to the next Council meeting.

Mr. Newman will write a letter requesting that Sheila Gerszewski’s vacancy be filled immediately. With Sheila’s resignation the Commission also needs to fill the vacancy on the CVB Board. Mr. Newman asked that the CVB representative monthly update be made a part of the agenda.

ADJOURNMENT
A motion was made by David Evenson to adjourn. Seconded by Curt Kreun. Motion carried unanimously.

Meeting adjourned at approximately 9:07 a.m.

____________________________
Respectfully submitted,
Vione Jordheim
Director of Administrative Services
Alerus Center