Every year the City Council meets with representatives of various non-profits to hear them present their Community Service Organization (CSOs) funding requests. And every year Council asks those presenters questions about their programs and specifically about their budget and the portion of it they are requesting from the City of Valdez. This year before the presentations began on November 2nd Finance Director Brian Carlson took the opportunity to present a nine year study indicating that the monies allocated to CSOs in the City budget have been growing even faster than other portions of the budget and suggested some changes to the process.
So it was no surprise when, after Valdez Convention and Visitor’s Bureau representatives, Board President Patty Relay and Executive Director Laurine Regan presented a request for a great deal more funds than in previous years, Council member Christopher Moulton stated, “We’ve had requests from Council to reduce line items down into the four figure range. So what’s the end game? What’s adequate funding? I mean how long…asking for.. quick math, 176,000 over last year’s budget. We have Brian’s line and we’re asking departments to rein it in and this is an additional amount that is far beyond any other request, beyond even a department.” It was noted during the meeting that VCVB receives all bed tax monies collected by the City and that their CSO had exceeded the bed tax collected at one time. The 2016 City of Valdez Community Service Organization grant amount was 446,245 (a decrease from 2015), which would make the 2017 request approximately 622,245, a 40% increase over 2016.
It was a surprise when Mayor Ruth E Knight pointed out that she was seeing hands up on the floor and called on members of the public who wanted to speak regarding VCVB’s presentation. The first person called on came to the podium in front of Council and Selah Bauer introduced herself stating that she had been an employee of Valdez Convention and Visitors Bureau for four years. She said she had submitted a letter but wished to speak on the record regarding personnel issues, inequality among members and differences in fees charged for the same services by VCVB. The following quotes were excerpted from the recording of the meeting and are part of what Bauer had to say to Council and the public. A link to the recorded meeting is at the end of this story.
‘Some people are getting free web pages. Other people are paying thousands of dollars for web pages .”
“The board doesn’t do anything about it. There have been many formal complaints from employees”
“Although she (Regan)’s good at what she does, I’ll be the first to say that some of the things she does are fantastic, the way that she treats her employees and her members is unequal and frankly unethical”
“We’re asking that you not fund the Visitor’s Bureau in full force until a full investigation is made, not only to Laurine Regan but also into the board of directors, specifically Patty Relay and the Executive Committee of the Board of Directors.”
When contacted Bauer said that she had witnessed what she termed harassment and unequal treatment of other employees and felt that she had been dismissed in retaliation for information solicited from her by the board of directors during the course of Regan’s evaluation and that she had filed a grievance in accordance with VCVB personnel policies. Another former employee corroborated specifics cited by Bauer but declined to respond on the record for this story.
The next speaker introduced herself,
“Felicia Rogers the most recent former employee of VCVB, I agree fully with Selah’s sentiments. I decided to resign from my position just recently a few weeks ago due to some of these things coming to the forefront. Sadly, I think I mentioned to you guys in my message for the record also that I’m on the receiving end of far too many ‘I told you so’s’ form prominent community members who warned me prior to obtaining a position there, in addition to Selah and friends I’ve made since I moved into town.”
“I agree with Selah that there are some things Laurine does well, but as far as membership, some people’s things go into effect the day they sign up others have to wait until the deadline date or the day that things get started.”
“Members have been effectively removed from databases and services stopped being rendered due to personal issues that Laurine has. So I would also urge you not to fund the request until after the investigation.”
And the final speaker from the floor said,
“Scott Malone, Best Western. I’m a big contributor for the bed tax in this town. Before any funding for VCVB I would like to see an audit. I’ve gotten wind of some things that, not just from ex-employees, but things that are now causing my business to hurt because of membership removals. I don’t want to do this all here… Like I said, before any funding I think a complete audit on spending. I don’t think bed tax is being used for the intended use of the bed tax.”
When contacted via email after the meeting, Executive Director Laurine Regan responded,
Thank you for reaching out to me. The VCVB Board of Directors will be issuing a statement on my behalf. Thank you, and have a great day! Regards,
Laurine
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Board President Patty Relay sent this response on behalf of the board. The questions referred to were, ‘would you like to respond to the allegations made after VCVB’s presentation to the City’, ‘is it true that an extensive performance review of Laurine was conducted which included input from both members and staff’ and a request for minutes for any action taken in open meeting as a result of executive session discussion of Regan’s performance review.’
Thank you for allowing the Board of Directors an opportunity to comment on the article you are composing about the VCVB’s CSO budget presentation.
VCVB Response to your questions
On behalf of the VCVB Board of Directors, I offer the following comments to your questions. The VCVB Board of Directors wants to assure the community and its members that we have been diligent in our processes even before Ms. Regan commenced her employment, and have policies in place to resolve grievances legally, as outlined in our personnel and grievance policies. A thorough annual evaluation of the VCVB Executive is completed whereby Board, Staff, Members of the VCVB and the community is surveyed. As this information is considered confidential under State and Federal labor laws, we will not be providing the results. All personnel matters are addressed in Executive Session and as a result we are not required to take minutes for these discussions. The VCVB Board of Directors has every confidence in our Executive Director Ms. Regan as she and her staff work tirelessly to promote Valdez as a year around destination for travel and tourism.
In addition to the personnel policy, we also have a finance policy to ensure internal controls of financial management are met. Each year, an annual financial audit is conducted by the certified public accounting firm BDO. Our Executive Director Laurine Regan has been with the Bureau since the fall of 2014. She took over the Finances in 2015. For your review I am attaching an electronic file of the 2014 and 2015 Financial Audits. You will see that the results of the audits are positive and no mismanagement of funds have been identified in the time frame of Ms. Regan’s tenure overseeing the finances.
In closing, I want to assure you that the VCVB is in good financial health and we stand ready to be part of a vibrant future for Valdez.
Patty Relay
No copies of the personnel or financial policies were provided. A note regarding related party transactions in both 2014 and 2015 audits stated, “VCVB had transactions with the interim director’s business, Stan Stephens Cruises. Both parties acted as the customer and vendor,” and went on to list the amounts paid to and received by Stan Stephens Cruises in the relevant fiscal year. Stephens is listed as the vice-president of the board and the primary contact for VCVB on the Alaska Department of Commerce web site (search here for 29005D), but VCVB board stated that although this too would be a related party transaction, Stephens was only the Interim Director for part of 2012, not in 2014 and 2015 and had left the board in 2015.
Financial Information
The information below is based on the audited financial statements for 2014 and 2015 .
The chart below illustrates the portion of VCVB budget paid by City of Valdez funds in 2014 and 2015. The left hand side of each multi-colored pie chart is income from all sources. The right hand side is total expenses. The ‘other’ revenue section is made up of Advertising proceeds, Membership Dues, Economic Development and ‘Other’ income. The Internal Revenue Service code that applies to VCVB, which is a 501(c)6 non-profit, states that:
- An IRC 501(c)(6) organization is a membership organization characteristically supported by dues. While such an organization may receive a substantial portion or even the primary part of its income from non-member sources, membership support, both in the form of dues and involvement in the organization’s activities, must be at a meaningful level.
It is not clear whether City funds derived from bed taxes paid by members would constitute a meaningful level of support, but the support can be participatory or in kind rather than monetary. VCVB financial reports do not indicate any accounting for donations in kind.
| Balance Sheet | 2014 | 2015 |
| Cash and Cash Equivalents | 37,322 | 56,312 |
| Accounts Receivable | 1,996 | 6,217 |
| Prepaid Expenses | 33,913 | 30,796 |
| Deposits | 2750 | 0 |
| Total Current Assets | 75,981 | 93,325 |
| Property and Equipment, net | 10,197 | 8,217 |
| Total Assets | 86,178 | 101,542 |
When asked about the relatively low amount listed in fixed assets, VCVB board of directors responded that all their office furniture was either old (and presumably fully depreciated) or under the $600.00 value threshold for fixed assets. The large earthquake sculpture in the public area of the building is the property of the City of Valdez and is on long-term loan from Valdez Museum and Historical Archives.
