Commissioners question TDC spending

With an additional $1.1 million from British Petroleum to juice up its annual $600,000 budget, the Gulf County Tourism Development Council has gone on a spending spree this year, without acquiring any approval from the Board of County Commissioners on its lengthy list of expenditures, county commissioners said during two recent public meetings.

Because the TDC operates as a county department, county policy requires approval from the commission for any expenditure of $5,000 or more. Policy also requires county agencies to collect verbal bids for services ranging from $5,000 to $10,000 and to legally advertise services with a price tag of $10,000 or more.

While the TDC budget nearly tripled this year, the TDC and BOCC have until recently disregarded these policies, allowing TDC executive director Tim Kerigan to call all the shots in spending the council's nearly $2 million budget, commissioners noted.

"We went from having a roughly $250,000 marketing and events budget to having four times that much," Kerigan said. "It's a lot of money. We've tried to do our best with it, and the numbers show we've done well marketing our county."

County commissioner Bill Williams brought the issue to the commissioners' attention at the Oct. 11 and Oct. 25 commission meetings, presenting several invoices for extraneous expenditures supporting events such as the PoJo Live Music Festival and funding NASCAR sponsorships without the board's approval.

Williams motioned for an immediate external audit of TDC expenditures, as long as the audit costs less than $5,000, in order to track the operational and financial sectors of the agency.

Williams also recommended Kerigan work with Dawn Moliterno, executive director of the Walton County TDC and chairperson of the Northwest Florida Tourism Council, for assistance with spending strategies for the remainder of the BP funds.

"We have a division of this county that has spun and continues to spin out of control," Williams said on Oct. 25. "To me this is an immediate emergency that needs to be addressed. Accountability and internal control is not there."

Until the audit is complete, Williams asked Commissioner Warren Yeager, a member of the TDC board, to oversee the TDC expenditures.

"This audit will help clarify some issues," Yeager said at a special meeting Oct. 31. "Let's have this discussion at our regular board meeting next time to make sure everything is in order."

At the Oct. 31 special meeting the board called for any BP-related expenditure to go before the board for approval in the consent agenda.

BP money distribution

This year, BP distributed a total of $30 million to tourism development councils in a "seven county coalition" in Northwest Florida that includes Gulf, Escambia, Santa Rosa, Okaloosa, Walton, Bay and Franklin, to be used solely to promote tourism to offset losses last summer after the explosion of the Deepwater Horizon Oil Rig in the Gulf of Mexico.

The agreements made with BP give area TDCs full discretion to determine proper use of payment and only requires organizations keep a "reasonably detailed" record of how the payments were used and submit quarterly reports.  

Gulf County received $1,161,534 from BP for the tourism program in 2011, in three allocations: $387,178 on April 23, June 11 and Sept. 11. Of the money allotted, the TDC spent $639,077 as of Oct. 17, not including outstanding invoices.

In Florida's Coastal Northwest Communication Council's executive summary of the 2011 funds, each county's allotment was broken down into a spending plan. Gulf County's plan allotted $585,000 for advertising, $90,000 for public relations support and media tours, $335,000 for area event support and $150,000 for high impact events.

The Gulf County TDC held one "high impact" event, September's PoJo Live Music Festival, which accounted for $174,104 in BP funds as of Oct. 17, according to the 2011 invoice list.

Of the money spent on the two-day festival, about $80,000 was spent on band contracts ($36,000 of that for headliners ALO), another $20,000 for band accommodations and hospitality, $6,000 for the PoJo shuttle bus, about $9,000 for promotional ads, posters and banners, $9,500 for T-shirts and coozies, and $3,079 for imprinted PoJo grocery totes.  

The PoJo Live Music Festival alone exceeded the proposed $150,000 budget for high-impact events, with $174,108 of invoices from the high impact event account and more money drawn from the area event support account.  

Williams and Commissioner Ward McDaniel questioned extraneous expenditures for tent rentals and the $6,000 PoJo taxi service, an expenditure Williams described as "absurd."

McDaniel asked why no bids were collected for tent rentals, and why the TDC chose to rent with an out-of-town party rental service, with so many local families struggling.

Quantifying impact

The only sales documents from the PoJo Live Music Festival cite $485 made from T-shirt sales and $7,434 from the sale of tickets, which were required to purchase alcohol at the event.

Because the concert was free, Kerigan was unable to provide a record of the number of attendees for this "high impact event," focused on attracting out-of-county visitors.   

Bed tax collections have been consistently higher in 2011, with record numbers in July and the numbers for August almost back to where they were in 2009.

The bed tax collections for September have been steadily rising since 2008. The September 2011 bed tax was $74,190, up from $49,091 in 2010 and $36,028 in 2009. Overall, the gross revenue from this fiscal year totaled $847,657, topping last year's $740,845 and $790,526 from the year before.  

Kerigan estimated roughly $1.3 million brought into Gulf County in September.

"September is usually one of our slowest months," Kerigan said. "We've had some great increases, but at the same time we need to fine-tune our policies."

During the weekend of Sept. 16 and 17 when the PoJo Festival was held in St. Joe Beach, most area hotels and motels reported average occupancy.

The El Governor Motel in Mexico Beach didn't fill up that weekend, with 45 of the 125 rooms vacant.

The Mainstay Suites and Port Inn reported occupancy levels more typical of July, at 90 and 95 percent.  

The Gulf View Motel was full Thursday through Sunday that week, but owner Jan Smith said the motel usually stays full, with documented full occupancy last year for 96 weeks straight.

Owner and manager of the Dixie Bell Motel Dan McDonough reported full occupancy, but he said the 10-unit motel is usually fully booked on weekends. McDonough said events like PoJo help more than they hurt. 

 The Driftwood Inn in Mexico Beach had all of its 20 beachside units and four houses full for the weekend, but manager Shawna Wood chalked it up to normal traffic.

"In the past, you'd have to book three months in advance, but this year you could still call two to three weeks ahead and get something," Wood said. "This year was amazingly better (than last year), but we still weren't back 100 percent."

Questions about spending/contracts

From January to October 2011 the TDC spent $210,989 from the area event support account.

The highest allotments were $25,000 for the Gulf County Sheriff's Office Bass Tournament, $25,000 for the Fourth of July fireworks, $25,000 for a Visitgulf.com NASCAR sponsorship at the Oct. 22 at the Talladega Super Speedway (Truck No. 82 driven by Grant Enfinger), $20,000 for July's Florida Scallop and Music Festival and $15,632 to print Gulf County visitor guides.

Funds from the account also helped to fund other area events and Visit Gulf County promotions.

In total, $251,989 has been spent on advertising and public relations support, with $224,489.42 worth of invoices made out to Kerigan Marketing.

Kerigan Marketing, owned by Jack Kerigan, brother of TDC executive director Tim Kerigan, has been providing marketing services for the TDC without a contract since its previous contract expired in March 2010, another issue Williams presented at the BOCC meeting.  

The county issued an award letter to Kerigan Marketing in the spring of 2010, but no formal contract was signed.

County attorney Jeremy Novak addressed the TDC's need for a formal contract with Kerigan Marketing at the Oct. 6 TDC board meeting.  

"The TDC had no formal structure in the past," Novak said. "The county issued an award letter in the spring of 2010, and Jack (Kerigan) has been operating under that."

Novak said the county needs to sign a contract with a termination date as soon as possible, and presented a revised version of the TDC's original contract with Kerigan Marketing for the BOCC to look over at the meeting Oct. 25.

"My problem with it is two-fold," said Williams, who also expressed disapproval for the "conflict of interest" arising from Tim Kerigan contracting his brother's company as the TDC's sole marketing services provider.  

Williams cited Florida Statute 112.3143, which lays out voting conflicts for public officials in regards to relatives. The statute states: "'Relative' means any father, mother, son, daughter, husband, wife, brother, sister, father-in-law, mother-in-law, son-in-law, or daughter-in-law."

Jack Kerigan addressed the board, citing higher bed taxes in Gulf County for 2011 and growing Web site traffic for VisitGulf.com.

"Every media pitch we put out has a plan," Kerigan said. "Our team is completely transparent in everything that we do."

Williams said it is impossible to be transparent without a contract.

Jack Kerigan offered no explanation as to why no contract was signed after the award letter was issued.

Tim Kerigan said it is unfair to compare the Gulf County TDC to the Walton County TDC because Walton County is a larger operation, receiving more than $8 million from BP in 2011 and with a much larger staff to handle the funds.

"Obviously there are things we need to address," Kerigan said. "We certainly are doing what we can with the staff we have."

Kerigan said he has not tried to do anything unethical, and that the TDC has held to its allocations with the BP funds, with a spending plan similar to Santa Rosa County. Kerigan said where the TDC has failed is by not requesting BOCC approval for expenditures totaling more than $5,000.

"If we're looking at policies and procedures, we can handle that," Kerigan said. "But when are we going to have this amount of money to spend again?"

Williams responded by demanding Kerigan put the house back in order.

"Follow statute, follow suit, do your job and we're fine," Williams said.

Breakdown of BP funds spent in 2011

Total to Gulf County TDC in 2011- $1,161,534

Total Spent as of Oct. 17- $639,077.40

High Impact Events- PoJo Live Music Festival- $174,104.08

           Hardware/Setup- $39,974.57

           Band Contracts – $81,350

                           ALO- $36,000

                           Bob Schneider- $10,000

                           Matt Costa- $8,500

                           The Sheepdogs- $7,500

                           Honey Island Swamp Band- $4,500

                           Michael Tolcher- $4,500

                           Spiritual Rez- $3,000

                           Thomas Wynn & The Believers- $2,750

                           Mishka (deposit only)- $2,000

                           Bo Spring Band- $1,200

                           Sara Mac Band- $500

                           The Curry Brothers- $500

                           Buddy Hamm- $250

                           Greg Wood- $150

           Band Accommodations/hospitality- $20,917.82

           PoJo Merchandise/Promotions- $15,039.43

           Personnel Services- $12,679

                           Security- $1,225

                           Two-day shuttle service- $6,000

                           Event Assistance/ Bartenders- $2,554

                           Camera crews- $2,900

           Alcohol- $4,143.26

*PoJo cost from area event support account- $4,784.27

*Money collected from T-shirt/alcohol sales- $7,919

Advertising and Public Relations Support- $251,989

           Paid to Kerigan Marketing- $224,489.42

Television- $106,885.25

                           Print- $44,200.27

                           Interactive- $51,487.75

                           Outdoor- $19,276.15

                           Public Relations Support- $2,640

Other- $30,140.63

                           Television- $30,000

                           Print- $140.63

Area Event Support- $210,343.27

           Top 10 account expenditures (single invoices)

           1) Gulf County Sherriff's Second Annual Bass Tournament- $25,000

           2) Fourth of July Fireworks- $25,000

           3) NASCAR Sponsorship at Talladega Camping World Truck Series Race- $25,000

           4) Florida Scallop and Music Festival- $20,000

5) Gulf County Visitor Guides- $15,632                           

           6) Blast on the Bay Songwriters' Festival- $15,000

           7) Gator Classic Catfish Tournament- $15,000

           8) Gulf Alliance for Local Arts First Fridays- $10,800

           9) Scallop Drop Treasure Hunt (not including event consultation)- $6,551

           10) GALA Summer Arts Program- $5,000

                  Gaskin Park Flathead Catfish Tournament- $5,000

                  Bluewater Outrigger Area Event Support- $5,000

                  Salt Air Farmer's Market- $5,000