The URL can be used to link to this page

Home My WebLink About13 - Newport Beach & Company, Visit Newport Beach and the Tourism BID Annual Reporting - CorrespondenceReceived After Agenda Printed July 23, 2019 Item No. 13 From: Laura Curran To: Dent - City Council; Brown. Leilani Cc: Franceschini, Melanie: Leung, Grace Subject: For City Council Meeting - Agenda Item Visit Newport Beach Date: Monday, July 22, 2019 8:07:57 PM Attachments: Attachment a -VNB FY 2019-20 Budaet Uodate.ndf PastedGraohic-4.nna PastedGraohic-3.ono PastedGraohic-S.ona Leilani Brown: For inclusion in Council Packet To Council Members: On Tuesday night, the Council will consider the Budget and activities of Visit Newport Beach and Newport Beach and Co. I have noted the lack of specificity or Council scrutiny on Visit Newport Beach's budgets in prior Years. Some progress has been made. Compared to prior years, the Budget report does a better job of identifying expenses in individual categories, at a superficial level. A reader can better understand how the spend is projected across each budget category. However, to understand this budget, the general ledger data is necessary. The Arts Commission includes this information in its Budget Report and it is helpful. More important, several items merit close scrutiny, and approval of funding for VNB should be withheld until more explanation and clarity are provided. See the next 3 examples. 1. Newport Beach & Co Fees: The VNB Leisure Marketing TOT report references $2.5M in budget for `NB&Co Fees without further explanation. This significant expense, over 50% of VNB's budget, needs to be further detailed. viii rgyy ort Visit Newport Beach, Inc. Leisure Marketing (TOT) k_C' A t. 1-1 FY2020 Budget II Total Expenses 5,017,493 Net Income O ta"Xt Variance 4,000 FY2019 1,000 BUDGET 67408 - International Transportation Costs 0 67409 - International Other Travel Costs 500 67410 - International Business Meals/Entertainment 21000 67412 - International Brand Events 0 67413 - International Sales Missions 0 Total International Ma rketing I initiatives 745,000 NB&Company Fees 171,301 68001 - N B&Co Fees 2,329, 546 Total NB&Company Fees 2,329,546 Total Expenses 5,017,493 Net Income O ta"Xt Variance 4,000 (1,000) 1,000 500 2,000 0 193,000 193,000 12,000 12,000 557,000 (188,o0o) 2,500,847 171,301 2,500,847 171,301 5,479,965 462,472 2. Travel expense: VNB TOT also shows $0 for Travel expenses. For example, VNB's budget includes participation in marketing activities and travel to local area meetin s and conferences to meet potential clients. Where are these travel expenses tracked? Total Professional Fees 17,800 21,400 3,600 Travel Expenses 65400 - Transportation Costs 0 65405 - Mileage (50.535/mile 2017) 0 Total Travel Expenses 0 Total General and Administrative 95,652 133,314 37,662 l3-25 3. Over $500K is budgeted for International Events, including $193,000 for International Brand Events, and $212,000 in 67401 - International Brand Awareness Fees. These are large sums which should be better explained. International Marketing Initiatives 67401 - International Brand Awareness Fees 145,000 212,000 67.000 67402 • International TTI FAM Tours 27,000 24000 0 67403 - International Promotions 225,000 30,000 (195,000) 67404 - International Trade Shows 325,000 45,000 (280.000) 67405 -International Airfare 10,500 70,000 9,500 67406 - International Accommodations 8,000 14000 4,000 67407 - International Meals 2.000 4,000 2.000 13-26 r�:rt eyy p� t Visit Newport Beach, Inc. Leisure Marketing (TOT) A C H FY2020 Budget FY2019 BUDGET Variance 67408 • International Transportation Costs S.00D 4,000 (L'000) 67409 - International Other Travel Costs 500 I1000 500 67410 • International Business Meals/Entertainment 2,000 21000 0 67412 • International Brand Events 0 193,000 193,000 67413 • International Sales Missions 0 12,000 12.000 Tota IInternatlunaIMarkedngInitiatIves 745,000 557,000 (188,000) Thank you for applying close scrutiny to VNB's budget. It has been lacking over the years and it is time for this to change Thank you Laura Curran Newport Beach, CA ATTACHMENT B 1511 4WA ort Visit Newport Beach, Inc. Leisure Marketing (TOT) C H FY2020 Budget FY2019 13-25 BUDGET Variance Operating Revenue Revenue 41000 - TOT/TBID Income 5,014,493 5,476,965 462,472 44000 - Event Hosting Income 3,000 3,000 0 Total Revenue 5,017,493 5,479,965 462,472 Interest Income 0 - - Total Operating Revenue 5,017,493 5,479,965 462,472 Expenses Salary and Wages 61010 - Salaries and Wages 77,480 80,730 3,250 61030 - Payroll Tax Expenses 6,113 6,370 257 Total Salary and Wages 83,593 87,100 3,507 Benefits 61140 - Retirement Plan (401k) 5,424 6,458 1,034 61150 - Flexible Spending Plan 0 0 0 Total Benefits 5,424 6,458 1,034 General and Administrative Expenses Operating Expenses Operating Expenses 64100 - Office Supplies 0 300 300 64101 - Stationary 0 2,025 2,025 64115 - Office Equipment (non-deprec) 0 2000 2000 64120 - Equipment Repairs & Maintenance 0 500 500 64125 - Computer Software (non-deprec) 5,913 9,400 3,487 64130 - Voice and Data - Office 1,140 1,220 80 64145 - Shipping Charges 0 450 450 64150 - Bank Fees 540 600 60 64160 - Membership Dues 62,150 66,600 4,450 64170 - Team Meetings 0 4,369 4,369 64175 - Governance Meeting Expenses 0 6,750 6,750 64190 - Business Licensing and Fees 0 0 0 64300 - Depreciation Expense 209 7,500 7,291 64600 - Business Meals/Entertainment 0 0 0 64610 - Client Gifts 0 1,500 1,500 Total Operating Expenses 69,952 103,214 33,262 Insurance 63100 - General Liability Insurance 0 1,200 1,200 63300 - Board of Directors Insurance 7,900 7,500 (400) Total Insurance 7,900 8,700 800 Professional Fees 64205 - Payroll Processing Service 0 2,600 2,600 64207 - Bloggers 7,800 7,800 0 64201 -Audit Fees 7,500 8,500 1,000 64202 - Tax Preparation Fees 2,500 2,500 0 Total Professional Fees 17,800 21,400 3,600 Travel Expenses 65400 - Transportation Costs 0 - - 65405 - Mileage ($0.535/mile 2017) 0 - Total Travel Expenses 0 - - Total General and Administrative 95,652 133,314 37,662 13-25 51 4WA ort CH Visit Newport Beach, Inc. Leisure Marketing (TOT) FY2020 Budget Advertising Expenses 66101 - Advertising - Purchased 66102 - Advertising - Local Events 66103 - Advertising Promotions - Media 66104 Advertising Tracking Media 66202 - Ad Production 66203 - Creative Design/Development 66205 - Photography/Video Production Total Advertising Expenses Marketing Expenses Community Relations 67103 - Community Partner Events 66212 - Community Sponsorships 67101 - Research 67102 - Christmas Boat Parade 67105 - Awards 67107 - Promotional Items 67108 - Company -Sponsored Events 67109 - Hospitality Training Total Community Relations Marketing Collateral 67301 - Inspiration Guide 67302 - Maps 67303 - Special Interest Collateral 67311 - Collateral Production Expenses 67312 - Collateral Distribution Total Marketing Collateral Digital Marketing 67502 - Website Maintenance 67503 - Online Search Advertising 67504 - Digital Advertising 67505 - Online Contests/Promotions 67506 - Mobile Application 67508 - Website Redesign Expenses 67511 - Digital Lifestyle Channel Production 66211 - CRM Maintenance Total Digital Marketing Communications/Public Relations 67601 - Media Services 67602 - Media FAM Tours 67605 - Media Special Programs 67607 - Media Relations 67608 - Digital Assets/Media Library Total Communications/Public Relations Total Marketing Expenses International Marketing Initiatives 67401 - International Brand Awareness Fees 67402 - International TTI FAM Tours 67403 - International Promotions 67404 - International Trade Shows 67405 - International Airfare 67406 - International Accommodations 67407 - International Meals FY2019 BUDGET 600,000 40,000 0 0 50,000 100,000 20,000 810,000 5,000 35,000 125,000 95,000 0 0 0 991 260,991 10,000 0 10,000 0 42,000 62,000 125,000 80,000 30,000 0 50,000 15,000 50,000 8,000 358.000 30,000 97,687 100,000 30,000 9,600 267,287 948,278 145,000 22,000 225,000 325,000 10,500 8,000 2,000 768,000 45,000 0 66,000 50,000 100,000 20,000 1,049,000 7,500 168,500 60,000 110,000 300 4,000 500 200 351,000 5,000 0 0 0 36,000 41,000 118,646 110,000 13,000 0 109,000 0 100,000 9,000 459,646 30,000 70,000 155,000 30,000 9,600 294,600 1,146,246 212,000 22,000 30,000 45,000 20,000 12,000 4,000 Variance 168,000 5,000 0 66,000 0 0 0 Lsy,000 2,500 133,500 (65,000) 15,000 300 4,000 500 (791) 90,009 (5,000) 0 (10,000) 0 (6,000) (21,000) (6,354) 30,000 (17,000) 0 59,000 (15,000) 50,000 1,000 101,646 0 (27,687) 55,000 0 0 27,313 197,968 67,000 0 (195,000) (280,000) 9,500 4,000 2,000 13-26 VISIT eW UY'i 4:;6; EACH Visit Newport Beach, Inc. Leisure Marketing (TOT) FY2020 Budget FY2019 BUDGET BUDGET 67408 - International Transportation Costs 67409 - International Other Travel Costs 67410 - International Business Meals/ Entertainment 67412 - International Brand Events 67413 - International Sales Missions Total International Marketing Initiatives NB&Company Fees 68001 - NB&Co Fees Total NB&Company Fees Total Expenses Net Income 5,000 4,000 500 1,000 2,000 2,000 0 193,000 0 12,000 745,000 557,000 2,329,546 2,329,546 5,017,493 0 2,500,847 2,500,847 5,479,965 0 (1,000) 500 0 193,000 12,000 (188,000) 462,472 0 13-27