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HomeMy WebLinkAboutMINUTES - 08102004 - SD5 TO: BOARD OF SUPERVISORS f Contra FROM: Mark DeSaulnier f % , Costa DATE: August 10,2004 bounty SUBJECT: Report on the Dissolution of the Contra Costa vo.s` County Convention and Visitors Bureau and Possible Action SPECIFIC REQUEST(S)OR RECOMMENDATIONS)&BACKGROUND AND JUSTIFICATION RECOMMENDATION That the County Administrator provide a report to the Board regarding the dissolution of the Visitors Bureau, including the status of funds contributed by Contra Costa County. That the County Counsel advise the Board regarding the terms of the contract that exists between the County and the Convention and Visitors Bureau and a determination of whatever action may be necessary to protect the County's legal and financial interests. BACKGROUND: The County has supported.the Convention and Visitors Bureau with significant funding under an existing contract.Now that the Bureau is in the process of shutting down all activities, it is necessary for a full accounting and the return of any available funds. CONTINUED ON ATTACHMENT: ,�y SIGNATURE: 1V1,f kea1 RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER I U E : ACTION OF BOARD ON r "' ".s APPROVED AS RECOMMENDED OTHER APPt#.ND the recam dations; report shall be submitted within 30 days. VOTE OF SUPERVISORS t�} I HERESY CERTIFY THAT THIS IS A TRUE -_UNANIMOUS(ABSENT i"d�44tl- ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: _ _ AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED JOHN SWEET CLERK OF THE BOARD F SUPERVISO AND COUNTY ADMINISTRATOR Contact: cc: BY ,. art— ,DEPUTY cc:CAO e County Counsel District Attorney S D.5 Supplemental Information County cif Contra Costa OFFICE OF THE COUNTY ADMI'NISTRATOR. MEMORANDUM DATE: August 6, 2004 TO: Board of Supervisors FROM: Cott Tandy, Chief Assistant County Administrator SUBJECT: Contra Costa Convention and Visitors' Bureau -- Correspondence and Audit Enclosed are copies of recent correspondence related to the dissolution and financing of the Contra Costa Convention and Visitors' Bureau to provide supplemental information in connection to Item SD.5 on the August 10, 2064 agenda. This information was not available at the time the agenda packet was prepared. STlamb Encls. `C{)ltnty Administrator1 #trG� k Board of Supervisom Jn County Administration Building j"'+osta 1°1Dist ictS 651 Pine Street,11th Haar „„/rr Martinez,California 94553-1229 Gayler#3.tliikerna 2 ?l (926)335-1080 County Greenbergberg(925)335-1098 FAX 31d Will* John Sweeten _ Mark DeSsuinier County Administrator -' 410 District Federal D.Glover 51"district August 4, 2004 Mr. Alex Ozuna Chair of the Board Centra Costa Convention and Visitor's Bureau 1333 Willow Pass Road Concord,CA 94520 Dear Mr. Ozuna. It has come to my attention that at a special meeting of the Beard of Directors of the Contra. Costa Visitor's Bureau(the Bureau)on July 29,2004,the Board discussed dissolution of the Bureau and potential severance packages for two key employees. Neither of these items were on the statement of business for the meeting,which stated that the purpose ofthe meeting was for the Board to hear the results of an audit by the City of Concord. The city audit report was released to only two members of the Board and not disseminated to the other members or to the County. I am informed that at the July 29, 2004 special meeting it was also decided that the Bureau would lure an attorney to help it wrap up its affairs. While I appreciate that it may be appropriate to wrap up the operations of the Bureau, I caution that such an action should be done with deliberate speed and due consideration of the required formalities, the needs of potential creditors, and Article 13 of the Bureau's bylaws. Otherwise,uninformed actions may to lead to mistakes that could be costly in terms of both time and money. Some of the actions that the Board may have taken recently appear to be hasty and improper. For example, a decision to wrap up operations of the Bureau cannot have been validly made at the July 29, 2004 special meeting. Pursuant to the Bureau's bylaws, which incorporate Sturgis' Parliamentary Procedure by reference, special meetings must be noticed with a statement of business to be considered. This must be specific,and if action is to be taken at the meeting,this fact must be stated in the notice. This was not done for the July 29, 2004 special meeting. The Corporations Code also has specific procedures .for winding up the affairs of a Nonprofit Mutual Benefit Corporation which must be followed. See, e.g., Corp Code §8610(x). Mr. Alex ©tuna August 4, 2004 Page 2 It is not clear what, if any, action was taken with regard to the severance packages at the special meeting. As the County has contributed significant funding to the Bureau over the years,we have an interest in the administration of the Bureau's remaining funds. It would behoove all members of the Board of Directors to adhere to the required standard of care pursuant to Corp Code §7231 in discharging their duties under the current circumstances. There are many requirements in wrapping up the activities of a Nonprofit Mutual Benefit Corporation. I suggest that it is in everyone's interest to proceed at an intelligent,measured pace and to ensure that the proper formalities are followed. To this end, the previous invalid resolutions, if any have been adopted, should be reconsidered and readopted, if at all, in an appropriate manner. Finally, this letter is a reminder that under the terms of our contract with the Bureau, the Bureau is to provide the County with an accounting of the Bureau's activities for fiscal year 2003- 2004 by August 15, 2004. I trust the report will address the findings of the audit. )cerely, N SAN cc: Members of the Board of Supervisors County Counsel Lara Delaney,Management Analyst Ed James, Concord City Manager CADoeumcnts and SeWngstbeanU=ai Settings\Temp\C.Lotus.Notes.Data\ozena letter.wpd 1333 Willow Pass Road Suite 204 Concord,California 94520 925.685.1184 FAX 925.685.8190 info@cccvb.com August 5, 2004 Lala Delaney, Management Analyst Contra Costa County 651 Pine Street 10"Floor Martinez, CA 94553 RE: Dissolution of the Centra Costa Convention&Visitors Bureau Dear Ms. Delaney; Thank you for your letter asking for clarification of some issues. As I had mentioned before, I had tried to send you emails but they were being resumed as not valid address. We now have the correct one and we should have no problems getting information to you. Let me comment on some of your concerns. You heard about the closure at the same time that the other Board Members did. Ron Howard met with the Ed James the City Manager on Wednesday afternoon. I was out of town and did not hear about it until 7:00 PM that evening. We met with Hazel Sturm and Rita Corbinook on Thursday morning before the Board Meeting. At that time we were already aware of the additional reduction of$100,000 the County was recommending. Based on those cuts,we knew we could not continue to operate as a business. We told Hazel and Rita that they would be out of job and that a severance package would be proposed to the Board. If you will recall,there were two motions made. One was to authorize a$7,500 retainer for an attorney to assist us in the dissolution of the business. That motion was made and seconded and you along with the other Board Members voted to approve the motion. The other motion was to offer a severance package to Hazel and Rita for two weeks pay for every year of service plus six months of continuous medical insurance. Ron Howard and I had already assured ourselves there were enough funds to offer a severance package. You along with the ether Board Members voted to approve this motion. At no time did we put a provision in the motions to bring these back to the Board for final action. There is nothing in the Bylaws that say money can not be released with respect to a proposed severance package until the Board is given full consideration of the dissolution costs. The distribution of the excess funds is after all the assets have been liquidated and all bills have been paid. There will be an audit and we will take the average of the last three years contribution to determine what percent goes to each entity. Severance packages are normal occurrences. They happen at the County level and are very common in the business environment. When employees are laid off without any warning, like Hazel and Rita were, it is only proper to reward them after a combined service of 43 years. I am accepting your resignation as Secretary/Treasurer. The nominating committee should have noticed that you could not be on the Executive Committee. Sincerely, Alex Ozena Chairman of the Board ,The he Board', of Supervisors Contra Jahn Sweeten ^ Clerk of the Board ��unty Administration Building {� �� 651 Pine Street,Room vs i,�,,i and Martinez,California 94553-1299 County Administrator County John Clate,txt District (825)935-t9{0 Gayle S.Ulikema,2nd District Millie Greenberg,3rd District Mark DeSaulnler,4th District Federal D.Glover,5th District August 2, 2004 Mr. Alex Ozuna Chair of the Board Centra Costa Convention &Visitors Bureau 1333 Willow Vass Read Concord, CA 94520 RE: DISSOLUTION OF THE CONTRA COSTA CONVENTION & VISITORS BUREAU Dear Chairperson Ozuna: As you knew, prior to the July 29, 2004 Special Board of Directors)meeting of the Contra. Costa Convention and Visitor's Bureau, I had not been provided with information concerning the Bureau audit, aside from the initial notification which was forwarded to me by my colleague, Laura Strobel. You said that this was because you did not have my correct e-mail address: Idela@cao.cccounty.us. As a voting Board member representing Contra Costa County, it is critical that I am fully informed of all issues that come before the Board. If, for some reason, you cannot reach me by e-mail, my telephone number and mailing address are. 925-335-1497 Contra Costa County Administrator's Office 651 Pine Street 10'h floor, Martinez, CA 94553 At any rate,because I was not informed of the closure action to be taken before the meeting, I now need some clarification of the matters discussed and decided at that meeting. It is my understanding that as Chair of the Board, you were authorized to expend up to $7,544 as a retainer for legal counsel to be hired for the purposes of guiding the Bureau through the dissolution process. It is also my understanding that direction was provided to you to begin negotiating a severance package for the two employees, Hazel Sturm and Rita Corbinook,potentially Lased on two weeps of pay for each year of service and 812104--CCCVB Dissolution continuation of health benefits for a period of six months. It is my understanding that no final decision was made on the issue of the amount of the package, as it would be impossible to do so until wind-up costs are determined. It is my understanding that you, as Chair of the Board, will bring any final action with regard to this matter or others pertaining to dissolution back to the Board of Directors,with an appropriate Board resolution at a subsequent meeting. If any of this does not reflect your understanding, please let me know immediately. In addition, l would like to draw your attention to the dissolution process stated in Article 13, Section 13.1. of the Bylaws. In the event of dissolution, the assets shall be disposed of by a distribution to the governmental entities that contributed to the Bureau based on an average of the last three years of contributions received immediately preceding the dissolution. The calculation of contributions shall be based on an audited statement paid by the Bureau. Accordingly, no money can be released with respect to a proposed severance package until the Board of Directors is given full consideration of the wind- up/dissolution costs and an accounting of the Bureau's assets is provided. Finally, as Hazel and I previously discussed, my appointment as Secretary/Treasurer at the end of June was made in error as it is not in accordance with the Bylaws. (Article 4, Section 4.1.1 Voting Members.) Hazel advised me that someone else would be appointed to that position. Pending that appointment, I formally resign from the position, effective immediately, though I will continue to serve as a Board member for as long as the Board may function. In order to evaluate issues that I anticipate will be discussed in upcoming Board meetings, I will need and request the following documents and information immediately: (1) a copy of the draft audit commissioned by the City of Concord which, I understand, is in your possession; and(2) minutes, a resolution, or other documentation of the actions taken at the July 29, 2004 meeting. Thank you in advance for complying with my request. If there is any problem,please call me immediately. Sincerely, Lara DeLaney Management Analyst Cc: Sohn Sweeten,County Administrator Scott Tandy, Assistant County Administrator Ed James,Manager, City of Concord Board of Directors, Contra Costa Convention&Visitors Bureau 2 1333 Willow Vass Road u Suite 204 Concord,California 94520 925.1585.1184 FAX 925.685.8190 info@cccvb.com To: Members of the Board of Directors From: Hazel Sturm, President& CFO Date: August 4, 2004 12E: Special Meeting of the Board of Directors Monday August 16, 2004 Hilton Concord Chairman of the Board, Alex Ozuna has called for a Special Board of Directors Meeting of the Contra Costa Convention & `visitors Bureau. for 4:00pm Monday, August 16, 2044 at the Hilton Concord. Agenda items for determination are as fellows: I) Appointment of a new Secretary/Treasurer 2) Delegation of authority 3) Update on closure I 1333 Willow Pass Road Suite 204 CONTRA COSTA COUNTY Concord,CaliforniaRECEIVED 945213 925.585.1184 .8194 .r~ FAX 925,685,8190 info@cccvb.com OF t August 2, 2004 Mr. John Sweeten County Administrator 651 Pine'Street, 11 tl3 Floor Martinez,CA 94553-4068 Re: Phase ii Reductions For FY 04-05 Budget Dear Mr. Sweeten: Thank you for your recent letter. We do understand that the County is being impacted,by the allocation reductions from the State. Needless to say, we are disappointed that you are recommending to the County to reduce our fundingby an additional $100,000. This recommended reduction makes it impossible for the Bureau to continue effectively representing the Concord Sheraton and the Embassy Suites. Regardless of the outcome we must inform you that we do not wish to renew the contract with the County. T`hank you for your support over the years. Sincerely, Alex Ozuna azel s Chairman o e Board President/CEO County Ad'>r»Wstrator Contra Costa Board of Supervisors County JOHN GIO$A County Administration wilding to District 651 Pine Street, 11" Floor Martinez, California 94553-4066 G�Yt€B.Utt�t€ntx 2"d District V-925-335-10811 F-925-335-1098 MILtt€GREENURG 31d District John Sweeten r' MAS L€SAutNt€ County Administrator 41h District Ffo€m D.Gtov€k 5"District July 20,2004 Hazel Sturm President and Chief Executive Officer Contra Costa.Convention &Visitors Bureau 1333 Willow Pass Road, Suite 204 Concord, CA 94520 Re: Phase II Reductions for FY 04-05 Budget Bear Ms. Sturm: As you are aware, the anticipated impacts of the State budget unfortunately require additional reductions to the County's budget. These reductions were not incorporated into the FY 2004-05 Recommended Budget. However, as State budget negotiations draw closer to conclusion,the inevitability of our general find impacts must be addressed. Given the difficulty of Phase I reductions, I can appreciate how difficult Phase II reductions will be. However,I have attempted to allocate the reductions to County departments in a manner that minimizes impacts to County operating budgets as much as possible and focuses on discretionary programs. In reviewing the budget for the Convention and Visitor's Bureau, the recommended FY 2004-05 net County cost after Phase I was $205,397. This amount of general fund support is a decrease from the Bureau's FY 2003-04 budget of$22,822,or 10%. I plan to recommend to the Board of Supervisors that the net County cost contribution be reduced by an additional $100,000,to $105,397,which will result in a decrease of 53.8%over your FY 2003-04 budget. I regret that the County's financial situation requires me to recommend these fuer reductions to the Bureau's budget. Sincerely, *ounty ETE14 Adrni istrator _. __ - .......................................................... ............ . Auig. 6 2004 2:33Ni 10. 2313 ?. 2/4 ................ ////////, MULLIN lAw FIS. August 6,2004 John W. Sweeten County Administrator County of Contra Costa 651 Pine Street, 1 l''Floor Martinez, CA 94553 Re: Contra Costa Convention and Visitors Bureau Dear Mr. Sweeton: I,represent the Contra. Costa.Visitors and Convention Bureau("CCCVB") and have been asked by the Chair of the Board,Mr. Alex Ozuna,to respond to your letter dated August 4, 2004. I need to correct a misapprehension on your part that the meeting of the Board of Directors of the CCCVB on July 29, 2004 was a"special meeting." It was a special meeting because of the gravity of matters to be discussed,however,it was the regular meeting of the Board. The Board has been meeting on the last Thursday of every ether month. That is the normal meeting date for the Beard. At the Board meeting on July 29, 2044, your representative, Lara Del aney, was in attendance., Prior to that meeting, Chair Ozuna distributed by e-mail a condensed version of the Executive Summary of Issues and Findings of the Audit Report commissioned by the City of Concord!A copy ofthe Executive Summary is being mailed to all members of the Board prior to the next meeting and Board members are being advised that if they wish to peruse the full report,they may do so at the CCCVB office. I have spoken with Craig Labadie, City Attorney for the City of Concord and he indicates that he will be providing a redacted copy of the report to you. I want to assure you on behalf of the Board,that the CCCVB intends to act with deliberate speed and due consideration of all required formalities and the needs of all potential creditors. The Board is also cognizant of the provisions ofArtaicle 13 of the Bylaws which provides,"In the event of dissolution, the assets shall be disposed of by a distribution to the governmental entities that contributed to the Bureau based on an average of the last three years of contributions received immediatelypreceding the dissolution. The calculation of contributions shall be based on an audited statement paid(for)by the Bureau." The CCCVB intends to abide by this Article, to the letter. The Board decided to cease operations at the last Board meeting,which is not to say that the Board voted to wind up and dissolve. There is an upcoming Special Meeting of the Board of Directorson August 16,2004 at which time the issue offormally voting to wind up and dissolve will ONE CORPORATE CENTRE, 1320 WILLOW PASS ROAD, SUITE 240, CONCOFto. CA 9$520 TELEPHONE (925) 798-3A t 9 A FACSWILE(925) 798.31 IS E-MAIL. RONALOOMULLINLAW COM .... Aug . 6 2004 . 2 : 34P1�1 No• 2218 P. 3/4 MULLIN LAW FIRM John Sweeten CountyAdministrator August 6,2004 Page Two be discussed and voted upon. However,this vote is insufficient for a dissolution of this nonprofit mutual benefit corporation. You correctly pointed out in your letter that CCCVB must comply with the provisions of Corp Code Section 8610(x),which,requires an affirmative vote to dissolve by both the Board and the members. As I mentioned above, there is a special meeting of the Board to consider this action August 16, 2004 and a written ballot is being prepared for distribution to the membership. Presently the membership number stands at 52. Upon receiving approval from the Board and the membership of CCCVB, I have been instructedto immediately file a certificate to wind up and dissolve and to file a petition in the Contra Costa Superior Court for a court supervised dissolution. The members of the Board are keenly aware of their responsibilities under Corp. Code Section 7231,and to that end are endeavoring to gather the information necessary to meet all of the obligations of the corporation with existing assets. At the last regular Board Meeting of July 29, 2004, the Board unanimously adopted a resolution approving a severance package for Rita Corbinook and Hazel Sturm. Both of these women are=long term employees ofthis corporation having served 18.5 years and 25.5 years respectively. They have done an excellent job representing and promoting the interests, not only of the hoteliers and members of the CCCVB, but also of the County and the City of Concord. The severance package was approved unanimously by the Board,including by Lara D eLaney, your appointed representative on the Board. In furtherance of this approval,a Severance Agreement was drafted by my office providing for a full release of all claims and confidentiality provisions that were in the best interest of CCCVB. These actions are consistent with employment law practices dealing with the layoff of very long term employees and fulfill the directives of unanimous Board of Directors exercising their independent management discretion. Please keep in mind that while the bookkeeping practices and expense accounting were less than complete,no one has ever alleged that any employee or officer of the CCCVB has done anything-wrong.I personally spoke with Bob Kochly regarding this matter and he agrees that he could not find anything that rose to the level of criminal activity. We can leave it to hindsight as to whether members of the Board, including your representative and the representative from the City of Concord who never attends Board meetings, should have been more diligent in the review of annual audits, policies and procedures related to expense reimbursement, hiring of relatives, financial oversight and other issues addressed by the Audit. You should be aware that the Board offered to immediately implement all of the recommendations of the auditors, but the City of Concord simply chose not to renew the contract with,CCCVB. By the way,those recommendations would have been implemented and overseen by ................................................................... Aug . 6 . 2004 2 34PM No 1dfN. 4/4 MULLIN LAW FIRM John Sweeten CountyAdministrator August'6, 2404 Page Three Ron Howard, former finance director for the City of Concord. The annual audited financial statement for CCCVB were supposed to be ready by the end of August, 2004 for delivery to the Board, the City and the County. 1 have requested that the auditors also receive a copy of the City audit for their review. This may delay the preparation of the final report, but I will keep you posted in that regard. Finally,let me assure you and the Board of Supervisors that the CCCVB intends to cooperate with the County and the City in this difficult process of winding up and dissolving. The CCCVB has always cherished.a good working relationship with the City and County and would life to maintain that relationship to the end. Very truly yours, LAW F Ronald K. Mullin cc: Ed James, Concord City Manager _. _. _. _..._... Aug 09 04 02: 57p p. r"44zff, / Nationat -= Association 1007 7 "' Street, Suite 200, Sacramento, SA 95814 Tall Free: E366.544.7398 • Direct. 916-551-3378 www.NEMSAUSA.org Dear Supervisors It has carne to our attention that the Contra Costa County RFP for ambulance transport is due to be released this week. Thos; purpose of this letter is to respectively request a delay in the release be afforded until such time as the National Labor Relations Board can complete the representation election currently underway for the 273 EMT's and paramedics currently employed by American Medical Response in Contra Costa County. The ISP process would be negatively affected during this change and would create undue hardship on an already volatile situation. Prior to and during the RFP process American Medical Response will rightfully consult with and involve the EMS workers in the field, through their respective labor representation. American Medical Response is preclude by law to enter into discussions with the new organization prier to the new organization being certified. The switch will occur no later than September 3, 2004. As you have already indicated the; input from the EMS workers in the field is important in this process. That input would be significantly compromised while the representation is influx. fourprompted attention to this matter is greatly appreciated. Please contact me or the; National Labor Relations Board A-ent Region 32 Virginia Jordan if you have any questions or need further information. Sincerely Torren Colcord. President NEMSA