Statement to Pensacola Bay Area Chamber of Commerce Executive Committee
September 12th, 2011
By Ellis W. Bullock and Denis McKinnon
First, thank you for giving us the opportunity to address you today. Over the past week there have been a series of significant misunderstandings and many people have not been informed of the facts. It is our hope today to present the facts so that as we move forward so informed decisions can be made. In order to avoid any further confusion, I want to start by clarifying distinctions between two separate entities and initiatives that we will be referencing today: TACC and TDC.
TACC, the Tourism Administration Convention Committee, is the direct governing board of our Convention and Visitors Bureau (CVB). The designated Tourism Chairman of the Chambers Executive Board, currently Harlan Butler, chairs it. TACC’s membership consists of representatives from Escambia County, the City of Pensacola, Pensacola Beach, Perdido Key, and the Hospitality Round Table, as well as the CVB.
The TDC, or Tourism Development Council, is a nine-member board, appointed under Florida statutes governing the tourism development tax. In Escambia County the TDC’s primary responsibility is the oversight, management and distribution of tourism development tax funds, better known as Bed Tax.
To provide you with a clear picture of how we got to where we are today it is important we first provide you with a brief historical background of two very separate and distinct tourism industry initiatives.
In 2008 there was a growing concern among many individuals within our tourism industry regarding the amount of Bed Tax funds that were allocated to support the Pensacola Civic Center. State Bed Tax statues make it clear such revenues are primarily for the purpose of tourism development and promotion and some questioned allocations to the Civic Center. In addition, questions were being raised at that time regarding whether Escambia County was appropriately following state law concerning bed tax distribution and management. These concerns were voiced in public meetings of the TACC committee, chaired by then Chamber Executive Board member John Panyko.
The result was Mr. Panyko implementing actions addressing these industry concerns. He drafted a letter, co-signed by representatives of the hospitality industry to each County Commissioner, and subsequently held individual meetings with each Commissioner to discuss the issues outlined in his letter. Then Chamber Board Chairman Mort O’Sullivan participated in some of the meetings, as did CVB Director Ed Schroeder. I feel it is important to note that at this point that representatives of the Perdido Key Chamber of Commerce also participated in these initiatives.
These initial efforts led the County to establish a Civic Center Study Commission and to the hiring of consultants to analyze Civic Center operations with the goal of determining how those operations could be improved to reduce the impact on available Bed Tax funds earmarked for tourism development and promotion.
However, in his letter Mr. Panyko outlined other areas he felt were not being satisfactorily addressed by the County Commission.
In late 2009 information came forward indicating a proposed change in the county’s budgeting policy that would draw from the Bed Tax additional expenses related to the Civic Center. The result would be there would be little, if any funds available from that source for tourism promotion and development. Potentially, the move could have been so drastic as to reduce tourism funding to a point where the Convention and Visitors Bureau could not operate.
In early 2010 hoteliers and other tourism industry interest expressed a desire to re-open discussions with County officials. That initiative was curtailed in the face of the BP oil spill as other matters grew in importance.
At the beginning of this year, current TACC Chairman and Chamber Executive Board member Harlan Butler and others representing tourism industry partners indicated a desire to re-open dialog with the County on un-resolved Bed Tax management matters. As a result, Mr. Butler asked me to organize a meeting of all concerned parties. TDC Chairman Denis McKinnon was invited to the meeting and at the meeting it was requested that he assist with any initiatives going forward. He agreed.
As a result, Mr. McKinnon revised Mr. Panyko’s original letter to the County Commissioners, updating it to address all outstanding Bed Tax issues. The revised letter was sent to each Commissioner and the County Administrator.
Throughout March and in early April, meetings were held with each County Commissioner to discuss the letter’s content. Participants in those meetings included Mr. McKinnon, Mr. Butler and representatives of the hospitality community. It should be noted that Mr. McKinnon and Nash Patel, a TDC member, intentionally refrained from attended certain meetings throughout this entire process, although the matters discussed were not official business of the TDC. Their concern was to avoid any potential questions that might arise regarding the Florida Sunshine Law.
It is important to note, that until this point, the governance of the CVB had not been discussed in any formal manner. However, it is also important to know that over the years, many in the hospitality industry have questioned what they perceived as a cumbersome Chamber/TDC/CVB structure. Mr. Julian MacQueen, owner of InnisFree Hotels, has been particularly vocal this regard. Through his experience conducting business in other markets, Mr. MacQueen recognizes the unusual structure of our tourism governance. Indeed, we are the only county in Florida that is a major tourism destination whose tourism governance is structured in our particular manner.
I would like to also note during this time Mr. Schroeder and I met with Chamber CEO Jim Hizer and Chamber CFO Brian McBroom and briefed them on the initial Panyko Bed Tax initiative, as well on as on follow-up efforts. We provided them copies of the letters that had been sent to the County Commission, as well as discussing the fact that hospitality industry interest had questioned the structure of CVB governance. I indicated to Mr. Hizer at that time that I did not feel those concerns were a “front burner issue,†but that it was one that could surface in the future. Mr. Hizer expressed a hope that, before any action was taken an appropriate study be done with Chamber involvement. In all subsequent discussions I was careful to represent those views.
During the BP crisis dealings began between county and state officials, the Governor’s office, and BP that have lasted well into 2011. During those lengthy and at-times complex dealings, Mr. McKinnon and Commissioner Grover Robinson recognized separately that our current CVB structure and the manner in which it differed from the norm throughout the state was hindering Escambia County’s ability to be timely in competing for a fair share of relief funds.
In May there was a follow-up meeting, including Mr. Butler and other hoteliers. The primary purpose of the meeting was to receive an update from Mr. McKinnon on how Bed Tax management issues were progressing with the County. During this meeting Mr. McKinnon said he intended to begin a process to review governance of the CVB. Prior to this meeting, Mr. McKinnon had informed Mr. Hizer of those intentions.
During the May meeting, I, as a representative of the Chamber and the CVB, expressed my feeling that everyone should “be careful what you ask for†and noted the tourism industry had been well served by the Chamber and that advantages exist to having the CVB under the Chamber’s direction. I also said all concerned parties, – the Chamber, County, City and the private sector – needed to be included in the process as it moved forward. Later, I shared those views with Commissioner Robinson, who at the time wanted to move fairly quickly toward separating tourism from the Chamber.
It was also suggested by Mr. McKinnon in the May meeting that Chamber Board Chairman Collier Merrill and Pensacola Sports Association Director Ray Palmer be invited to a follow-up meeting. Mr. Palmer’s inclusion was to receive his input on sports-event marketing, something that commonly falls under the responsibility of CVBs. Mr. McKinnon also indicated a need to set up a meeting with County Administrator Randy Oliver and requested Mr. Schroeder begin gathering information from other Florida counties on the governance of their respective CVBs.
About the same time at a regularly scheduled, public TDC meeting, Mr. McKinnon reported to the entire TDC board that he would be opening discussions regarding a review of CVB governance and would provide a full report at a future meeting. Commissioner Robinson, the county’s TDC representative, said he agreed the matter of governance should be studied and indicated he believed a change in structure might be in order.
In mid-June another meeting regarding updates on Bed Tax matters for tourism industry partners was held. Mr. Merrill, in his capacity as chairman of the Chamber’s Executive Committee, was invited and attended. At the meeting the issue of CVB governance was discussed and it was agreed Mr. McKinnon and I would schedule a subsequent meeting with Mr. Merrill in order to discuss the formal inclusion of the Chamber in any future discussions.
That meeting was held Aug. 9. At the meeting Mr. Merrill said it would be best for Mr. McKinnon, Mr. Butler and myself to attend the next meeting of the Chamber Board Executive Committee, scheduled September 12th. The intent was for the three of us to come to that meeting to provide a detailed background on the governance matter and seek participation and advice on how to best move forward.
On Sept. 6, in the Pensacola News Journal, Mr. Hizer expressed concern that he was not invited to a August 23rd meeting between the hoteliers, Mr. Butler and Mr. McKinnon where there was an agenda item regarding CVB governance. The primary purpose of the meeting was not to address CVB governance. Instead, it was to update tourism industry partners on outstanding Bed Tax management matters. The agenda item concerning CVB governance was nothing more than a brief report from Mr. McKinnon that he would be meeting with the Chamber Executive Committee on Sept. 12 to begin a discussion of a formal CVB governance review progress.
I, and I believe Mr. Schroeder, made the assumption that due to the involvement in these discussions of Mr. Merrill, the chamber’s board chairman, and Mr. McKinnon that Mr. Hizer was more fully in the loop of these issues. In retrospect, I admit I should have informed Mr. Hizer directly and in a timely manner. My failure resulted in many unnecessary misunderstanding and to these unfortunate events. For that oversight and any problems it has led to I apologize.
In recent week many emails written in connection with these events have been made public. Many that have been published have been taken out of context. Some, unfortunately, were worded in a way that makes their meaning unclear or raise questions. However, what I know and I think everyone involved in this process knows, is there was never intent by anyone involved in these initiatives to be deceptive, nor was there a pre-conceived desire to take CVB governance away from the Chamber. Everything that has been discussed has always been out in the open and discussed in public meetings of the TDC and TACC. While it is painfully obvious that too many people should have been more informed about this matter, that does not mean inappropriate actions have been taken, that laws were broken or that a willful wrong has occurred.
A question has been raised about whether my company, EW Bullock Associates, which is the agency of record for the CVB, has a conflict of interest in these events. To answer that, I must remind you that the initiatives related to bed tax management were initiated by Mr. Panyko, then the Tourism Chairman of the Chamber Board, and continued by his successor, Mr. Butler. Both requested my assistance and involvement. In May, when formal discussions arose regarding CVB governance, I represented the Chamber’s view appropriately by urging a process that would be open and inclusive of all parties concerned, including the Chamber.
In both my head and in my heart I know that my participation in this matter was above board and that my intent was only to further the success of the tourism industry that is so vital to our economy.