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Brock Issued: July 3 2013 Clerk of the Circuit Court 3299 'l amiami Trail East Suite 02 Naples. FL 34112-5746 1N .collierelerk.com 1 3 A Prepared by: Ron Dortch, Senior Internal Auditor Megan Gaillard, Senior Internal Auditor Report Distribution: Board of County Commissioners Leo Ochs, Jr., County Manager Jeff Klatzkow, County Attorney Mark Isackson, Director, Corporate Financial and Management Services Jack Wert, Tourism Director Len Price, Administrator, Administrative Services Joanne Markiewicz, Interim Purchasing Director Derek Johnssen, Clerk Assistant Finance Director Connie Murray, Clerk Operations Manager Cc: Dwight E. Brock, Clerk of the Circuit Court Crystal K. Kinzel, Director of Finance & Accounting Draft Audit Report Issued for Response: February 5, 2013 Management Responses Received: February 19, 2013 (by Jack Wert&Joanne Markiewicz) February 20, 2013 (by Connie Murray) February 28, 2013 (by Derek Johnssen) Revised Management Response Received: June 24, 2013 (by Jack Wert&Joanne Markiewicz) July 2, 2013 (by Kelly Green on behalf of Jack Wert) TABLE OF CONTENTS OBJECTIVES 2 SCOPE 2 BACKGROUND 3 SUMMARY 4 OBSERVATIONS, RECOMMENDATIONS, &MANAGEMENT RESPONSES 5 OTHER RECOMMENDATIONS 15 CONCLUSION 16 ADDITIONAL MANAGEMENT COMMENTS 17 Aik The files and draft versions of audit reports remain confidential and protected from public records requests lip during an active audit under N'icolai Ev. Baldwin ddug. 28. 1998 DCA of FL, 5Ih District) and Florida Statute 119.0713. Work-papers supporting the observations noted within this report will become public record and can be made available upon request once the final audit report has been issued. 1 13A I • Objectives The objectives for this review were to verify: • Contracts for tourism marketing services adhere to the Collier County Purchasing Policy; • Tourism Department expenditures were eligible transactions under the applicable contract; properly supported; correctly processed for payment; and served a valid, legal,and public purpose; • Tourist Development Tax revenues were correctly calculated and allocated to the appropriate general ledger funds; • Existence and accuracy of the petty cash fund(s) assigned to the Tourism Department; evaluate internal controls; and ensure compliance with County Petty Cash Policies and procedures; and • Fixed Assets were properly recorded. Sco e The review consisted of, but was not limited to the following tasks: • Compiling files and information from the Tourism Department, the Clerk's Finance and Accounts Payable Departments, and documents available in county public records; • Reviewing applicable Florida Statutes; • Reviewing applicable County Ordinances and Resolutions; • Reviewing applicable County Manager Administrative Policies and procedures; • Reviewing applicable BCC agendas,meetings, and minutes; • Reviewing Tourism Department RFP's, bids,and contracts; „ , • Interviews with Tourism and Purchasing Department staff; • Interviews with Clerk's Finance and Accounts Payable staff; • Unannounced cash counts of the Tourism Department Petty Cash Fund; • Reviewing Certificate and Request of Imprest Funds forms and Annual Confirmations; • Reviewing fixed assets records and physical inspection of fixed assets; • Reviewing Monthly Tourist Tax Revenue Allocations for fiscal years 2004—2011; and • Reviewing a sample of Tourism Department advertising and marketing expenditures and related contracts for fiscal years 2009-2011. S 2 Background Florida Statute 125.0104 - Local Option Tourist Development Act asserts that any county in the state may levy and ': impose a tourist development tax on the rental or lease of hotel/motel, apartment/condominium, campground, and vacation rental stays of six months or less. Per F.S. 125.0104, at least 60 days prior to levying and imposing the tourist development tax, the governing board of the county(herein referred to as the BCC) must adopt a resolution establishing and appointing members to the county tourist development council. F.S. 125.0104 also mandates that the local Tourist Development Council (TDC) prepare and submit to the BCC for its approval a plan for tourist or county development,contingent upon approval of the tourist development tax by County voters. In 1992, the BCC adopted Ordinance No. 1992-18 authorizing the formation of the TDC, subject to voter approval of a 2% Tourist Development Tax (TDT). Collier County voters approved a referendum and the BCC adopted Ordinance No. 1992-60 levying a 2% TDT on rentals within Collier County as defined by F.S. 125.0104. In 1995, Collier County voters approved a second referendum and the BCC adopted Ordinance No. 1995-46 increasing the TDT by 1%. In 2002, the BCC adopted Ordinance No. 2002-501 creating the Tourism Department. In 2005, Collier County voters approved a third referendum and the BCC adopted Ordinance No. 2005-43 increasing the TDT by an additional 1%, resulting in the current 4% TDT. The Collier County Tax Collector is responsible for collecting the 4%TDT revenue and remitting the funds to the BCC. As required by F.S 125.0104, the Collier County TDC consists of nine voting members serving staggered four-year terms. Members are appointed by the BCC and represent local government, the tourism industry, and owners/operators of establishments subject to the TDT. The TDC serves in an advisory capacity to the BCC and is responsible for developing a strategic plan for tourist development and recommending uses for TDT revenues. F.S. 125.0104 defines authorized uses for TDT revenues, while Collier County Ordinance 2005-43 details the specific uses and allocation of TDT revenues. Collier County uses TDT revenues to fund the following activities: • Improvements to beach/park facilities and beach related projects(Category A); • Advertising and marketing of local facilities and attractions(Category B); z' • County owned and operated museums(Category C-1); • Museums owned and operated by municipalities and not-for-profit organizations(Category C-2); and • Emergency advertising for occasions such as the Deepwater Horizon oil spill in 2010 (funded by transfers from the above categories). Three county departments separately oversee these activities. Coastal Zone Management is responsible for improvements to beach/park facilities and beach related projects. The Collier County Museum manages county owned and operated museum exhibits. The Tourism Department, operating as the Naples, Marco Island,Everglades Convention and Visitors Bureau, coordinates advertising and marketing activities, including emergency advertising and museums owned and operated by municipalities and not-for-profit organizations. Since 2003, the Tourism Department has contracted with Paradise Advertising and Marketing, Inc., a private advertising agency, to develop and execute marketing and advertising campaigns. The Tourism Department also circulates information about visiting Collier County to worldwide travel media and serves as the point of contact for meeting planners, tour operators, travel agents, and other industry professionals. In addition, the Tourism Department awards grants and sponsorships funded by TDT revenues to organizations for out-of-county marketing and promotion of cultural, sporting, and other events to attract tourists to Collier County. The Tourism Department's operating budget is funded by TDT revenues and requires BCC approval. In fiscal year 2011, the Tourism Department had seven full-time employees with an operating budget of$6,461,400. For a review of the TDT Revenue Grant Applications for fiscal year 2011-2012, see Interim Audit Report 2013-6 Limited Scope: Tourist Development Tax (TDT) Revenue Grant Applications — Fiscal Year 2011-2012 (formerly Interim Audit Report 2011-2A). 3 s Summary The following observations were generated during this review: 1. Change orders caused annual tourism marketing expenditures to routinely exceed contract. 2. Changes in hourly rates and services were considered a"Zero"dollar change order. 3. Inconsistencies were noted between the County's Request for Proposal, vendor proposal, and contract for tourism marketing services. 4. Expenditures submitted by vendors were not in compliance with contract terms. 5. A donation by Paradise Advertising and Marketing, Inc. was not consistent with TDC and BCC recommendations. 6. There is a potential appearance of a Code of Ethics violation ("conduct that gives the appearance of impropriety"). 7. Certain Tourism Department expenditures were not in compliance with County Resolution, Policy, or procedure. 8. Tourism Department Petty Cash fund was not in compliance with County Policy. 9. Inaccuracies were noted in SAP vendor account information. Other Recommendations noted during the audit. • The Clerk's Finance staff should update the Monthly Tourist Tax Allocation Spreadsheet in a timely manner when the TDT rate and/or allocation percentages change. • Invoices should be date stamped, initialed, and promptly processed by Tourism Department staff. Controls over processing change orders to tourism contracts, payment of tourism expenditures, obtaining and , updating vendor contact information, and the Tourism Department's petty cash fund should be reviewed, evaluated, '' and monitored by county staff to ensure compliance with Florida Statutes, County Ordinances and Resolutions, Policies, and Procedures. County staff should also ensure vendor proposals address RFP specifications; and terms and conditions in documents, including executive summaries and contracts, presented to the BCC are consistent. County staff should consider implementing consistent County-wide policies and procedures for donations. County officials should take care to avoid the appearance of a conflict of interest. Inadequate controls increase the risk for fraudulent payments and misappropriation of county assets. County Management Summary County staff members are committed to implementing business processes which are consistent with ensuring fiscal responsibility and integrity. County Management has made a number of changes to its business processes prior to, and, as a result of this audit, including,but not limited to: • Completed refresher training on Purchasing Card transactions with Tourism staff; • Returning the petty cash fund to the Finance Department by end of fiscal year 2013; • Updated solicitation documents to include the County's historical spend; • Report all change orders and contract amendments to the Board consistent with Purchasing Policy; and • Continue to work with the Clerk's Finance and Internal Audit Office to ensure corrections have been addressed. 4 13A Observations 1 ) Change orders caused annual tourism marketing expenditures to routinely exceed contract. Contract #06-4007 awarded to Paradise Advertising and Marketing, Inc. for Tourism Marketing Services was in effect from October 1, 2006 through March 31, 2011 for $2,350,000 annually. During the term of the contract, five change orders were processed for additional marketing services totaling $3,767,000, resulting in tourism expenditures exceeding the original contract amount by approximately 53%. Contract#06-4007 Original Term- 10/1/2006 to 9/30/2008 $ 2,350,000 Date Change Order# Purpose Amount Contract Total %Change 10/09/07 Amendment#1 Increase County Museum Advertising budget $ 70,000 $ 2,420,000 3.0% 07/08/08 Change Order#1 Additional Marketing expenditures $ 700,000 $ 3,120,000 28.9% $ 770,000 32.8% Contract Renewal#1 10/1/2008 to 9/30/2009 $ 2,350,000 Date Change Order# Purpose Amount Contract Total %Change 12/02/08 Zero Dollar#1 Replace Exhibit A-Hourly Rates $ - $ 2,350,000 - 03/09/09 Change Order#2 Additional International Marketing Expenses $ 204,000 $ 2,554,000 8.7% 04/20/09 Zero Dollar#2 Clarify Agency Fee language in contract $ - $ 2,554,000 - 07/15/09 Change Order#3 Additional Marketing Expenditures-Summer Campaign $ 918,000 $ 3,472,000 35.9% $ 1,122,000 47.74% Contract Renewal#2 10/1/2009 to 9/30/2010 $ 2,350,000 Date Change Order# Purpose Amount Contract Total %Change 04/01/10 Change Order#4 Additional Marketing Expenditures-Yearly Campaign $ 1,875,000 $ 4,225,000 79.8% Ve4 Total Change Orders=J $ 3,767,000 I l 53.43"I It does not appear change orders to Contract#06-4007 were considered when the County set the $2,100,000 budget amount for RFP#10-5541,Tourism Marketing Services. Recommendation: • Going forward, County staff should ensure services solicited in the bidding documents(i.e. RFP)reflect the full services of the intended contract. County Management Response: a. "Change Orders are the mechanism that the Purchasing Department utilizes to receive BCC authorization for increases in expenditures not contemplated at the start of an agreement. In the case of Paradise Advertising and Marketing, Inc., Change Orders were requested for specific TDC recommended and BCC approved additional destination marketing expenditures. These change orders occurred during an un-anticipated downturn in tourism, for circumstances beyond the County's control; change orders were issued to reduce the negative impact on the community's economy. b. The BCC approved FY 2005-06 budget amount for tourism advertising and marketing was used in bid solicitation #06-4007. Historical spend activity is identified in solicitation documents; the County will endeavor to include information about unusual and unanticipated annual expenditures in Tourism marketing related solicitations. c. Additional funds or other modifications are approved by the Board via a Change Order, or amendment, according to the BCC approved Purchasing Policy." 5 Internal Audit Response: 13A By under soliciting services, a concern is raised that potential respondents may be deterred from responding. This may narrow the competition, where marketing agents may be interested in large contracts. The contract amount has been increased each year through change orders to a level that may attract additional respondents. 2) Changes in hourly rates and services were considered a "Zero" dollar change order. Contract #06-4007 awarded to Paradise Advertising and Marketing, Inc. for Tourism Marketing Services was in effect from October 1, 2006 through March 31, 2011. In December 2008, a change order was processed for the "Replacement of Exhibit A specifying hourly rates for services performed on behalf of Collier County. This new Exhibit A indicates new services and rates, which will be performed within the dollar limits of the existing agreement." County staff regarded the new exhibit as a "zero" dollar change order and did not obtain BCC approval. The new Exhibit A contained five additional staffing positions related to digital/internet services and new hourly rates ranging from $50 per hour for a Data Entry Specialist to$200 per hour for an Interactive Developer. Changes to rates and services significantly alter the original terms of the contract, which requires BCC approval. If rates increase, then service hours decrease accordingly in order for expenditures to remain within "the dollar limits of the existing agreement." Also, Contract #06-4007, section #4 - THE CONTRACT SUM: AGENCY FEE states "... All media and production costs ... up to $2,000,000 annually will be billed to the County at net, so that the County receives any available discount. Media and production billing over $2,000,000 annually ... will be billed at gross, reflecting a Contractor commission of 15%". County staff did not calculate the monetary impact of the new rates and additional positions. A substantial increase in digital/internet services may cause advertising and marketing costs to surpass the $2,000,000 threshold more quickly, subjecting additional expenditures to the 15% Contractor commission and increasing the cost of tourism marketing services. Recommendation: • County staff should implement procedures to ensure change orders to existing contract terms and conditions are properly evaluated and approved by the BCC. County Management Response: a. "The Tourism staff will follow the BCC approved Purchasing Policy related to change orders and amendments and work directly with the Purchasing Department to execute, and obtain approval by the Board. b. In the audit for Contract #06-4007, the "new" Exhibit A did not increase rates, rather, it provided for new personnel categories, all of which (the new personnel categories)fell within the contract scope of work. These new personnel categories were added in the event the department needed to utilize these skill sets in the scope of work and to enable the payment by the Clerk's Finance staff." Internal Audit Response: New services and rates have a financial impact on the contract. If the new hourly rates and positions are added and the budget remains at the same set amount, then the number of service hours may decrease in order to stay within budget.This results in a fiscal impact. "Zero"dollar change orders implies there is no fiscal impact. For example, if the advertising rate equals $10 hour and the total advertising budget is $1,000,then the total service hours cannot exceed 100 hours. If the hourly rate increases to $20 hour and the budget remains $1,000, then total service hours available is reduced to 50 hours. The County may receive fewer service hours for the same budgeted , S\, amount. The addition of new positions/services may result in the set budgeted amount being reached faster. 6 134 ' 3) Inconsistencies N∎erc noted between the Count■ 's Request for Proposal, vendor proposal, and contract for tourism marketing services. The Board of County Commissioners (BCC) awarded Contract #10-5541, Tourism Marketing Services,to Paradise Advertising and Marketing, Inc. (Paradise Advertising)on January 25, 2011.A comparison of the County's Request for Proposal (RFP), Paradise Advertising's submitted proposal, and contract approved by the BCC identified the following inconsistencies: Budget • The RFP budget was$2,100,000 plus an undetermined amount for museums. • Paradise Advertising's proposal was $2,400,000, which included a $2,100,000 annual base and a $300,000 administration fee. • The Contract was $2,350,000, which included a $2,000,000 annual base, plus a $300,000 administration fee and$50,000 in advertising and marketing services for museums. Emergency Funds • The RFP included a provision for$1,500,000 in emergency funds. • Neither Paradise Advertising's proposal nor the Contract referred to emergency funds other than Paradise Advertising will work with the County to develop an emergency advertising plan. • Paradise Advertising was paid $2,375,000 in emergency funds for advertising under the previous tourism marketing services contract(Contract#06-4007). Administration Details • The RFP required vendors to provide projected costs with estimated duration and a schedule of principals and staff. • Paradise Advertising's proposal included projections of 490 hours per month from principals and staff. rc Note: In December 2010, three key employees with experience working on Collier County's marketing account left Paradise Advertising, including the company's Vice President/Creative Director and an account supervisor with 20 years of industry experience. This change in staffing occurred after Paradise Advertising submitted its proposal in August 2010, but was not disclosed to the BCC prior to approving Contract #10-5541 in January 2011. The principals on Collier County's account, as detailed in Paradise Advertising's proposal, were substantially altered prior to awarding the contract without notifying the BCC. Additional Billing • The RFP allowed for creative time and out-of-pocket expenses. • Paradise Advertising's proposal included hourly rates for creative design; incremental advertising options of $1,000,000; and out-of-pocket expenses to be billed at net. • The Contract includes creative time in regular media and production costs, which are billed at net up to the $2,000,000 annual base; anything over the $2,000,000 will be billed at gross; and out-of-pocket expenses will be billed at net. Use of Subcontractors • The RFP did not allow for any mark-up and vendors were required to provide a list of subcontractors with letters of intent. • Paradise Advertising's proposal stated no subcontractors would be required, but later referred to the use of outside vendors to augment services. Paradise Advertising's proposal did not include a list of outside vendors. • The Contract requires Paradise Advertising to provide invoices from outside vendors. 7 Commission 13 A • The RFP encourages vendors to accept less than a 15%commission or charge a fee in lieu of commissions. • Paradise Advertising's proposal does not specify a commission percentage. • The Contract includes a $300,000 administrative fee, plus a 15% commission on costs over the $2,000,000 annual base. Recommendations: • County staff should ensure contracts are consistent with the documented scope of work. • County staff should use the terms and conditions detailed in RFPs and vendor proposals to prepare contracts to ensure consistency within documents presented to the BCC for approval. County Management Response: a. The Tourism Department will comply with the BCC approved Purchasing Policy for any RFP solicitations. b. Contract # 06-4007 for Tourism Marketing Services was awarded to Paradise Advertising and Marketing, Inc. after an RFP process that adhered to the BCC approved Collier County Purchasing Policy. c. The contract with Paradise Advertising and Marketing Inc. was for $2,350,000 which accurately reflected the final BCC approved budget for that fiscal year for these services. d. The RFP indicated that Emergency funds of$1,500,000 could be used in the case of a declared emergency for destination advertising and marketing. Emergency marketing expenditures are used only when needed and are not reoccurring. e. The Vice President/Creative Director and an Account Supervisor left Paradise Advertising in December of etl; 2010. Those positions were immediately filled by Paradise Advertising with seasoned professionals with v credentials that exceeded those of the departing staff members. Neither Collier County, nor the Tourism Department experienced any decrease in service as a result of these staff changes. We experienced an immediate increase in account service attention and a much higher level of creativity with the new staff members. f Paradise Advertising and Marketing, Inc.is a full-service marketing company providing to its clients a wide range of in-house advertising,promotion, media and other marketing services. They did not intend to use, nor have they used subcontractors for their creative work or other outside services on our account under their agreement with Collier County. g. An RFP outlines the scope of services the County wishes to receive. The vendor Proposals indicate what each bidder is willing to offer related to that scope of services. The Contract is negotiated with the successful vendor to achieve the best possible arrangement for the County. For these reasons, these three documents by necessity may have a few differences and might not have complete agreement. • The Board's Purchasing Policy (VIII A 3) allows departments to use the competitive proposal methodology "Where the County is incapable of specifically defining the scope of work for which the commodity(s) or service(s)is required... " • The solicitation is used to describe the "intended scope of work/service"and the selection criteria;the vendor's proposal describes the vendor's ability to perform the intended scope of work and respond to their qualifications; and the contract is the codification of what will be performed for the stated, and agreed upon terms and conditions. The goals of each of these documents are different, and inter-related. • Contracts that are the result of requests for proposals are negotiated with the selected vendor and may not necessarily match the solicitation and/or the vendor's submitted proposal. This negotiation is in compliance with Purchasing Policy as noted above. 8 13A .4 • Each Selection Committee is provided instructions regarding the review process (including selection criteria), the solicitation document and the vendor's proposals. ( Internal Audit Response: Item"f"-Use of Subcontractors Miles Media was hired by Paradise Advertising to provide webhosting services for County websites. It appears Miles Media is serving in the capacity of a subcontractor of Paradise Advertising under contract #06-4007. Paradise Advertising did not disclose Miles Media's involvement in the completion of contract#06-4007 to Collier County, as required by the RFP. Miles Media has a separate contract with Collier County to provide webhosting services at a lower rate. See Observation#4 for further detail. 4) Ex )enditures submitted bx vendors were 1101 in corn nlia nce with contract terms. Vendor submitted an ineligible expenditure for payment. Contract #06-4007 awarded to Paradise Advertising and Marketing, Inc. (Paradise Advertising) for Tourism Marketing Services was in effect from October 1, 2006 through March 31, 2011. Paradise Advertising submitted an invoice dated May 6, 2010 for website hosting and maintenance services related to the Tourism Department's film commission website (www.shootinparadise.com). A review of Contract #06-4007 and the invoice noted the following: • Contract#06-4007, section#2 - Statement of Work did not list website hosting and maintenance as a service provided by Paradise Advertising. • Paradise Advertising submitted an invoice for website hosting and maintenance services completed by Miles Media Group, Inc. It appears Miles Media Group, Inc. is a subcontractor for Paradise Advertising. Collier County has a separate contract with Miles Media Group, Inc. (#09-5183) for tourism website design and :'ova fi maintenance, including www.shootinparadise.com. • Paradise Advertising was paid for a service already contracted through Miles Media. Paradise Advertising's Invoice #983-0 in the amount of $2,100 was for 6 months of website hosting and maintenance with an average cost of$350 per month. Under Contract#09-5183,Miles Media Group, Inc. charges Collier County a monthly rate of$250 for website hosting and maintenance. It appears Miles Media submitted the invoice for the website hosting and maintenance under Paradise Advertising's contract at a higher rate than was allowed under their contract. It appears Collier County overpaid website hosting and maintenance by$100 per month. Note: During the November 28, 2011 TDC meeting, a TDC member said Miles Media Group, Inc. was a subcontractor under the Paradise Advertising and Marketing, Inc. contract and held their own contracts with the County. The Tourism Director responded "No ma'am, that's not true". At the meeting the owner of Paradise Advertising and Marketing, Inc. confirmed Miles Media Group, Inc. was not a subcontractor. The above example directly conflicts with these statements. Contract#06-4007, section#4-THE CONTRACT SUM: AGENCY FEE states "... All media and production costs ... up to $2,000,000 annually will be billed to the County at net, so that the County receives any available discount. Media and production billing over $2,000,000 annually ... will be billed at gross, reflecting a Contractor commission of 15%." The payment of ineligible expenditures under Contract #06-4007 could cause advertising and marketing costs to surpass the $2,000,000 threshold more quickly, subjecting eligible expenditures to the 15% Contractor commission and increasing the cost of tourism marketing services. Documents presented to the BCC for approval were inconsistent. The Executive Summary presented to the BCC for approval indicated Contract#10-5534, between the County and t Alan S. Maltz, photographer, was for a series of 30 photographs to be completed"... over the next three years at an annual cost of$30,000 including travel and production expenses not to exceed $10,000 per year for a total project cost over three fiscal years of$90,000." 9 134 Contract #10-5534, TERM section states "This is a one (1) year agreement commencing on July 1, 2010 and terminating on June 30, 2011. The CLIENT may, at its discretion and with the consent of the ARTIST, renew the Agreement under all terms and conditions contained in this Agreement for two (2) additional one (1) year periods ... Funding is not guaranteed beyond one (1) year, and subsequent years' agreements will be based on availability of an appropriation of tourist tax funds." Contract#10-5534 also contained conflicting payment terms. The RIGHTS GRANTED section states "...Payment will be at the agreed amount of two thousand dollars ($2,000) per shot up to a maximum of sixty thousand dollars ($60,000) over a three (3)year period ..." The FINANCIAL TERMS section states"... it is anticipated that a sum of sixty thousand dollars ($60,000) plus expenses ... will be paid for the services of Alan S. Maltz over a three (3) year period based on availability and appropriation of tourist tax funds ... A portion of the expenses ... and other costs associated with this project will be paid by the CLIENT up to a maximum per year of ten thousand dollars ($10,000)." Annual expenditures complied with the most restrictive contract terms; however conflicting language increases the risk of inappropriate payments to vendors or may result in the Clerk's inability to pay vendors. Recommendations: • County staff should ensure contract terms are consistent and accurately described in documents presented to the BCC for approval. • When reviewing expenditures to the contract, Clerk's Accounts Payable staff should identify any conflicting language and/or discrepancies. County Management Response: a. "Tourism staff will ensure that contact terms are consistent and accurately described in documents presented to the BCC for approval. Tourism staff acknowledges that the use of Miles Media by Paradise Advertising and Marketing, Inc.for website hosting was not a correct procedure and we will advise this vendor and all of our other vendors that they must use the lowest priced vendor and ensure that the selected vendor does not have a contractual relationship with the County for similar services. b. The Alan Maltz agreement to purchase 30 images over three years has a wording conflict with the Executive Summary presented to the BCC. A review of SAP records indicates the Tourism Department expended$29,905 in FY 10, $30,000 in FY 11 and$30,000 in FY 12 for the services provided by Alan Maltz. This appears to be in compliance with the Agreement terms to purchase 10 images at $2,000 each plus production expenses for a total of$30,000 per year. c. Tourism staff will ensure that future Executive Summaries are in direct compliance with the related agreement when presented to the BCC for approval." Clerk's Accounts Payable Management Response: "Clerk's Accounts Payable staff will continue to ident61 any conflicting language and/or discrepancies crossing related legal documents. Purchasing will be contacted for further clarification of content and/or possible contract amendment if required in order to make a legal payment on behalf of the Board of County Commissioners." 5) A donation by' Paradise Advertising and Marketing, Inc. was not consistent with TDC and BCC recommendations. In December 2009, the BCC approved a $1,000,000 change order for additional marketing services to Contract#06-4007 with Paradise Advertising and Marketing, Inc. In the TDC's Advisory Board Meeting on Monday, January 25, 2010, Paradise Advertising and Marketing, Inc. offered to donate up to $100,000 of the media commissions to the county contingent upon being awarded and receiving payment in full for the $1,000,000 change order for additional services. The TDC Meeting Minutes state the firm's intent was to allow the TDC to re-invest the$100,000 into marketing efforts. 10 13A The owner of Paradise Advertising and Marketing, Inc. noted he would rely on TDC's direction regarding the proposed $100,000 donation. The TDC encouraged the $100,000 donation to be provided to the Marco Island Museum Exhibit Project. r.r In the BCC Meeting on Tuesday, January 26, 2010, the BCC Chairman was asked how the donation was to be allocated according to the TDC recommendation. The BCC Chairman said the donation would be allocated as follows: $50,000 to Marco Island Museum and $50,000 to be used for advertising services, rather than Paradise Advertising and Marketing, Inc. lowering their fees charged to the County for marketing services. On December 9, 2010, the donation was received by the County with $50,000 earmarked for the Marco Island Museum and $50,000 for Freedom Memorial, a project initiated by the BCC chairman. The donation was not consistent with the recommendation of the TDC and BCC Minutes. In the BCC Meeting on Tuesday, December 14, 2010, the BCC accepted the donation for $50,000 earmarked for Freedom Memorial. Recommendation: • The BCC should consider establishing a consistent County-wide donation process. County Management Response: "Tourism Department staff discussed with the Tourist Development Council (TDC) a proposal by Paradise Advertising to make a donation of a portion of their media commissions they would have earned as a result of the additional destination marketing funding approved by the BCC in response to the world-wide economic crisis that was negatively affecting tourism to our community. The TDC recommended a donation by Paradise Advertising to the Marco Island Museum. As an Advisory Board, the TDC only recommends actions to the BCC. The BCC, in turn, is under no obligation to follow TDC recommendations." - 6) "t here is a potential appearance of a Code of Ethics violation ("conduct that gives the ,, a ) )earance of ini )ro irietN"). Collier County Ordinance 2004-05 mirrors and further elaborates Florida Statute Chapter 112 -Code of Ethics. The Ordinance indicates "Public officials shall not solicit or accept, directly or indirectly, any fee, compensation, gift, gratuity, favor, food, entertainment, loan, or any other thing of monetary value, from anyone who the public official knows or reasonably should know: a. has, or is seeking to obtain, contractual or other business or financial relations with the county department or board with which the public official is affiliated..." Collier County Ordinance 2004-05 indicates it is the responsibility of each public servant to act in a manner that contributes to ensuring the public's trust in its government. Individuals should avoid conduct that gives the appearance of impropriety in the performance of his or her public duties. Since 2003, Paradise Advertising and Marketing, Inc. has been under contract with the County to provide tourism marketing services. On January 25, 2011, Commissioner Coyle, pointed out"...Paragraph 14 of the procurement policy prohibits those kinds of interactions between companies who are bidding on contracts and commissioners... `Firms and their agents are not to contact members of County Commission for purposes such as meeting or introduction, luncheons, dinners, et cetera'... `Failure to abide by this provision may serve as grounds for disqualification for award of this contract to the firm.' On July 25, 2011, the owner of Paradise Advertising and Marketing, Inc. had dinner with a sitting commissioner at the commissioner's home. The dinner was scheduled the night before a pending BCC (July 26, 2011) agenda item for the enrichment of the owner's company, with a change order for $800,000 of increased services and fees. This has the potential appearance of a conflict of interest according to Collier County Ordinance 2004-05. re Subsequent to this audit finding, Board of Co Commissioners amended the Collier County Ordinance q g' County through the adoption of Collier County Ordinance 2013-39. 11 Recommendations: l3 • All public servants and vendors should comply with county/state code of ethics. " • Public officials should take care to avoid the appearance of a conflict of interest. County Management Response: "The Tourism Department staff has and will continue to comply with County and State Code of Ethics. We have no knowledge of a dinner attended by a Commissioner and the owner of Paradise Advertising and Marketing,Inc. " 7) Certain Tourism Department expenditures NI ere not in compliance %%ith County Resolution, Policy, or )rocedure. Tourism purchasing card expenditures were not in accordance with County Resolution 2006-40 or County Manager Administrative(CMA)Policy#5808—Purchasing Card Program. • A review of Tourism Department purchasing card expenditures identified one transaction in which the employee e-mailed a vendor on January 21, 2011 explaining that a charge for a conference registration in mid-December 2010 did not appear on the employee's December purchasing card statement. The employee requested that the vendor wait to "... process those charges now after Feb. 1st because my January credit card limit has hit its max". County Resolution 2006-40, Section F—COUNTY PURCHASING CARD USE states"... The Purchasing Card issued to each Tourism Department staff member will have ... a maximum monthly spending limit of$10,000". Requesting vendors to hold or delay processing purchase card expenditures is a circumvention of spending limits established by County Resolution 2006-40. • 3 purchasing card expenditures for tradeshow exhibit services posted to Out of County Travel Professional Development(GL#640300). It appears Marketing&Promotion(GL#648170)is a more appropriate account. Expenditures should be appropriately classified. Tourism Department expenditure lacked proper supporting documentation. A review of Tourism Department purchasing card expenditures identified one transaction lacked an itemized receipt. The expenditure was airfare for the Tourism Director to attend a tradeshow in Washington,D.C. The receipt included with the expense report listed flight information but did not list the amount of airfare. CMA #5808, Section C(2)(h) states the cardholder agrees to "Obtain an itemized receipt for all purchases. The itemized receipt must include the quantity,a description of the item(s),the unit cost and the extended price ..." Incomplete supporting documentation and conflicting payment information on schedules and invoices increases the risk of fraudulent payments. Tourism employee expense reimbursement was overstated. A review of Tourism Department employee expense reimbursements noted an employee booked airfare for herself and a companion. The employee included the companion's $28.00 seat assignment fee resulting in an ineligible expense reimbursement. Accurate requests are necessary to ensure reimbursement of proper expenses. Recommendations: • Training should be provided to the Tourism Department Staff to ensure each person understands the policies, procedures, and forms governing Purchasing Card transactions. • • County staff should continue to review supporting documentation and expense reports to ensure expenditures are eligible; for the proper amount; and paid to the correct vendor. 12 134 • County staff should continue to review Purchasing Card Transactions to ensure expenditures are posted to the proper general ledger accounts. :; County Management Response: a. Tourism Management acknowledges that the vendor request was wrong and the tourism employee has been notified of this incorrect use of her Purchasing Card. The tourism employee in question was trying to register for a trade show that was in accordance with our tourism mission and was in the best interest of the County. b. Tourism Management acknowledges the errors on three purchasing card expenditures for trade show exhibit expenses that were incorrectly posted to the wrong GL code. Tourism staff will endeavor to post these types of expenses and all other tourism expenditures to the correct GL code in the future. c. The purchasing card expenditure for airfare by the Director to Washington DC was a change fee that was necessitated by the rescheduling of a BCC tourism item that required a later departure. The Tourism Director requested Delta Airlines to provide a more detailed receipt than the one they provided, but Delta was unable to produce such a document. d The expenditure for a seat fee of$28 for a companion was an oversight on the Tourism Department employee's part and she has reimbursed the County for that$28 fee. e. The Tourism Department staff received a Purchasing Card refresher course on March 28, 2013 by the Purchasing Department staff in the proper use of the County Purchasing Card. f Purchasing policies and County Manager procedures (CMA # 5808) were reviewed and acknowledgement forms signed by all Tourism Staff prior to receiving their card; an audit was conducted as recently as February /March 2012 validating credit cards were in the staff's possession. g. The Purchasing staff increased the Purchasing Card limits of some Tourism staff beyond the standard limits due to the amount of travel by staff members per Purchasing Resolution 2007-340 (approved 11/27/07; #10W), which was approved and dated after BCC approval of Resolution 2006-40. The Tourism staff intends to update Resolution 2006-40 to reflect consistency between the Purchasing Policy and the Tourism Travel Resolution. 8) Petty Cash fund was not in com )liance with County l olicti'. Unannounced reviews of the Tourism Department's Petty Cash fund on April 28, 2011 and September 15, 2011 identified the following: The petty cash fund was not replenished or balanced quarterly • A Reimbursement Form dated March 7, 2011 requested reimbursement for eight purchases dating from December 2005 through December 2009. • The custodian or sub-custodian did not document each time the petty cash fund was balanced. Since records were not available for review, Internal Audit was unable to verify if the petty cash fund was balanced on a quarterly basis. County Petty Cash Policy, Item#11 states"Petty Cash accounts should be replenished and balanced quarterly". Timely submission of reimbursement requests is necessary to ensure expenses are reported in the appropriate period. Quarterly balancing of petty cash funds is key to detecting and correcting any discrepancies in a timely manner. Appears the Tourism Department did not return prior annual confirmations and returned the Fiscal Year 2011 confirmation after the designated due date Clerk's Finance Department did not receive annual confirmations for Fiscal Year 2008, 2009, and 2010. For Fiscal Year 2011,the Tourism Department's confirmation was dated August 15,2011, but the Clerk's Finance Department did not receive the confirmation until August 25, 2011. 13 .7j County Petty Cash Policy, Item#15 states"Imprest Fund Confirmations will be done on an annual basis at the fiscal year end.The form will be sent to the departments by Finance and must be returned by the date requested." Petty cash funds may not be properly recorded if annual confirmation forms are not completed and returned by the established deadline. Fiscal Year 2011 annual confirmation did not list accurate fund information The confirmation listed the wrong physical location, custodian, and sub-custodian for the petty cash fund. The fund custodian did note the correct information on the confirmation returned to the Clerk's Finance Department. County Petty Cash Policy, Item#8 states "A new Certificate of Request form must be filled out and submitted each time there is a change of the following: Director, custodian, sub-custodian, or physical location.". The Clerk's Finance Department has not received an updated Certificate and Request of Imprest Funds form. Using the Certificate and Request of Imprest Fund Form to update petty cash fund information ensures only authorized custodians and sub-custodians have access to the fund and that all funds are in the authorized location. Recommendations: Training should be provided to the custodian and sub-custodian to make certain each person understands the policies, procedures, and forms governing petty cash funds. In particular, procedures should be implemented to ensure: • Petty cash reimbursement forms are submitted at least quarterly, • Petty cash funds are balanced at least quarterly and the balancing is documented, • Annual confirmations are returned to the Clerk's Finance Department by the designated due date, and • Changes to the petty cash fund are documented on a Certificate and Request of Imprest Fund form and the original provided to the Clerk's Finance Department. itt County Management Response: a. "Tourism staff acknowledges that the Petty Cash fund is to be balanced quarterly, but due to very few if any transactions each year, this procedure was overlooked The Petty Cash Fund Custodian is now aware that the fund must be balanced quarterly in accordance with Petty Cash Policy Item # 11, whether or not there have been transactions in the fund. b. Tourism Department staff acknowledges they did not return the annual report for FY 08, 09 and 10 due to a misunderstanding of this requirement. The lateness of the FY 11 report was due to a delay in interoffice mail delivery. c. Tourism Management will update procedures to require the Custodian to contact the Clerk's Finance Department prior to the end of each fiscal year for the Petty Cash form. d. Tourism Department staff feels that the Petty Cash account is no longer necessary to support our operations. The Tourism staff intends to return the $50 in the fund to Finance after completing and delivering the final report for 2013." 9) Inaccuracies were noted in SAP vendor account information. The Purchasing Department creates a payment account in SAP for each vendor doing business with Collier County. This payment account includes the vendor's mailing address, phone number, tax identification number, and preferred payment method. The Clerk's Accounts Payable Department uses this payment account to determine where to send payments. Os,ORI Vendor payment accounts contained inaccurate contact information A comparison of contact information on vendor invoices to vendor account profiles in the SAP financial system identified the following: 14 13A • Four vendors submitted invoices that did not list a mailing address or phone number. One of these vendors had a W-9 Request for Taxpayer Identification Number and Certification form on file containing the mailing information and contact phone number. Inaccurate contact or account information increases the risk of fraudulent payments. Recommendation: • The Purchasing Department should establish procedures to routinely review and update vendor account contact information and ensure current W-9 forms are on file for vendors. County Management Response: • "Both Purchasing and Accounts Payable staff have access to creating vendor accounts in SAP and both staff groups can make changes/updates to the Vendor Master file for company code 1000. It is therefore recommended, that both offices establish procedures prior to payment. • Purchasing staff implemented a W-9 (and substitute W-9) process for all formal solicitations and contracts during the August 2007 SAP Upgrade. The process of obtaining a W-9 or substitute W-9 continues to be used with any new vendor selected as a result of a formal solicitation/contract awarded by the Board. Further, the Purchasing Department has implemented an on-going updated vendor W-9 process. • When Accounts Payable staff reports payment address discrepancies, the Purchasing Department will communicate with vendors and update addresses using obtained W-9. " Clerk's Accounts Payable Management Response: "Clerk's Accounts Payable staff will continue to validate that the invoicing party and remit-to addresses are accurately reflected in the vendor master. With the advent of the new accounts payable invoice imaging software there is an appropriate built-in workflow that allows the accounts payable staff to notes purchasing of any ( discrepancies between current vendor master name and address to actual invoice name and remit-to address imaged in the system. Vendor master file maintenance will be segregated " Other Recommendations 10) The Monthly Tourist Tax Allocation Spreadsheet should be updated in a timely manner when the Tourist Develo nment Tax rate or allocation )ercentages change. Clerk's Finance staff uses the Monthly Tourist Tax Allocation Spreadsheet to calculate the distribution of TDT revenues to the designated general ledger funds. Effective October 2005 (Fiscal Year 2006),the TDT rate increased from 3%to 4%. In addition,two new general ledger funds were created,which changed the allocation percentages. An inordinate number of adjusting journal entries were posted in January 2006 for the October, November, and December 2005 monthly allocations to correct the revenues distributed to the general ledger funds. The Monthly Tourist Tax Allocation Spreadsheet was not updated until February 2006, resulting in the adjusting entries for the fiscal year. The untimely update of the Monthly Tourist Tax Allocation Spreadsheet may result in the incorrect allocation of tax revenues to the specific general ledger funds and the amount available for tourism activities. Recommendation: • The Clerk's Finance staff should update the Monthly Tourist Tax Allocation Spreadsheet in a timely manner when the TDT rate and/or allocation percentages change. 15 Clerks Finance Management Response: 3 A "The Finance and Accounting Management team understands that revenue allocation changes approved by ordinance are an immediate priority and are routinely booked. Subsequent to the adoption of Ordinance 2005-43, on July 26, 2005, master data updates were made to the financial system in August of 2005 to accommodate the additional 1% tax and its attendant allocation percentage changes. The effective date of Ordinance 2005-43 was September 1, 2005 and as of the effective date all database preparations for the new allocation were in place. However, at the time of the ordinance change adopting the 4th percent there was debate regarding the application of the new 1% to rental contracts let prior to the ordinance change. The Tax Collector's November lump sum distribution,for October receipts, provided a breakout between revenues collected under the 3% ordinance versus the 4% ordinance. Two months lapsed while our Department analyzed the data contained in the Tax Collector's revenue reports. These reports were eventually used as the basis to correct the October through January receipts, in February of 2006. and continued to be used as the basis for postings. All corrections were made within the proper fiscal year, so there was no impact to fiscal year 2006 financial reporting. The Finance and Accounting Department's policy is to change all revenue allocations on a timely basis." 11 ) Invoices should he date stamped, and prumpt1■ processed b■ Tourism De )artment staff. A review of tourism expenditures identified four invoices were not date stamped and initialed by Tourism staff. Without the proper date stamp and approval, it cannot be determined if the invoices were promptly processed. Recommendations: • With the implementation of the Dolphin system, invoices should be sent by vendors directly to the Clerk's Accounts Payable Department. • If the Tourism Department does receive invoices,the department should implement procedures to ensure invoices are date stamped, initialed, and promptly processed. County Management Response: a. "The new Dolphin system directs all vendors to send their invoices directly to the Clerk's Accounts Payable Department. The Tourism Department staff will direct all our contracted vendors to adhere to this new policy. b. Invoices received by the Tourism Department staff directly from a vendor will be date stamped, initialed and promptly processed with the Finance Department for payment. " Conclusion County staff should assess the monetary impact of change orders to determine proper approval and include historical spend data when preparing future RFPs. Before making recommendations to the BCC, selection committees should ensure vendor proposals and contracts are consistent with RFPs. County staff should review expenditures for proper supporting documentation and monitor compliance with Florida Statute, County Ordinance and Resolutions, contract terms, and Policies and Procedures. County staff should consider developing a consistent County-wide process for donations. County officials and County staff should take the necessary precautions to avoid the appearance of any conflict of interest. Ultimately, it is the responsibility of County management to understand and implement the proper controls in order to limit the risk of fraud, error, and misappropriation of county assets. The Clerk's Internal Audit Department may recommend improvements in audit reports, but it is the duty and decision of County management to formulate processes that ensure compliance with Florida Statutes, County Ordinances and Resolutions, Contract Terms, and w County Policies and Procedures. " The cooperation of the Tourism and Purchasing Department staff along with the Clerk's Finance and Accounts Payable staff during this review is greatly appreciated. 16 13A Additional County Management Comments: Tourism Management and Purchasing Management appreciate the time the Internal Audit team dedicated to this audit assignment. The Audit Report indicates some areas for improvement in the Tourism Department operations, implementation will be forthcoming. Additional future actions have also been identified for implementation in conjunction with the Purchasing Department. Additional Clerk's Finance Management Comments: None Additional Clerk's Accounts Payable Management Comments: None • r49" 17 13A January 25, 2010 2. Visitor Information Specialist Jack Wert presented the Executive Summary "Visitor Information Center Specialist"dated January 25,2010 for review. He noted: • It was brought to the attention of the TDC Subcommittee(when considering revisions in Tourist funding,) there is a lack of coordination between the areas Visitors Center. • The Staff person would have a myriad of duties included but not limited to: ensuring the Visitor Centers have consistent publications,coordinating monthly meetings between Chamber Executives, coordinating publications and maps, recruiting volunteers, etc. • The Chamber of Commerce will provide the office space for the employee. • The position is for a I year trial period and requires funding by the TDC in the amount of$64,740. Speaker Michelle Klinowski, Greater Naples Chamber of Commerce reviewed the budget for the position, noting the total expenses per year including payroll,office overhead expenses, etc. is $74,740. The Chamber is donating funds equaling a value of$10,000 making the expense for the Tourist Development Council, $64,740 for the year. Mr. Hendel moved to approve(recommend to the Board of County Commissioners funding the position as outlined by Staff). Second by Ms. Becker. Carried unanimously 8-0. 3. Naples Museum of Art Grant Agreement Amendment Jack Wert presented the Executive Summary"Amendment to Naples Museum of Art, Inc. FY 10 Grant Agreement to change the effective dates"dated January 25, 2010 for review. Mr. Sorey moved to approve(recommend approval to the Board of County Commissioners)the amendment to the Naples Museum of Art,Inc. FY 10 Grant Agreement. Second by Mr. Hendel. Carried unanimously 8-0. 4. Marco Island Museum Funding Jack Wert presented the Executive Summary "Marco Island Museum Funding Discussion"dated January 25, 2010 for review. He noted: • The TDC had previously authorized a Tourist Tax Grant in the amount of $100,000 for the exhibit project at the Museum. • The City of Marco Island has offered a matching grant opportunity up to $350,000 to assist in funding the exhibit project. • Paradise Advertising and Marketing, Inc. has offered to donate up to S 100,000 of the media commissions to increased marketing efforts for the TDC to be due on the additional S l M dollars allocated to marketing from the re-direction of Beach Reserves. The firm's intent is to allow the TDC to re-invest the S 100,000 into marketing efforts. 5 .d.r• ofes 13A _. — January 25, 2010 • The County may be able to allocate up to $150,000 in General Fund Capital Reserves towards the exhibit project. The Council requested clarification on how the$700,000 of funds would be utilized. Marla Ramsey, Director noted it is a one time capital expenditure for exhibits and displays primarily for the "Calussa Room." The funds from the General Fund Capital Reserves are available for use. Discussion occurred on the concept of re-directing Paradise Advertising's donation from marketing to the funding Museum exhibits. It was noted Paradise Advertising could make the donation separately, as they see fit, following the payments by the County for the Media Commissions. Mr. Sorey moved to support the concept for the funding of the Marco Island Museum Exhibit Project and recommend the Board of County Commissioners approve the concept(a $100,000 was previously approved for allocation to the exhibits by the TDC. ;Paradise Advertising's funds belong with them for ;utilization as they see fit, and the $150,000 from the General Fund Capital Reserve is available, however the funds are not in the purview of the TDC.) Second by Mr. Medwedeff. Cedar Hames, Paradise Advertising noted he would rely on the Council's direction regarding the proposed $100,000 donation The Council encouraged Paradise Advertising and Marketing, Inc. to donate the $100,000 in question to the Marco Island Museum Exhibit Project Carried unanimously 8-0. Break: 10:39 am Reconvened: 10:55 am VIII. Staff Report Presentations 1. Section I—Marketing Partners a. Tax Collections—CC Tax Collector Jack Wert presented the "Tourist Tax Collection" data updated through December 2009. b. Klages Research Report Dr. Walter Klages,Research Data Services, Inc.presented "Collier County Tourism Research, December 2009"dated January 25, 2010 to the Council i. Focus Group Research Results Jack Wert presented the "Collier County Tourism Research 2009 Qualitative Research"prepared by Research Data Services, Inc, dated 6 1 3 A .. . i u 0 I 0 f i O m O vi , CV 0 o. I0 JO 0 N 1-1 d = 1D N .c N co E _ 0 U M w O c c 0 -0 o mm N :12 .F. 4 t v 0 d 0O. 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'uo 0 oo C ` i C a,a 8 u u° 73 g , lo- U 1 W m .r . .a I,$ N N 3 A January 25, 2010 MINUTES OF THE COLLIER COUNTY TOURIST DEVELOPMENT COUNCIL MEETING Naples, Florida, January 25, 2010 LET IT BE REMEMBERED, that the Collier County Tourist Development Council in and for the County of Collier, having conducted business herein, met on this date at 9:00 AM in a REGULAR SESSION in Building "F" of the Government Complex,Naples, Florida with the following members present: Chairman: Commissioner Fred Coyle Vice Chairman: Murray H. Hendel Susan Becker Clark Hill Rick Medwedeff Robert Miller Ed (Ski) Olesky John Sorey, III (Via Teleconference) Rob Popoff(Excused) ALSO PRESENT: Jack Wert, Tourism Director Gary McAlpin, Coastal Zone Management Director Colleen Greene, Assistant County Attorney Kelly Green, Tourist Tax Coordinator 1 13A January 25,2010 2. Visitor Information Specialist Jack Wert presented the Executive Summary"Visitor Information Center Specialist"dated January 25,2010 for review. He noted: • It was brought to the attention of the TDC Subcommittee(when considering revisions in Tourist funding,) there is a lack of coordination between the areas Visitors Center. • The Staff person would have a myriad of duties included but not limited to: ensuring the Visitor Centers have consistent publications,coordinating monthly meetings between Chamber Executives,coordinating publications and maps,recruiting volunteers,etc. • The Chamber of Commerce will provide the office space for the employee. • The position is for a 1 year trial period and requires funding by the TDC in the amount of$64,740. Speaker Michelle Klinowski,Greater Naples Chamber of Commerce reviewed the budget for the position,noting the total expenses per year including payroll,office overhead expenses,etc. is$74,740. The Chamber is donating funds equaling a value of$10,000 making the expense for the Tourist Development Council $64,740 for the year. Mr.Hendel moved to approve(recommend to the Board of County Commissioners funding the position as outlined by Staf f). Second by Ms. Becker. Carried unanimously 8-0. 3. Naples Museum of Art Grant Agreement Amendment Jack Wert presented the Executive Summary"Amendment to Naples Museum of Art, Inc. FY 10 Grant Agreement to change the effective dates"dated January 25, 2010 for review. Mr.Sorey moved to approve(recommend approval to the Board of County Commissioners)the amendment to the Naples Museum of Art,Inc. FY10 Grant Agreement Second by Mr.Hendel. Carried unanimously 8-0. 4. Marco Island Museum Funding Jack Wert presented the Executive Summary"Marco Island Museum Funding Discussion"dated January 25,2010 for review. He noted: • The TDC had previously authorized a Tourist Tax Grant in the amount of $100,000 for the exhibit project at the Museum. • The City of Marco Island has offered a matching grant opportunity up to $350,000 to assist in funding the exhibit project. • Paradise Advertising and Marketing, Inc.has offered to donate up to $100,000 of the media commissions to increased marketing efforts for the TDC to be due on the additional$1M dollars allocated to marketing from the re-direction of Beach Reserves. The firm's intent is to allow the TDC to re-invest the$100,000 into marketing efforts. 5 13 ,E January 25,2010 • The County may be able to allocate up to$150,000 in General Fund Capital Reserves towards the exhibit project. The Council requested clarification on how the$700,000 of funds would be utilized. Marla Ramsey,Director noted it is a one time capital expenditure for exhibits and displays primarily for the"Calussa Room." The funds from the General Fund Capital Reserves are available for use. Discussion occurred on the concept of re-directing Paradise Advertising's donation from marketing to the funding Museum exhibits. It was noted Paradise Advertising could make the donation separately, as they see fit, following the payments by the County for the Media Commissions. Mr.Sorey moved to support the concept for the funding of the Marco Island Museum Exhibit Project and recommend the Board of County Commissioners approve the concept(a$100,000 was previously approved for allocation to the exhibits by the TDC. Paradise Advertising's funds belong with them for utilization as they see fit, and the$150,000 from the General Fund Capital Reserve is available,however the funds are not in the purview of the TDC.) Second by Mr. Medwedeff Cedar Hames, Paradise Advertising noted he would rely on the Council's direction regarding the proposed$100,000 donation The Council encouraged Paradise Advertising and Marketing, Inc. to donate the $100,000 in question to the Marco Island Museum Exhibit Project Carried unanimously 8-0. Break: 10:39 am Reconvened: 10:55 am VIII. Staff Report Presentations 1. Section I—Marketing Partners a. Tax Collections—CC Tax Collector Jack Wert presented the"Tourist Tax Collection" data updated through December 2009. b. Kiages Research Report Dr. Waiter Kiages,Research Data Services,Inc.presented "Collier County Tourism Research, December 2009"dated January 25, 2010 to the Council i.Focus Group Research Results Jack Wert presented the "Collier County Tourism Research 2009 Qualitative Research"prepared by Research Data Services,Inc,dated 6 134 Record of Meeting: Discussion w/ Cedar Hames, Paradise Advertising. Purpose To get insight from Cedar Hames, Paradise Advertising & Marketing regarding audit observations related to contract between Collier County and Paradise Advertising noted in Draft Audit Report 2011-2-Tourism Asset, Revenue, & Expenditure Review. Place Gov't Complex; 4th Floor; CK's Office Phone-Telephone Conference Call Date 6/03/13 2:00 pm to 2:45 pm Participants Cedar Hames (CH)—Paradise Advertising & Marketing Jack Wert(JW)—Tourism Director Crystal Kinzel (CK)—Clerk's Finance Director Ronald Dortch (RD)—Clerk's Senior Internal Auditor Megan Gaillard (MG)—Clerk's Senior Internal Auditor Background The Clerk's Internal Audit Department issued a Draft Audit Report to the County Tourism and Purchasing Departments on February 5, 2013. The draft report included audit observations related to the contract between Collier County and Paradise Advertising & Marketing. Internal Audit wanted to review observations with Cedar Hames, President of Paradise Advertising & Marketing. At the request of Internal Audit, JW arranged a conference call on 6/03/13. Discussion CK explained the objectives and scope of the Tourism Audit. CK asked if JW briefly discussed audit observations with CH. CH confirmed JW had discussed the audit findings involving Paradise Advertising with him. CK further elaborated on each audit finding and asked CH to provide additional information and/or background. Observation #1 —Change Orders to Contract CK said change orders were completed each year indicating the budgets being contracted are too low and the higher amount spent each year was the "regular spend." CK asked if CH thought the budgets being indicated were too low. CH responded no because the funds added through change orders were not solicited by CH. CH said he was approached each year to provide additional services, which is standard practice in the industry. CK asked if historical spend figures being included in the county's RFP for advertising and marketing services, indicating the potential for a higher contracted amount, would have changed Paradise Advertising's proposal. CH responded that historical spend figures would not have changed Paradise's proposal. CH commented the dollar value of the contract has increased over the years from a few hundred thousand to the current$2M. JW commented the funding recent increase was the result of the additional 4th percent Tourist Development Tax approved in 2005. CK commented that County Commissioners have expressed concerns that an RFP without historical spend data may result in fewer respondents to the RFP. CK asked about break points used by marketing companies for "marketing tiers." CH said NY agencies would not be interested in a $4 million contract because the amount wouldn't be enough to stir the larger market interest. CH said the amount being contracted or historically spent was less than the large market tier. 134 CK asked CH if, in his opinion, a higher contract amount (i.e. $4M instead of $2M) would attract more (and larger) advertising agencies from larger markets (i.e. New York). CH responded"probably not". CH commented Commissioners and other county employees would be "shocked" at the rates charged by the "New York" agencies and no NY agency would be willing to open an office in Naples, as required by the County's RFP. CH further commented with higher base service rates the County would receive less in services, even though the contract was for a larger amount and employees would be less dedicated to the project/market area. CH reiterated his staff has experience working at larger advertising agencies. CH reiterated the County would not be able to obtain a larger firm. Observation #5— Donation by Paradise Advertising CK asked CH to "walk through" his recollection of the $100,000 donation from Paradise to Collier County in 2010. CH recollection is as follows: - CH had discussed a change order with JW for additional advertising campaigns under the contract. - CH had lunch with JW and CH suggested a reduction from the contracted commission rate of 15% to 10%. - JW informed TDC of Paradise Advertising's offer. TDC suggested a donation to County agency/projects. - CH said prior to committing to a donation he wanted to check with his CPA to make sure the"gift" could be a tax write-off for Paradise. - CH said the TDC recommended a donation to Marco Island Museum equal to the 5% reduction in the commission rate ($100,000), but made it clear to CH it was his choice. - CH spoke to Commissioner Coyle, immediately after the TDC meeting. CH said he told Commissioner Coyle his preference was to donate to the Marco Island Museum and the Freedom Memorial monument. CH said he made it known to Commissioner Coyle that he felt strongly in making equal donations, to the Collier County Museum and the Freedom Memorial, because both projects held merit and were of significant value to him. CK asked CH if his original intent was to reduce the commission rate to provide a cost savings to Collier County. CH responded yes, but he did what the County advised (i.e. TDC's recommendation to make a donation instead of lowering the commission rate). Observation #6—Potential Code of Ethics Violation CK asked CH if he remembered having dinner with Commissioner Coletta on July 25, 2011. CH said he reviewed his calendar and confirmed he had dinner with Commissioner Coletta, his wife, and daughter at Commissioner Coletta's personal residence on July 25, 2011, the night before the BCC meeting. CH commented he was unaware there was an issue with him having dinner with a Commissioner. CK asked if any business regarding Paradise Advertising and Collier County were discussed during the dinner meeting. CH commented "nothing that he can recall". CH said Commissioner Coletta said he liked to get to know business acquaintances and vendors better then invited him to dinner at his personal residence since CH was in town for the next day's BCC meeting. IA CK explained to CH this dinner meeting appears to be a possible conflict of interest since the BCC considered and voted on an agenda item regarding Paradise Advertising's contract with Collier County. CH acknowledged the appearance of a conflict of interest, but assured CK no business was discussed at dinner. CK asked CH who he usually works with regarding Collier County business. CH responded he works with JW. CH commented that he has fostered relationships with Commissioners in other Counties for which Paradise Advertising does work, but is not a lobbyist and has no desire to be a lobbyist. CH said he has personal relationships with many past clients such as appointed officials from St. Petersburg and Pinellas County. CH said having personal relationships with the Boards allowed him to assist with Airport marketing even though the Airports were outside the contract's scope of work. CH said he has always maintained relationships with officials because he is interested in politics. CH said the hoteliers pushed for the additional projects and change orders, not Paradise. Observation#4— Use of Miles Media CK asked CH about Paradise Advertising's use of Miles Media for media/website services. CH said Paradise uses a number of vendors for campaigns/projects. JW clarified the services being referenced were web hosting. CH responded Paradise uses Miles Media, as a vendor, for different services not typically provided by Paradise. CH said the amount paid to Miles Media was nominal and was unaware Miles Media was a vendor for the County. CH commented he considers Miles Media to be a friendly rival. CK explained Miles Media billed for web hosting services for the County's film commission website under Paradise Advertising's Contract. However, Collier County has a separate contract with Miles Media to provide the web hosting services at a lower rate. CK explained the County paid a higher rate for web hosting services and the additional expense under Paradise's contract would count towards the $2M cap and may result in additional commissions to Paradise. CH said the amount most likely wasn't for more than a few thousand dollars. RD commented the invoice was for $2,100. CH said he would have only received approximately $315 for the commission; then he turned around and donated $100,000 to the County so it should be a "wash" and considered a comparable exchange. JW commented the services provided by Miles Media billed under Paradise's contract were for building/developing the website not web hosting/maintenance (as is Miles Media's contract with the County). CK explained services should be obtained in the cheapest and best method for the County to save commission fee through separate contracts. CH commented that Paradise obtained 3 bids for the website development and selected Miles Media based on the lowest price. CH offered to provide Clerk's Internal Audit with copies of the 3 bids obtained for website development. CK said receiving quotes would show due diligence and requested copies of the quotes. CH said he should be able to provide them and will look for the records. CK addressed CH's characterization of Miles Media as "Vendor" and discussed the difference between a vendor and a sub-contractor. 134 CK remarked Clerk's Internal Audit viewed Miles Media as a sub-contractor under Paradise Advertising's contract. CH said the use of Miles Media was as a vendor, not a subcontractor. JW said the definitions for vendors versus subcontractors needs to be clearly spelled out in future contracts. JW said website design is different than website coding, so the need for another vendor may be necessary for marketing projects. CH stated a sub-contractor completes a service under the Scope of Work. CK reiterated the County should have contracted Miles Media's services under the existing contract rather than under the Paradise contract. MG mentioned the Miles Media's contract had a lower rate than the rates billed to Paradise. JW acknowledged the contract with Miles Media was at a lower rate. JW said the fees may have needed to be put out for bid which could have ended up costing more than the cost under the method used. Summary CH said he would look for the three quotes obtained for website development to Clerk's Internal Audit and provide copies of the quotes. CH said he would like to do whatever is in the best interest of the County. Note: After the meeting, Internal Audit determined the additional insight provided by CH regarding the Paradise Advertising & Marketing contract, donations made by Paradise, and the dinner meeting with Commissioner Coletta does not warrant revision of the draft audit report. Additional information has been documented in the audit work-papers. Bcc irt.e.Rm7 13A January 26, 2010 Oh, by the way, I do not live -- I'm not a neighbor of the chairman. I just wanted to let everybody know that. COMMISSIONER COLETTA: There's property next door to him, if you'd like to move to him. MR. BAVIELLO: No, thank you. I like the location where I live. CHAIRMAN COYLE: Thank you very much. MR. BAVIELLO: Okay. Thank you. CHAIRMAN COYLE: Okay. We're going to take a ten-minute break. Let's be back here by 10:45. We'll take an 11-minute break. (A brief recess was had.) CHAIRMAN COYLE: Okay. We're back in session. MR. OCHS: Commissioner, you have a live mike. Item #10A RECOMMENDATION TO CONSIDER COST ESTIMATES FOR CONSTRUCTING PERMANENT HISTORICAL EXHIBITS AND DISPLAYS FOR THE MARCO ISLAND HISTORICAL MUSEUM - MOTION FOR THE COUNTY TO ALLOCATE $250,000 NEW MONIES TO THE MARCO ISLAND HISTORICAL SOCIETY — DENIED; MOTION ALLOCATING $200,000 PLUS THE DISPLAY CASES (APPROXIMATE VALUE $80,000) PLUS BUDGET AMENDMENT TO DRAW UPON THE RESERVES (ALREADY ALLOCATED TDC FUNDS OF $100,000 PLUS PARADISE ADVERTISING $50,000) -- APPROVED MR. OCHS: Sir, we have a time certain at 10:45. It's 10A on your agenda. CHAIRMAN COYLE: Yes. MR. OCHS: It's the recommendation to consider cost estimates for constructing permanent historical exhibits and displays for the Page 47 134 & January 26, 2010 C Marco Island Historical Museum. Ron Jamro, your museum director, will present or answer questions, whatever the board prefers at this point. CHAIRMAN COYLE: Ron, if you could make a brief summary presentation. MR. JAMRO: Certainly. CHAIRMAN COYLE: Most of the information is in our packet, but if you will proceed. MR. JAMRO: Absolutely, Commissioner. And good morning. Ron Jamro, your museum director. In -- this is a process that's been going on for about a year and a half now designing and planning the final direction of the exhibits for the Marco Museum. And to that end, in December you heard from the Marco Island Historical Society who presented the highlights of that exhibit concept, which is in your, you know, information, the various sketches, what have you. Essentially, we break it -- we're breaking things down into five galleries, a special exhibit or traveling exhibit gallery. That keeps the museum fresh, you know, bring in repeat visitors, so it's always good to have an area for that. Two galleries devoted to the Calusa culture, which are the big-ticket items and is really the showpiece of the museum. That was always the plan that the Calusa Indians would be discussed in detail because, after all, they were the first people -- first human beings on Marco Island, and we felt that that's where the story should be told and told well, so that's the emphasis there and the bigger-dollar figures. Then on to the pioneer, the early industry gallery, and finally Deltona and the modern Marco gallery, and you see associated with those all the various costs, and this is all planning -- we're planning to move in this direction of a design/build approach so that you can basically start and stop anywhere, and we would not have an empty museum. It would fill in with temporary exhibits around the edges. Page 48 13A ' January 26, 2010 ' So it's very much a work in progress, and that's not unusual. A museum -- all of our museums, all four of the museums, have proceeded along those line where we never open the doors with a completed museum. It's -- we never had the money and frankly, it's not a smart idea, because we like to see what people respond to and then fine tune the exhibits as we go. So I think this is a very -- a logical plan. The prices look pretty fair. We have value engineered those. Some have gone down, some have gone up, but what we haven't compromised is the final presentation and the exhibit quality that is -- that's top-notch, as befitting a brand new facility on Marco. We're -- we have our budget expert here; we have our design expert here from Tampa. If there's anything I can answer or have those folks answer for you, we'll be happy to do it, Commissioner. CHAIRMAN COYLE: Okay. Thank you very much. Commissioner Henning? COMMISSIONER HENNING: Ron, what was the cost for the display cases in the Depot museum? MR. JAMRO: Oh, thinking back. Excuse me one second. Do you recall, Scott? They're not much. I'm going to guess that we spent probably -- oh, no. It's not a guess at all. It's about a million dollars, about 1.1 million. We're still building them, so that's -- that's not a solid figure, but that's the estimate that we put on it. It's hard, because restoration was also part of that process, so in my mind I'm trying to figure out where we were on that. But we had 450,000 for the first -- front end of the building and like 550-, call it 600,000, for the back end of the building. That's what we're working on now. COMMISSIONER HENNING: That was for restoration. That wasn't -- MR. JAMRO: No, no, no. No, sir. That was exhibit design and fabrication. The restoration will -- is going to cost us about another Page 49 January 26, 2010 1 3 A million. COMMISSIONER HENNING: Okay. MR. JAMRO: Or has cost us another million. We're almost done now. COMMISSIONER HENNING: And the funding source for this item? MR. JAMRO: That was a variety of monies, basically TDC revenues, but we hit -- there were a couple of gifts from the Board of County Commissioners. It was -- maybe Leo can recall how that went. MR. OCHS: Yes, sir. There was some fundings out of your 301 capital fund to help with some of the exhibits at the Depot when we had funding available. As you-all know from our recent discussions, your 301 capital fund has basically become a debt service fund where we're servicing not only the long-term debt on your nonimpact fee general fund capital projects but also using some of that funding to cover the shortfall in your impact fee debt obligations because of the recent shortfall in impact fees. So there are some loans from that 301 fund as a temporary bridge to cover the shortage in impact fees. So there are no capital dollars, Commissioner, available this year in that 301 fund. COMMISSIONER HENNING: We don't have a breakdown of where the million dollars -- or the funding request for this item. That's not in our agenda. Did I miss it? MR. OCHS: No, sir. And the staff is not recommending a million-dollar budget allocation in the current year to fund the entire $1 million estimate of the permitted exhibits that would fill up the entire Marco Island Museum. You recall a couple of months ago the staff brought an item. We had some capital project funds that had some surplus funding. We identified about $440,000 of potential funding. Subsequent to that we had a discussion with the board. Those dollars, along with some Page 50 13A January 26, 2010 others, went back into capital funding reserves to be available for beginning balance in 2011, so those funds have since been placed in capital project reserve funds. Now, recently the City of Marco Island was gracious enough to offer up to $350,000 in matching funds if the board was able to put some money against that match. And in that regard, sir, we -- there's $100,000 that was awarded earlier in the year by your Tourist Development Council and subsequently approved and ratified by that board to go to the Marco Island Historical Society to help fund exhibits. Yesterday at your TDC meeting I believe Mr. Cedar Hames from Paradise Advertising, who is under contract to the board for some advertising and marketing services with your CVB, had indicated that he is, under contract, eligible for some commissions related to advertising placements that he's making, and he indicated a willingness to return some of that to the museum project; and the TDC told him that, you know, once he received his commissions, it was up to him what he wanted to do with them. But we've had a representation from him that he would be willing to put up to, I believe, $50,000. And Commissioner Coyle, I'm going to ask for some help. He chaired the meeting yesterday. I believe it was $50,000, sir? CHAIRMAN COYLE: Yeah. Mr. Hames said he would be willing to donate $50,000 in cash to the Marco Island Museum and, also, he would be willing to allocate another $50,000 in advertising services and consulting fees over the next year or so, maybe two years. It will depend upon your need. But he has been very, very helpful in similar projects in Collier County, and that is money, I think, that you could very, very easily use. And I think there are ways -- and Commissioner Fiala really wants to speak on this. She's been the person who's been representing the museum for a long time, and she's been fighting to get the funding, Page 51 13A January 26, 2010 and we're trying to find a way to do that. But I'll leave the rest of that discussion to her. But the issue with Mr. Cedar Hames and Paradise Advertising is pretty much done, as I understand it, and I would only urge the Historical Museum to give him some recognition down there, a plaque of some kind for him and his company, because that's a -- it's unusual to find a contractor who says, I don't want any more commissions. I'll give them back to somebody in the county. Isn't that nice? Commissioner Fiala? COMMISSIONER FIALA: Thank you. He does deserve a gold star for that. I thank you very much. And I think that -- now, we're talking new money, new money. City of Marco Island has voted to generously give to Marco Island Museum $350,000 if we match that with new money. And I don't mean to put anybody else down, but I don't know any other city that has ever donated to one of our museums like that, and all they're asking in return is this. I believe that this is the right thing to do. Now we've got 50,000 from Cedar Hames. All we need to come up with is 300,000, and we can do the job right. And I don't ever remember voting on all of these display cabinets for the Depot, by the way. It's wonderful that we're doing that. We want them to look nice, but I sure don't remember voting on that. This is the only time I remember voting on display cabinets. MR. JAMRO: Never per -- that level of detail was never requested. COMMISSIONER FIALA: Right. MR. JAMRO: Be happy to provide it anytime. COMMISSIONER FIALA: That's exactly right. And so I would -- I would ask and urge my fellow commissioners to approve the extra $300,000 so that then we can receive the $350,000 match from the City of Marco Island. Has the City of Naples volunteered to donate to the display cabinets over at the Page 52 134 January 26, 2010 Depot? MR. JAMRO: As a matter of fact, they have purchased -- oh, no. I'm getting -- yeah, at the Depot. Too many museums. COMMISSIONER FIALA: Yes, right, right. MR. JAMRO: Yes, the city has provided, I think it was $17,000 to -- and they bought -- or they bought one old vehicle for one display and they're in the process of buying another vehicle. COMMISSIONER FIALA: But they keep the ownership of that museum, don't they? CHAIRMAN COYLE: Not the city. COMMISSIONER FIALA: Yes. CHAIRMAN COYLE: No, no. It's owned by a foundation. COMMISSIONER FIALA: Well, still, but it isn't ours. It isn't ours to own -- MR. JAMRO: Well, it's ours for 99 years. COMMISSIONER FIALA: -- whereas this Marco Museum will be. So it's an investment in our museum system. And I ask you fellow commissioners to come up with $350,000. Possibly $50,000 coming from Cedar Hames. Thank you. CHAIRMAN COYLE: Commissioner Halas? COMMISSIONER HALAS: Could someone refresh my memory? The TDC is coming up with some money. How much money is the TDC coming up with? MR. OCHS: Commissioner, I'll take a stab at that. Two different TDC actions. Earlier in the year, as part of your regular grant application and award process, the TDC had recommended a $100,000 grant to your non-museum category grant awards to the Marco Island Historical Society. Those grant award recommendations, as they routinely are, were brought back to the board. It was approved by the board. That was earmarked to the society for exhibits and displays for the new museum. Page 53 13A January 26, 2010 COMMISSIONER HALAS: Down there in Marco? MR. OCHS: Yes, sir. COMMISSIONER HALAS: And that's $100,000; is that correct? MR. OCHS: That's $100,000. And then just yesterday, as Commissioner Coyle just pointed out, there was another pledge of $50,000. So if you're trying to leverage the $350,000 matching offer from Marco, Marco Island, you would -- in that scenario, if they would consider both of those as eligible to count against their match offer, you would need another $200,000 out of your capital reserve fund. COMMISSIONER HALAS: Okay. Now, the other question I have is -- and I'm just trying to think outside the box here on what options we have. Obviously all of us know that we have a tremendous shortfall, but I'd like to see this museum move forward. So one of the -- one of the ideas -- and I would need to find out if this would be feasible or not -- is to turn the property that the museum sits on, give -- turn it over to Marco, and basically that would be Marco Island's museum, and it would be owned by Marco Island. The only thing that I think that might be a problem would be, we'd have to share some parking facilities down there with another government identity (sic), and that way we would be -- that would be a large donation. I know it's probably not what really gets accomplished here as far as the display cases, but at least it gives us the ability to show that we're trying to support this and just turn over the museum -- over to the -- to Marco Island, and it would be their museum and they could do whatever they want. CHAIRMAN COYLE: Commissioner Fiala? COMMISSIONER FIALA: Yes. That's very kind of you. We're talking about new money. Marco is -- their city council has voted to pledge $350,000 toward this museum. By the way, they already pledged another 100,000 that they've already given them. Page 54 • 13A January 26, 2010 C That was beforehand. So they've now -- that will be $450,000 that the Marco City Council has pledged, or actually they gave the $100,000 to them already. So they've asked for $350,000, new money from us. We've already pledged $100,000. But -- so that's set aside. And I'm asking you, and I'd like to make the motion right here and now, to donate $350,000 to receive the Marco Island City Council's match of $350,000 to be placed toward building the display cabinets at the new Marco Island Historical Society Museum. COMMISSIONER HENNING: I'll second that if it includes recognizing of the $100,000 TDC funds and the $50,000 from Paradise Advertising. COMMISSIONER FIALA: You mean into that 350? COMMISSIONER HENNING: Yeah. COMMISSIONER FIALA: Well, then it isn't new money anymore, and then we're going to lose $100,000 from the Marco City ( Council. They're asking 350- to 350-. They already pledged 100. We've already pledged 100. So this is over and above that. What will happen is, then we lose, we lose. And it's for our own museum. It's for our own museum. And you know what, as long as we're talking about this, I think it's the right thing to do, but maybe we ought to be discussing the display cabinets at the Depot then too and haggling that one out. You know, I mean, I just -- I just don't feel it's right to do this. We found the money, we're going to start to open this museum. I'm asking for 350,000. Fifty of it is already dedicated from Cedar Hames. That's 300,000. I found that 300,000 within our budget that was sitting there, and I'm asking you to -- to donate that, to use it for displays. COMMISSIONER HENNING: Can we go to the speakers? CHAIRMAN COYLE: Commissioner Coletta? COMMISSIONER COLETTA: Yeah, thank you. Commissioner Fiala, I know this is extremely important to you. Page 55 13A January 26, 2010 COMMISSIONER FIALA: Yes, it is. COMMISSIONER COLETTA: And I was one of the original supporters of the museum. My concern is -- and I'll be honest with you. In this case here I think Commissioner Henning is closer to it than we need to be, but possibly we could discuss this a little bit further. Now, I heard a very good suggestion from Commissioner Halas. I received the same letter where a resident of Marco Island suggested that we look into the possibility -- and I don't know if there's any interest on that. But we turned over, what was is, Mackle Park at one time to the City of Marco so that they would have complete control; because let's be honest about it, the smallest form of government is usually our best form of government. I would be for coming up with the money allotment to get this going, but I'd like to see if there's any interest on the part of the Marco City Council to assume control of the museum so they have it within fir. .. their control and they don't have to come through our museum board, they don't have to come through this commission. They'd be able to act directly, and they'd also be able to go forward and get grants from the TDC in future years. Why not? They've recognized museums that aren't county museums. There's a lot that can be done with this to make it work. I'll make a bet with you that the money they -- if they had control of it, complete control, they could make the dollars go a lot farther, rather than have to work through three or four of the sources to get to where they need to be. There is -- there is concerns. I'll tell you one of them is, in fact, how many capital projects, Mr. -- County Manager? MR. OCHS: Yes, sir. COMMISSIONER COLETTA: How many capital projects have we deferred or completely eliminated? Of course, some of the funds for this is the demise of the gardens down at the agricultural center. Page 56 134 January 26, 2010 They're going away to be part of the funds that are going to be able to back everything up. But what are we now in the rear on? MR. OCHS: Well, Commissioner, two meetings ago we brought an analysis of your capital project funds, and what we did was we scrubbed all of those individual project accounts to find any dollars that weren't yet expended. That doesn't mean that the project necessarily wasn't finished. It might have been money that was still left in the project after it was finished. There were some projects there that never began and we didn't have any intention anymore to begin those like the project you just mentioned. So we took about $3-and-a-half million that we recommended the board take out of those active accounts and put them into the capital project reserve funds. So in terms of specific projects that were deferred, we have the one out at the ag. center that you mentioned. COMMISSIONER COLETTA: Well, yeah. There's a lot more things out there that we have deferred over the last year or so, and I asked you to put me a list together, and obviously you didn't. MR. OCHS: Well, some of those are road projects, sir, that are funded by other sources. COMMISSIONER COLETTA: Well, I know that. But I mean, everything in total. In other words, trying to capture one end of the fund spectrum as an entity by itself sometimes can be a little bit misleading. And I want you to know I am supporting funding for the Marco Island Museum. I just want to make sure we put everything in the proper perspective. You don't have a list? MR. OCHS: Not a complete list, no, sir. COMMISSIONER COLETTA: Okay, thank you. CHAIRMAN COYLE: Yeah. Let me make a brief comment concerning this. I think Commissioner Fiala is absolutely correct in a number of respects; one is the amount of money that we continue to Page 57 13A January 26, 2010 put into the Naples Depot. I think the renovation budget has just gotten out of hand, and it's not all your fault. It's largely because of some fire code requirements down there that have required things. But had we taken a closer look at that along the process, we might have decided -- made different decisions. And I think it was a mistake not to have brought that detail to the Board of County Commissioners. And it's for that reason that it's necessary that we look at this issue before us now, because our funds are even tighter. The staff is recommending that we go with roughly a $700,000 initial step. I don't see any reason that we cannot do this. And the only -- only area where I disagree with Commissioner Fiala is we can't limit our vision to just new funds, because there are funds already there. What are you going to do with them if you don't use them for this purpose? So I think it's absolutely essential that we use the $100,000 from the TDC and the $50,000 from Paradise Advertising, and I would (n. gladly support a $200,000 allocation from capital reserves to round out a $350,000 match to Marco. So I would be -- and I feel that some of the other commissioners would feel the same way. So if we can do that and get the project started, then we qualify for an additional $100,000 from TDC for the next cycle. We have almost $80,000 of existing furniture and display cases that we will give to Marco Island. So we're talking about an immediate allocation of well over $780,000, and that's enough to complete the Calusa exhibit, according to your estimates so far, right? So that's a really good step with an initial allocation. Now, the other suggestion that Commissioner Halas has brought forth is one that is worthy of consideration. If Mr. Popoff could address that, that would be very helpful. Is it of interest to the Marco Council to take over control of the museum? MR. POPOFF: Chairman and Commissioners, how do you do today? Appreciate you discussing this topic. I understand the Page 58 13A January 26, 2010 `` budgetary constraints and the challenges that you face. I can't speak for council or -- well, first off I'd like to introduce Councilman Wayne Waldack and our city manager, Steve Thompson, and Craig Woodward from the Historical Society. We're really not in the business of running a museum, and -- nor do we have the background or knowledge or staff to do so. I do appreciate sincerely the direction that this is taking because it's somewhat of a compromise and it's at least getting us to where we need to be to have the capital to do the display cases. I'm not on the TDC. And during the TDC meeting, we initially were going for $250,000 -- actually it started at 500,000. Commissioner Fiala, you were there, I believe, at that time, and we got down to -- or, no, it was Chairman Henning. Mr. Henning was chair of the TDC at that time. And we got down to 250,000. We ended up with $100,000. And I know that the Historical Society has already counted on (.. that money. And lookit, we're not looking a gift horse in the face here. We would gladly accept the compromise. If we were to do that though, I would appreciate if the commission could go ahead and vote on that so I'd have something to take back to the Marco council. But as far as the land goes, Chairman -- or Commissioner Halas, it's a good idea. I like thinking out of box, but that doesn't really do anything to satisfy our immediate needs of the display cases. CHAIRMAN COYLE: Okay. And just for clarification -- and it's probably one of the reasons that we've had a misunderstanding about obligations, financial obligations. These are not display cases we're talking about. They are far more complex than display cases. MR. POPOFF: Yes, sir. CHAIRMAN COYLE: These are depictions of a Calusa Indian village in the various scenes and re-creations of the village, and that's the reason that it's so expensive, and that's the reason that when we have people from our museum department coming up and talking to us Page 59 13A January 26, 2010 - about display cases, we're thinking about little glass things sitting on the side to put antiquities in. And that leads to a misunderstanding when somebody says, well, we need one-and-a-half million dollars for display cases. MR. POPOFF: Right. CHAIRMAN COYLE: So it --just so that the audience and the public understand what we're talking about here, it's more complex than display cases. But I'm anxious, and I know Commissioner Fiala's anxious, to see this move ahead. MR. POPOFF: We're all anxious. CHAIRMAN COYLE: And before I think any of us want to make a final decision or a motion on this, I think we should listen to the two registered speakers. MR. POPOFF: I appreciate that, but I did want to add just one additional thing. I understand you guys know this, but you know, the Calusas were the original Collier County residents. CHAIRMAN COYLE: Yeah. MR. POPOFF: And, you know, the citizens of Marco Island have recognized that with donations of$4.5 million. So we all do want to put this behind us and open up the doors, and we really do appreciate your consideration. CHAIRMAN COYLE: Good. Thank you very much, Councilman. Commissioner Fiala, would you like to speak now or after the -- COMMISSIONER FIALA: I can. CHAIRMAN COYLE: Okay. COMMISSIONER FIALA: One of the comments, I think it's very nice that the -- our museum system has these left-over cases that they want to use. I think that they ought to use it over at the Depot and take the $100,000 from the Depot cases and put them over into the Marco because, as Commissioner Coyle beautifully pointed out, this is Page 60 IAA January 26, 2010 C not for display cases so much as for depicting these scenes. By the way, I just --just a little tidbit -- and I thank -- I thank some of the commissioners here who have been trying to help me. I appreciate that. One of the things that's really neat --just this, as a sidenote. They're building a special place in this museum that is totally waterproof and air-conditioned properly so that they can, at some point in time, bring artifacts back from the Smithsonian Institute to display here. It will be the only place in Collier County that will be a museum -- Smithsonian museum quality. So I just wanted to throw that in there. CHAIRMAN COYLE: Now, let's call the -- MS. FILSON: And, Mr. Chairman, I currently have three speakers now, but Mr. Popoff was one of them. I don't know if he wishes to speak. CHAIRMAN COYLE: Okay. If he wants to speak again -- because I called on him the first time. MS. FILSON: Okay. The first speaker is Jacob Winge. He'll be followed by Patricia Marzula. COMMISSIONER HENNING: Winge. MR. WINGE: County Commissioners, my name is Jacob Winge. County Commissioners, my name is Jacob Winge. I'm founder and president of Barron Collier High School's History Club. I also came to speak on another issue concerning the museum back in, I believe it was, October. Basically what I wanted to say was that history, again, is our most important aspect, and it's one of the community's most important aspects, and I think it's something really that we need to have for the community to have access to that, and exhibits are one of the main ways that they can experience that kind of history, and I think it's a great way to show it to them as well. Thank you. CHAIRMAN COYLE: Thank you. Page 61 3 January 26, 2010 1r4 MS. FILSON: The next speaker is Patricia Marzula. She'll be followed by Rob Popoff. MS. MARZULA: Hello. My name is Patricia Marzula, and I live at 941 South Collier Boulevard, Marco Island. As a resident of Marco Island and a resident of Collier County, I would -- I'm -- it's -- I'm glad that people may come together and this will come to a good end. And thank you very, very much for all of your consideration. CHAIRMAN COYLE: Thank you. MS. FILSON: Rob Popoff. MR. POPOFF: (Waves hand.) MS. FILSON: That's your final speaker. CHAIRMAN COYLE: Okay, thank you. Okay. Now is there a motion of how we should proceed? COMMISSIONER FIALA: Yes. I would like to make a motion, as I said, to dedicate $350,000 of new money to the Marco Island C. Historical Museum. We can take $100,000 out of the Depot, $50,000 out of-- that so kindly was given to us by Cedar Hames, and then another $200,000 from -- I think we have 150- from the Extension Service, and I don't know where the other 50- is, but someplace in the public utilities department -- or public services department. CHAIRMAN COYLE: Okay. Commissioner Coletta? COMMISSIONER COLETTA: Yeah, I'm going to second Commissioner Fiala's motion for discussion purposes. Question on the Depot. We -- you or someone mentioned something about $100,000. Is this money that's in some sort of reserves? COMMISSIONER FIALA: No. Actually what it is is we have all of these display cases left that they were going to donate to the Marco Museum, and I'm saying instead, because they have a million dollars set aside for display cases at the Depot, I'm saying -- yes, right? Page 62 13A January 26, 2010 MR. JAMRO: Not exactly Commissioner. First of all, the surplus exhibit cases that would be going to Marco on a temporary basis were the temporary exhibits at the Depot and some from Everglades City, and some from the museum. But most of them are from the Depot, so that's the transition. Secondly, we're in the final stage of completing the exhibits and fabricating the exhibits at the Depot, so we would have to stop work now, and I'm not sure we could find 100,000 at this late stage of the game. So you'd basically wind up with two unfinished museums. I'm not sure that's the way you want to go or what -- COMMISSIONER COLETTA: I think Commissioner Fiala said 50,000, but -- COMMISSIONER FIALA: No. I said 100- because they're talking about display cabinets that were at the Depot that they're now giving to Marco, but then they have to build new -- they have to have new ones for $100,000. And I'm saying, keep the ones that you have and gift the $100,000 to Marco to build their -- their -- what is that called, the display? MS. RAMSEY: Diorama. COMMISSIONER FIALA: Diorama. MR. JAMRO: Well, it's sort of a vignette. COMMISSIONER FIALA: Yeah, okay. Okay, because that -- you know, that isn't display cases. It's a totally different beast really. MR. JAMRO: May I suggest that rather than stop work at the Depot when we're about two months away from completing the exhibits, that we build a sampling of that vignette and that we add to it next year, because we won't have the Depot as an extra cost to the museum. And if TDC revenues hold at all for us, you know, we can send some relief over there. That's how we would eventually make up the difference,just chipping away at it. Like at Robert's Ranch, that was 16 years to acquire, and we funded over eight years. We're paying for it -- this is the last year, Page 63 413A 8cc ilfrpt f unu'5 December 14, 2010 Thank you. uN CHAIRMAN COYLE: Thank you very much, Dan. (Applause.) Item #5B PRESENTATION OF THE ADVISORY COMMITTEE OUTSTANDING MEMBER OF THE MONTH TO MAURICE GUTIERREZ FOR HIS CONTRIBUTION TO THE BAYSHORE BEAUTIFICATION MSTU—PRESENTED MR. OCHS: Commissioners, 5B is a presentation of the Advisory Committee Outstanding Member of the Month to Maurice Gutierrez for his contribution to the Bayshore Beautification MSTU. Please come forward. (Applause.) CHAIRMAN COYLE: Thank you. MR. GUTIERREZ: If I may, Commissioners,just a quick thank you for all the support we get from the commissioners in our behalf of Bayshore and MSTU to bring Bayshore back into the reality of a really nice place to live. Thank you. CHAIRMAN COYLE: Thank you for all the good work you do. (Applause.) Item #5C PRESENTATION BY PARADISE ADVERTISING AND MARKETING, INC., TO THE FREEDOM MEMORIAL FUND — PRESENTED MR. OCHS: Commissioners, Item 5C is a presentation by Page 30 13A December 14, 2010 Paradise Advertising and Marketing, Incorporated, to the Freedom Memorial Fund. CHAIRMAN COYLE: If you'd allow me just to make a quick comment about this. Paradise Advertising has voluntarily contributed a substantial sum of$50,000 to help us in the completion of the Freedom Memorial, which you will recall is being built through private funds at Freedom Park in honor of those killed in the terrorist attacks of 9/11 and for all of the members of our armed forces who have made significant sacrifices to preserve our freedom. We are greatly indebted to Cedar Haines and his staff at Paradise Advertising, and they haven't stopped there. They're also providing a contribution to the Marco Island Historical Society at some appropriate time in the future to commemorate that significant achievement by the people of Marco Island. So Cedar, I invite you to come up and give me some money. How about the members of the committee? Thank you very much. (Applause.) COMMISSIONER FIALA: What does the sign say? COMII4IISSIONER HENNING: It says 50,000. COMMISSIONER FIALA: Oh, is that what it says? We never get to see. COMNIISSIONER COLETTA: One of the things I think that's very important -- I mean, Commissioner Coyle is being very generous recognizing everybody's efforts in this. But let's be honest about it, if it wasn't for Commissioner Coyle, this project never would be where it is today. Thank you very much, Commissioner Coyle, for bringing it to the point -- CHAIRMAN COYLE: Thank you. (Applause.) CHAIRMAN COYLE: Jerry Sanford is chairman of our mow: Page 31 3A December 14, 2010 . Freedom Memorial Task Force and has been responsible for a lot of the hard work that got us to this point in time. So Jerry, please tell us about this. (Applause.) MR. SANFORD: Thank you, Commissioner. On behalf of the members of the Freedom Memorial Task Force and the citizens of Collier County, I'd like to thank Mr. Cedar Hames for his generous donation to our project. The seed was planted in 2004 to construct a lasting memorial here in Collier County. And once completed, the Freedom Memorial will serve as a tribute to the spirit and character of every American who has helped preserve our nation's freedom and remember all those who were lost on September 11, 2001. It will also serve as an important reminder of the sacrifices being made every single day by the men and women on the front lines around the world and here at home who are protecting us during this • time of peril. It will become a gathering place not only for local residents, but also for visitors who will pause and remember and pay tribute to the enduring spirit of freedom. Never forget September 11, 2001. Thank you very much. CHAIRMAN COYLE: Thank you, Jerry. MR. OCHS: Cedar? MR. HAMES: There's not much I could add to that other than to say we're very proud to be here and present this to an incredible organization. And we've donated -- in the past we've been able to donate manpower, but it's a real pleasure to be able to contribute this. Thank you. CHAIRMAN COYLE: Thank you very much. Your gift is greatly appreciated. Thank you. Item #5D Page 32 'e 13 A ' ' 2/04/2011 FRI 15:10 FAI 727 822 3722 Paradise 1OD @001/001 fM . Paradise Advertising&marketing Mr.Jeff Lytle,Editorial Page Editor Naples Daily News In response to the opinion column dated January 28,2011 by Commissioner Idler outlining her concerns regarding donations to the County,T would like to offer some additional thoughts that I feel are relevant. I am pleased that the County Commission unanimously approved our new contract at last week's meeting and Paradise thanks all of the Commissioners for recognizing the value of the work we perform for Collier County. When the County Commission approved the use of an additional S1 million n In Beth Renourishmeat Reserves and$1 million from Tourist Development Council(TDC)Emergency Advertising Funds for destination marketing„Paradise made the o to reduce our commissions from 15%to 10%on the additional f „; which equaled S 100,000. We fe that those funds should to back to the County,especially In these difficult economic times. At the January 25.2010 TDC meeting,the Council discussed the sibility thm the$100000 could be usd by itortCounty organizations,specifically the Marco Island Museum exhib�project.The Council,members made it very clear that the use of those funds was strictly at the discretion of Paradise. Subsequently,I selected to donate$50,000 ofthose fords to the Freedom Memorial.which I pezeenally feel very strongly about,especially as this is the tenth anniversary of that tragic event on Sept. I I,2001.1 decided that the second$50.000 would go to the Marco Island Museum to be used toward the much-needed exhibits in that new facility. �G` . No on n the County Commission,TDC or any County staff member aslfed or ldirecctted t '� salons or contribute any funds to these worthwhile community clauses. Paradise to reduce out Paradise has t, Valv Ccl supported many other worthy projects in the community such as the Vietnam Wall Memorial,the `r' arts,the City of Naples,and the Economic Develo Nf” thing to do. pment Council.Giving back to the community is the right In COMMCM to the Naples Daily News published on January 21,Commissioner Hiller stressed that she was not suggesting we made a donation to keep a contract.She also stated that the problem was with donations that could have influence,but that it did not happen in this ease "the County establishes guidelines for charitable donations,we will follow them to the letter.ParadiSe is committed to the betterment of Collier County,and as a native of Naples,I would like to continue providing support through donations of our time and money. We are proud to be part of Collier County and to aid in the community's future success. Sincerely, Cedar Homes President,Paradise Advertising&Mariccting,Inc. • IS Received Time Feb. 4. 2011 2:50PM No. 0129 r1 -Q. -T4 q J(51 0\ 1). Cook. 1 G Internal Audit Department °p T � , E �'v'` G Audit Report 2013-5 (formerly Audit Report 2011 -2) Tourism Assets, Revenues, & Expenditures Review Dwight E. Brock Issued: July 3 2013 Clerk of the Circuit Court ,299 "1 amiami "Frail l,ast quite 74()2 Naples. I L :4112-5740 collierclerk.com 13A Prepared by: Ron Dortch, Senior Internal Auditor vs2t2P Megan Gaillard, Senior Internal Auditor Report Distribution: Board of County Commissioners Leo Ochs, Jr., County Manager Jeff Klatzkow, County Attorney Mark Isackson, Director, Corporate Financial and Management Services Jack Wert, Tourism Director Len Price, Administrator, Administrative Services Joanne Markiewicz, Interim Purchasing Director Derek Johnssen, Clerk Assistant Finance Director Connie Murray, Clerk Operations Manager Cc: Dwight E. Brock, Clerk of the Circuit Court Crystal K. Kinzel, Director of Finance & Accounting Draft Audit Report Issued for Response: February 5, 2013 Management Responses Received: February 19, 2013 (by Jack Wert&Joanne Markiewicz) February 20, 2013 (by Connie Murray) February 28, 2013 (by Derek Johnssen) Revised Management Response Received: June 24, 2013 (by Jack Wert& Joanne Markiewicz) July 2, 2013 (by Kelly Green on behalf of Jack Wert) TABLE OF CONTENTS OBJECTIVES 2 SCOPE 2 BACKGROUND 3 SUMMARY 4 OBSERVATIONS, RECOMMENDATIONS, &MANAGEMENT RESPONSES 5 OTHER RECOMMENDATIONS 15 CONCLUSION 16 ADDITIONAL MANAGEMENT COMMENTS 17 �. 4 . 1 1 Objectives • The objectives for this review were to verify: • Contracts for tourism marketing services adhere to the Collier County Purchasing Policy; • Tourism Department expenditures were eligible transactions under the applicable contract; properly supported; correctly processed for payment; and served a valid, legal, and public purpose; • Tourist Development Tax revenues were correctly calculated and allocated to the appropriate general ledger funds; • Existence and accuracy of the petty cash fund(s) assigned to the Tourism Department; evaluate internal controls; and ensure compliance with County Petty Cash Policies and procedures; and • Fixed Assets were properly recorded. Sco e The review consisted of,but was not limited to the following tasks: • Compiling files and information from the Tourism Department, the Clerk's Finance and Accounts Payable Departments, and documents available in county public records; • Reviewing applicable Florida Statutes; • Reviewing applicable County Ordinances and Resolutions; • Reviewing applicable County Manager Administrative Policies and procedures; • Reviewing applicable BCC agendas, meetings, and minutes; • Reviewing Tourism Department RFP's, bids, and contracts; • Interviews with Tourism and Purchasing Department staff; • Interviews with Clerk's Finance and Accounts Payable staff; • Unannounced cash counts of the Tourism Department Petty Cash Fund; • Reviewing Certificate and Request of Imprest Funds forms and Annual Confirmations; • Reviewing fixed assets records and physical inspection of fixed assets; • Reviewing Monthly Tourist Tax Revenue Allocations for fiscal years 2004—2011; and • Reviewing a sample of Tourism Department advertising and marketing expenditures and related contracts for fiscal years 2009-2011. 2 13A Background Florida Statute 125.0104 -Local Option Tourist Development Act asserts that any county in the state may levy and impose a tourist development tax on the rental or lease of hotel/motel, apartment/condominium, campground, and vacation rental stays of six months or less. Per F.S. 125.0104, at least 60 days prior to levying and imposing the tourist development tax, the governing board of the county (herein referred to as the BCC) must adopt a resolution establishing and appointing members to the county tourist development council. F.S. 125.0104 also mandates that the local Tourist Development Council (TDC) prepare and submit to the BCC for its approval a plan for tourist or county development,contingent upon approval of the tourist development tax by County voters. In 1992, the BCC adopted Ordinance No. 1992-18 authorizing the formation of the TDC, subject to voter approval of a 2% Tourist Development Tax (TDT). Collier County voters approved a referendum and the BCC adopted Ordinance No. 1992-60 levying a 2% TDT on rentals within Collier County as defined by F.S. 125.0104. In 1995, Collier County voters approved a second referendum and the BCC adopted Ordinance No. 1995-46 increasing the TDT by 1%. In 2002,the BCC adopted Ordinance No. 2002-501 creating the Tourism Department. In 2005, Collier County voters approved a third referendum and the BCC adopted Ordinance No. 2005-43 increasing the TDT by an additional 1%, resulting in the current 4% TDT. The Collier County Tax Collector is responsible for collecting the 4%TDT revenue and remitting the funds to the BCC. As required by F.S 125.0104, the Collier County TDC consists of nine voting members serving staggered four-year terms. Members are appointed by the BCC and represent local government, the tourism industry, and owners/operators of establishments subject to the TDT. The TDC serves in an advisory capacity to the BCC and is responsible for developing a strategic plan for tourist development and recommending uses for TDT revenues. F.S. 125.0104 defines authorized uses for TDT revenues, while Collier County Ordinance 2005-43 details the specific uses and allocation of TDT revenues. Collier County uses TDT revenues to fund the following activities: • Improvements to beach/park facilities and beach related projects(Category A); • Advertising and marketing of local facilities and attractions(Category B); • County owned and operated museums(Category C-1); • Museums owned and operated by municipalities and not-for-profit organizations(Category C-2); and • Emergency advertising for occasions such as the Deepwater Horizon oil spill in 2010 (funded by transfers from the above categories). Three county departments separately oversee these activities. Coastal Zone Management is responsible for improvements to beach/park facilities and beach related projects. The Collier County Museum manages county owned and operated museum exhibits. The Tourism Department, operating as the Naples, Marco Island,Everglades Convention and Visitors Bureau, coordinates advertising and marketing activities, including emergency advertising and museums owned and operated by municipalities and not-for-profit organizations. Since 2003, the Tourism Department has contracted with Paradise Advertising and Marketing, Inc., a private advertising agency, to develop and execute marketing and advertising campaigns. The Tourism Department also circulates information about visiting Collier County to worldwide travel media and serves as the point of contact for meeting planners, tour operators, travel agents, and other industry professionals. In addition, the Tourism Department awards grants and sponsorships funded by TDT revenues to organizations for out-of-county marketing and promotion of cultural, sporting, and other events to attract tourists to Collier County. The Tourism Department's operating budget is funded by TDT revenues and requires BCC approval. In fiscal year 2011, the Tourism Depai talent had seven full-time employees with an operating budget of$6,461,400. For a review of the TDT Revenue Grant Applications for fiscal year 2011-2012, see Interim Audit Report 2013-6 Limited Scope: Tourist Development Tax (TDT) Revenue Grant Applications — Fiscal Year 2011-2012 (formerly Interim Audit Report 2011-2A). 3 13A • Summary The following observations were generated during this review: 1. Change orders caused annual tourism marketing expenditures to routinely exceed contract. 2. Changes in hourly rates and services were considered a"Zero"dollar change order. 3. Inconsistencies were noted between the County's Request for Proposal, vendor proposal, and contract for tourism marketing services. 4. Expenditures submitted by vendors were not in compliance with contract terms. 5. A donation by Paradise Advertising and Marketing, Inc. was not consistent with TDC and BCC recommendations. 6. There is a potential appearance of a Code of Ethics violation ("conduct that gives the appearance of impropriety"). 7. Certain Tourism Department expenditures were not in compliance with County Resolution, Policy, or procedure. 8. Tourism Department Petty Cash fund was not in compliance with County Policy. 9. Inaccuracies were noted in SAP vendor account information. Other Recommendations noted during the audit: • The Clerk's Finance staff should update the Monthly Tourist Tax Allocation Spreadsheet in a timely manner when the TDT rate and/or allocation percentages change. • Invoices should be date stamped, initialed, and promptly processed by Tourism Department staff. Controls over processing change orders to tourism contracts, payment of tourism expenditures, obtaining and updating vendor contact information, and the Tourism Department's petty cash fund should be reviewed, evaluated, R and monitored by county staff to ensure compliance with Florida Statutes, County Ordinances and Resolutions, Policies, and Procedures. County staff should also ensure vendor proposals address RFP specifications; and terms and conditions in documents, including executive summaries and contracts,presented to the BCC are consistent. County staff should consider implementing consistent County-wide policies and procedures for donations. County officials should take care to avoid the appearance of a conflict of interest. Inadequate controls increase the risk for fraudulent payments and misappropriation of county assets. County Management Summary County staff members are committed to implementing business processes which are consistent with ensuring fiscal responsibility and integrity. County Management has made a number of changes to its business processes prior to, and, as a result of this audit, including,but not limited to: • Completed refresher training on Purchasing Card transactions with Tourism staff; • Returning the petty cash fund to the Finance Department by end of fiscal year 2013; • Updated solicitation documents to include the County's historical spend; • Report all change orders and contract amendments to the Board consistent with Purchasing Policy; and • Continue to work with the Clerk's Finance and Internal Audit Office to ensure corrections have been addressed. ! ; 4 131t Observations 1) Change orders caused annual tourism marketing expenditures to routinely exceed riry ,, contract. Contract #06-4007 awarded to Paradise Advertising and Marketing, Inc. for Tourism Marketing Services was in effect from October 1, 2006 through March 31, 2011 for $2,350,000 annually. During the term of the contract, five change orders were processed for additional marketing services totaling $3,767,000, resulting in tourism expenditures exceeding the original contract amount by approximately 53%. Contract#06-4007 Original Term- 10/1/2006 to 9/30/2008 $ 2,350,000 Date Change Order# Purpose Amount Contract Total %Change 10/09/07 Amendment#1 Increase County Museum Advertising budget $ 70,000 $ 2,420,000 3.0% 07/08/08 Change Order#1 Additional Marketing expenditures $ 700,000 $ 3,120,000 28.9% $ 770,000 32.8% Contract Renewal#1 10/1/2008 to 9/30/2009 $ 2,350,000 Date Change Order# Purpose Amount Contract Total %Change 12/02/08 Zero Dollar#1 Replace Exhibit A-Hourly Rates $ - $ 2,350,000 - 03/09/09 Change Order#2 Additional International Marketing Expenses $ 204,000 $ 2,554,000 8.7% 04/20/09 Zero Dollar#2 Clarify Agency Fee language in contract $ - $ 2,554,000 - 07/15/09 Change Order#3 Additional Marketing Expenditures-Summer Campaign $ 918,000 $ 3,472,000 35.9% $ 1,122,000 47.74% Contract Renewal#2 10/1/2009 to 9/30/2010 $ 2,350,000 Date Change Order# Purpose Amount Contract Total %Change 04/01/10 Change Order#4 Additional Marketing Expenditures-Yearly Campaign $ 1,875,000 $ 4,225,000 79.8% Total Change Orders=I $ 3,767,000 I J 5143961 It does not appear change orders to Contract#06-4007 were considered when the County set the $2,100,000 budget amount for RFP#10-5541,Tourism Marketing Services. Recommendation: • Going forward, County staff should ensure services solicited in the bidding documents(i.e. RFP)reflect the full services of the intended contract. County Management Response: a "Change Orders are the mechanism that the Purchasing Department utilizes to receive BCC authorization for increases in expenditures not contemplated at the start of an agreement In the case of Paradise Advertising and Marketing Inc., Change Orders were requested for specific TDC recommended and BCC approved additional destination marketing expenditures. These change`orders occurred during an un-anticipated downturn in tourism,for circumstances beyond the County's control; change orders were issued to reduce the negative impact on the community's economy. b. The BCC approved FY 2005-06 budget amount for tourism advertising and marketing was used in bid solicitation #06-4007. Historical spend activity is identified in solicitation documents; the County will endeavor to include information about unusual and unanticipated annual expenditures in Tourism marketing related solicitations. c. Additional funds or other modifications are approved by the Board via a Change Order, or amendment, according to the BCC approved Purchasing Policy" 5 13A 4 :' Internal Audit Response: By under soliciting services, a concern is raised that potential respondents may be deterred from responding. This may narrow the competition, where marketing agents may be interested in large contracts. The contract amount has been increased each year through change orders to a level that may attract additional respondents. d 2) Changes in hourly rates and services were considered a "Zero" dollar change order. Contract #06-4007 awarded to Paradise Advertising and Marketing, Inc. for Tourism Marketing Services was in effect from October 1, 2006 through March 31, 2011. In December 2008, a change order was processed for the "Replacement of Exhibit A specifying hourly rates for services performed on behalf of Collier County. This new Exhibit A indicates new services and rates, which will be performed within the dollar limits of the existing agreement." County staff regarded the new exhibit as a "zero" dollar change order and did not obtain BCC approval. The new Exhibit A contained five additional staffing positions related to digital/internet services and new hourly rates ranging from $50 per hour for a Data Entry Specialist to $200 per hour for an Interactive Developer. Changes to rates and services significantly alter the original terms of the contract, which requires BCC approval. If rates increase, then service hours decrease accordingly in order for expenditures to remain within "the dollar limits of the existing agreement." Also, Contract #06-4007, section #4 - THE CONTRACT SUM: AGENCY FEE states "... All media and production costs ... up to $2,000,000 annually will be billed to the County at net, so that the County receives any available discount. Media and production billing over $2,000,000 annually ... will be billed at gross, reflecting a Contractor commission of 15%". County staff did not calculate the monetary impact of the new rates and additional positions. A substantial increase in digital/internet services may cause advertising and marketing costs to surpass the $2,000,000 threshold more quickly, subjecting additional expenditures to the 15% Contractor commission and increasing the cost of tourism marketing services. Recommendation: • County staff should implement procedures to ensure change orders to existing contract terms and conditions are properly evaluated and approved by the BCC. County Management Response: a. "The Tourism staff will follow the BCC approved Purchasing Policy related to change orders and amendments and work directly with the Purchasing Department to execute, and obtain approval by the Board b. In the audit for Contract #06-4007 the "new" Exhibit A did not increase rates, rather, it provided for new personnel categories, all of which (the new personnel categories)fell within the contract scope of work These new personnel categories were added in the event the department needed to utilize these skill sets in the scope of work and to enable the payment by the Clerk's Finance staff" Internal Audit Response: New services and rates have a financial impact on the contract. If the new hourly rates and positions are added and the budget remains at the same set amount, then the number of service hours may decrease in order to stay within budget. This results in a fiscal impact. "Zero"dollar change orders implies there is no fiscal impact. For example, if the advertising rate equals $10 hour and the total advertising budget is $1,000,then the total service hours cannot exceed 100 hours. If the hourly rate increases to $20 hour and the budget remains $1,000, then total service hours available is reduced to 50 hours. The County may receive fewer service hours for the same budgeted ( 4i4 v� amount. The addition of new positions/services may result in the set budgeted amount being reached faster. 6 13A 4 3) Inconsistencies were noted between the County's Request for Proposal, vendor- proposal, and contract for tourism marketing services. • The Board of County Commissioners (BCC) awarded Contract#10-5541, Tourism Marketing Services,to Paradise Advertising and Marketing, Inc.(Paradise Advertising)on January 25, 2011.A comparison of the County's Request for Proposal (RFP), Paradise Advertising's submitted proposal, and contract approved by the BCC identified the following inconsistencies: Budget • The RFP budget was$2,100,000 plus an undetermined amount for museums. • Paradise Advertising's proposal was $2,400,000, which included a $2,100,000 annual base and a $300,000 administration fee. • The Contract was $2,350,000, which included a $2,000,000 annual base, plus a $300,000 administration fee and$50,000 in advertising and marketing services for museums. Emergency Funds • The RFP included a provision for$1,500,000 in emergency funds. • Neither Paradise Advertising's proposal nor the Contract referred to emergency funds other than Paradise Advertising will work with the County to develop an emergency advertising plan. • Paradise Advertising was paid $2,375,000 in emergency funds for advertising under the previous tourism marketing services contract(Contract#06-4007). Administration Details • The RFP required vendors to provide projected costs with estimated duration and a schedule of principals and staff. • Paradise Advertising's proposal included projections of 490 hours per month from principals and staff. Note: In December 2010, three key employees with experience working on Collier County's marketing account left Paradise Advertising, including the company's Vice President/Creative Director and an account supervisor with 20 years of industry experience. This change in staffing occurred after Paradise Advertising submitted its proposal in August 2010, but was not disclosed to the BCC prior to approving Contract #10-5541 in January 2011. The principals on Collier County's account, as detailed in Paradise Advertising's proposal, were substantially altered prior to awarding the contract without notifying the BCC. Additional Billing • The RFP allowed for creative time and out-of-pocket expenses. • Paradise Advertising's proposal included hourly rates for creative design; incremental advertising options of $1,000,000; and out-of-pocket expenses to be billed at net. • The Contract includes creative time in regular media and production costs, which are billed at net up to the $2,000,000 annual base; anything over the $2,000,000 will be billed at gross; and out-of-pocket expenses will be billed at net. Use of Subcontractors • The RFP did not allow for any mark-up and vendors were required to provide a list of subcontractors with letters of intent. • Paradise Advertising's proposal stated no subcontractors would be required, but later referred to the use of outside vendors to augment services. Paradise Advertising's proposal did not include a list of outside vendors. EE • The Contract requires Paradise Advertising to provide invoices from outside vendors. 7 Commission 1 3 A • The RFP encourages vendors to accept less than a 15%commission or charge a fee in lieu of commissions. • Paradise Advertising's proposal does not specify a commission percentage. • The Contract includes a $300,000 administrative fee, plus a 15% commission on costs over the $2,000,000 annual base. Recommendations: • County staff should ensure contracts are consistent with the documented scope of work. • County staff should use the terms and conditions detailed in RFPs and vendor proposals to prepare contracts to ensure consistency within documents presented to the BCC for approval. County Management Response: a. The Tourism Department will comply with the BCC approved Purchasing Policy for any RFP solicitations. b. Contract #06-4007 for Tourism Marketing Services was awarded to Paradise Advertising and Marketing, Inc. after an RFP process that adhered to the BCC approved Collier County Purchasing Policy. c. The contract with Paradise Advertising and Marketing Inc. was for$2,350,000 which accurately reflected the final BCC approved budget for that fiscal year for these services. d. The RFP indicated that Emergency funds of$1,500,000 could be used in the case of a declared emergency for destination advertising and marketing. Emergency marketing expenditures are used only when needed and are not reoccurring. e. The Vice President/Creative Director and an Account Supervisor left Paradise Advertising in December of 2010. Those positions were immediately filled by Paradise Advertising with seasoned professionals with credentials that exceeded those of the departing staff members. Neither Collier County, nor the Tourism Department experienced any decrease in service as a result of these staff changes. We experienced an immediate increase in account service attention and a much higher level of creativity with the new staff members. f Paradise Advertising and Marketing, Inc.is a full-service marketing company providing to its clients a wide range of in-house advertising,promotion, media and other marketing services. They did not intend to use, nor have they used subcontractors for their creative work or other outside services on our account under their agreement with Collier County. g. An RFP outlines the scope of services the County wishes to receive. The vendor Proposals indicate what each bidder is willing to offer related to that scope of services. The Contract is negotiated with the successful vendor to achieve the best possible arrangement for the County. For these reasons, these three documents by necessity may have a few differences and might not have complete agreement. • The Board's Purchasing Policy (VIII A 3) allows departments to use the competitive proposal methodology "Where the County is incapable of specifically defining the scope of work for which the commodity(s) or service(s)is required... " • The solicitation is used to describe the "intended scope of work/service"and the selection criteria;the vendor's proposal describes the vendor's ability to perform the intended scope of work and respond to their qualifications; and the contract is the codification of what will be performed for the stated, and agreed upon terms and conditions. The goals of each of these documents are different, and inter-related. r ' • Contracts that are the result of requests for proposals are negotiated with the selected vendor and may not necessarily match the solicitation and/or the vendor's submitted proposal. This negotiation is in compliance with Purchasing Policy as noted above. 8 13A , • Each Selection Committee is provided instructions regarding the review process (including selection criteria), the solicitation document and the vendor's proposals. Ik Internal Audit Response: Item"I'-Use of Subcontractors Miles Media was hired by Paradise Advertising to provide webhosting services for County websites. It appears Miles Media is serving in the capacity of a subcontractor of Paradise Advertising under contract #06-4007. Paradise Advertising did not disclose Miles Media's involvement in the completion of contract#06-4007 to Collier County, as required by the RFP. Miles Media has a separate contract with Collier County to provide webhosting services at a lower rate. See Observation#4 for further detail. 4) Ex )enditures submitted b' endors 1%ere not in compliance with■ contract terms. Vendor submitted an ineligible expenditure for payment. Contract #06-4007 awarded to Paradise Advertising and Marketing, Inc. (Paradise Advertising) for Tourism Marketing Services was in effect from October 1, 2006 through March 31, 2011. Paradise Advertising submitted an invoice dated May 6, 2010 for website hosting and maintenance services related to the Tourism Department's film commission website (www.shootinparadise.com). A review of Contract #06-4007 and the invoice noted the following: • Contract#06-4007, section #2 - Statement of Work did not list website hosting and maintenance as a service provided by Paradise Advertising. • Paradise Advertising submitted an invoice for website hosting and maintenance services completed by Miles Media Group, Inc. It appears Miles Media Group, Inc. is a subcontractor for Paradise Advertising. Collier County has a separate contract with Miles Media Group, Inc. (#09-5183) for tourism website design and maintenance, including www.shootinparadise.com. • Paradise Advertising was paid for a service already contracted through Miles Media. Paradise Advertising's Invoice #983-0 in the amount of $2,100 was for 6 months of website hosting and maintenance with an average cost of$350 per month.Under Contract#09-5183,Miles Media Group,Inc. charges Collier County a monthly rate of$250 for website hosting and maintenance. It appears Miles Media submitted the invoice for the website hosting and maintenance under Paradise Advertising's contract at a higher rate than was allowed under their contract. It appears Collier County overpaid website hosting and maintenance by$100 per month. Note: During the November 28, 2011 TDC meeting, a TDC member said Miles Media Group, Inc. was a subcontractor under the Paradise Advertising and Marketing, Inc. contract and held their own contracts with the County. The Tourism Director responded "No ma'am, that's not true". At the meeting the owner of Paradise Advertising and Marketing, Inc. confirmed Miles Media Group, Inc. was not a subcontractor. The above example directly conflicts with these statements. Contract#06-4007, section#4-THE CONTRACT SUM: AGENCY FEE states"... All media and production costs ... up to $2,000,000 annually will be billed to the County at net, so that the County receives any available discount. Media and production billing over $2,000,000 annually ... will be billed at gross, reflecting a Contractor commission of 15%." The payment of ineligible expenditures under Contract #06-4007 could cause advertising and marketing costs to surpass the $2,000,000 threshold more quickly, subjecting eligible expenditures to the 15% Contractor commission and increasing the cost of tourism marketing services. Documents presented to the BCC for approval were inconsistent. The Executive Summary presented to the BCC for approval indicated Contract#10-5534, between the County and Alan S. Maltz, photographer, was for a series of 30 photographs to be completed"... over the next three years at an annual cost of$30,000 including travel and production expenses not to exceed $10,000 per year for a total project cost over three fiscal years of$90,000." 9 13 A Contract #10-5534, TERM section states "This is a one (1) year agreement commencing on July 1, 2010 and terminating on June 30, 2011. The CLIENT may, at its discretion and with the consent of the ARTIST, renew the Agreement under all terms and conditions contained in this Agreement for two (2) additional one (1) year periods ... Funding is not guaranteed beyond one (1) year, and subsequent years' agreements will be based on availability of an appropriation of tourist tax funds." Contract#10-5534 also contained conflicting payment terms. The RIGHTS GRANTED section states "...Payment will be at the agreed amount of two thousand dollars ($2,000) per shot up to a maximum of sixty thousand dollars ($60,000) over a three (3)year period ..." The FINANCIAL TERMS section states "... it is anticipated that a sum of sixty thousand dollars ($60,000) plus expenses ... will be paid for the services of Alan S. Maltz over a three (3) year period based on availability and appropriation of tourist tax funds ... A portion of the expenses ... and other costs associated with this project will be paid by the CLIENT up to a maximum per year of ten thousand dollars ($10,000)." Annual expenditures complied with the most restrictive contract terms; however conflicting language increases the risk of inappropriate payments to vendors or may result in the Clerk's inability to pay vendors. Recommendations: • County staff should ensure contract terms are consistent and accurately described in documents presented to the BCC for approval. • When reviewing expenditures to the contract, Clerk's Accounts Payable staff should identify any conflicting language and/or discrepancies. County Management Response: a. "Tourism staff will ensure that contact terms are consistent and accurately described in documents presented to the BCC for approval. Tourism staff acknowledges that the use of Miles Media by Paradise Advertising and Marketing Ina for website hosting was not a correct procedure and we will advise this vendor and all of our other vendors that they must use the lowest priced vendor and ensure that the selected vendor does not have a contractual relationship with the County for similar services. b. The Alan Maltz agreement to purchase 30 images over three years has a wording conflict with the Executive Summary presented to the BCC A review of SAP records indicates the Tourism Department expended$29,905 in FY 10, $30,000 in FY 11 and$30,000 in FY12 for the services provided by Alan Maltz This appears to be in compliance with the Agreement terms to purchase 10 images at $2000 each plus production expenses for a total of$30,000 per year c. Tourism staff will ensure that future Executive Summaries are in direct compliance with the related agreement when presented to the BCC for approval." Clerk's Accounts Payable Management Response: "Clerk's Accounts Payable staff will continue to identibr any conflicting language and/or discrepancies crossing related legal documents. Purchasing will be contacted for further clarification of content and/or possible contract amendment if required in order to make a legal payment on behalf of the Board of County Commissioners." 5) A donation by Paradise Advertising and 'Marketing, Inc. was not consistent with TI)C and BCC recommendations. In December 2009, the BCC approved a $1,000,000 change order for additional marketing services to Contract#06-4007 with Paradise Advertising and Marketing, Inc. In the TDC's Advisory Board Meeting on Monday, January 25, 2010, Paradise Advertising and Marketing, Inc. offered to donate up to $100,000 of the media commissions to the county contingent upon being awarded and " receiving payment in full for the $1,000,000 change order for additional services. The TDC Meeting Minutes state the firm's intent was to allow the TDC to re-invest the$100,000 into marketing efforts. 10 13A The owner of Paradise Advertising and Marketing, Inc. noted he would rely on TDC's direction regarding the proposed $100,000 donation. The TDC encouraged the $100,000 donation to be provided to the Marco Island Museum Exhibit Project. In the BCC Meeting on Tuesday, January 26, 2010, the BCC Chairman was asked how the donation was to be allocated according to the TDC recommendation. The BCC Chairman said the donation would be allocated as follows: $50,000 to Marco Island Museum and $50,000 to be used for advertising services, rather than Paradise Advertising and Marketing, Inc. lowering their fees charged to the County for marketing services. On December 9, 2010, the donation was received by the County with $50,000 earmarked for the Marco Island Museum and $50,000 for Freedom Memorial, a project initiated by the BCC chairman. The donation was not consistent with the recommendation of the TDC and BCC Minutes. In the BCC Meeting on Tuesday, December 14, 2010, the BCC accepted the donation for $50,000 earmarked for Freedom Memorial. Recommendation: • The BCC should consider establishing a consistent County-wide donation process. County Management Response: "Tourism Department staff discussed with the Tourist Development Council (TDC) a proposal by Paradise Advertising to make a donation of a portion of their media commissions they would have earned as a result of the additional destination marketing funding approved by the BCC in response to the world-wide economic crisis that was negatively affecting tourism to our community. The TDC recommended a donation by Paradise Advertising to the Marco Island Museum. As an Advisory Board, the TDC only recommends actions to the BCC. The BCC, in turn, is under no obligation to follow TDC recommendations." t 6) There is a potential appearance of a Code of Ethics violation ("conduct that gives the a > >earance of Jill tro )riot%"). Collier County Ordinance 2004-05 mirrors and further elaborates Florida Statute Chapter 112 - Code of Ethics. The Ordinance indicates "Public officials shall not solicit or accept, directly or indirectly, any fee, compensation, gift, gratuity, favor, food, entertainment, loan, or any other thing of monetary value, from anyone who the public official knows or reasonably should know: a. has, or is seeking to obtain, contractual or other business or financial relations with the county department or board with which the public official is affiliated..." Collier County Ordinance 2004-05 indicates it is the responsibility of each public servant to act in a manner that contributes to ensuring the public's trust in its government. Individuals should avoid conduct that gives the appearance of impropriety in the performance of his or her public duties. Since 2003, Paradise Advertising and Marketing, Inc. has been under contract with the County to provide tourism marketing services. On January 25, 2011, Commissioner Coyle, pointed out "...Paragraph 14 of the procurement policy prohibits those kinds of interactions between companies who are bidding on contracts and commissioners... `Firms and their agents are not to contact members of County Commission for purposes such as meeting or introduction, luncheons, dinners, et cetera'... `Failure to abide by this provision may serve as grounds for disqualification for award of this contract to the firm.'" On July 25, 2011, the owner of Paradise Advertising and Marketing, Inc. had dinner with a sitting commissioner at the commissioner's home. The dinner was scheduled the night before a pending BCC (July 26, 2011) agenda item for the enrichment of the owner's company, with a change order for $800,000 of increased services and fees. This has the potential appearance of a conflict of interest according to Collier County Ordinance 2004-05. Subsequent to this audit finding, the Board of County Commissioners amended the Collier County Ordinance through the adoption of Collier County Ordinance 2013-39. 11 Recommendations: d • All public servants and vendors should comply with county/state code of ethics. • Public officials should take care to avoid the appearance of a conflict of interest. County Management Response: "The Tourism Department staff has and will continue to comply with County and State Code of Ethics. We have no knowledge of dinner attended by a Commissioner and the owner of Paradise Advertising and Marketing, Inc." 7) Certain Tourism Department expenditures Nacre not in compliance NIith Count■ Resolution. Police, or )rocedure. Tourism purchasing card expenditures were not in accordance with County Resolution 2006-40 or County Manager Administrative(CMA)Policy#5808—Purchasing Card Program. • A review of Tourism Department purchasing card expenditures identified one transaction in which the employee e-mailed a vendor on January 21, 2011 explaining that a charge for a conference registration in mid-December 2010 did not appear on the employee's December purchasing card statement. The employee requested that the vendor wait to"... process those charges now after Feb. 1st because my January credit card limit has hit its max". County Resolution 2006-40, Section F—COUNTY PURCHASING CARD USE states"... The Purchasing Card issued to each Tourism Department staff member will have ... a maximum monthly spending limit of$10,000". Requesting vendors to hold or delay processing purchase card expenditures is a circumvention of spending limits established by County Resolution 2006-40. • 3 purchasing card expenditures for tradeshow exhibit services posted to Out of County Travel Professional Development(GL#640300). It appears Marketing&Promotion(GL#648170)is a more appropriate account. 5Sk°r LL Expenditures should be appropriately classified. Tourism Department expenditure lacked proper supporting documentation. A review of Tourism Department purchasing card expenditures identified one transaction lacked an itemized receipt. The expenditure was airfare for the Tourism Director to attend a tradeshow in Washington,D.C. The receipt included with the expense report listed flight information but did not list the amount of airfare. CMA #5808, Section C(2)(h) states the cardholder agrees to "Obtain an itemized receipt for all purchases. The itemized receipt must include the quantity, a description of the item(s),the unit cost and the extended price ..." Incomplete supporting documentation and conflicting payment information on schedules and invoices increases the risk of fraudulent payments. Tourism employee expense reimbursement was overstated. A review of Tourism Department employee expense reimbursements noted an employee booked airfare for herself and a companion. The employee included the companion's $28.00 seat assignment fee resulting in an ineligible expense reimbursement. Accurate requests are necessary to ensure reimbursement of proper expenses. Recommendations: • Training should be provided to the Tourism Department Staff to ensure each person understands the policies, procedures, and forms governing Purchasing Card transactions. • County staff should continue to review supporting documentation and expense reports to ensure expenditures are eligible; for the proper amount; and paid to the correct vendor. 12 13A • County staff should continue to review Purchasing Card Transactions to ensure expenditures are posted to the proper general ledger accounts. County Management Response: a. Tourism Management acknowledges that the vendor request was wrong and the tourism employee has been notified of this incorrect use of her Purchasing Card The tourism employee in question was trying to register for a trade show that was in accordance with our tourism mission and was in the best interest of the County. b. Tourism Management acknowledges the errors on three purchasing card expenditures for trade show exhibit expenses that were incorrectly posted to the wrong GL code. Tourism staff will endeavor to post these types of expenses and all other tourism expenditures to the correct GL code in the future. c. The purchasing card expenditure for airfare by the Director to Washington DC was a change fee that was necessitated by the rescheduling of a BCC tourism item that required a later departure. The Tourism Director requested Delta Airlines to provide a more detailed receipt than the one they provided, but Delta was unable to produce such a document. d The expenditure for a seat fee of$28 for a companion was an oversight on the Tourism Department employee's part and she has reimbursed the County for that$28 fee. e. The Tourism Department staff received a Purchasing Card refresher course on March 28, 2013 by the Purchasing Department staff in the proper use of the County Purchasing Card f Purchasing policies and County Manager procedures (CMA # 5808) were reviewed and acknowledgement forms signed by all Tourism Statf prior to receiving their card an audit was conducted as recently as February /March 2012 validating credit cards were in the staff's possession. The Purchasing staff increased the Purchasing Card limits of some Tourism st beyond the standard limits g g .�f� g f �fl' ey due to the amount of travel by staff members per Purchasing Resolution 2007-340 (approved 11/27/07; #10W), which was approved and dated after BCC approval of Resolution 2006-40. The Tourism staff intends to update Resolution 2006-40 to reflect consistency between the Purchasing Policy and the Tourism Travel Resolution. 8) Petty Cash fund Leas not in corn )liance with County Police. Unannounced reviews of the Tourism Department's Petty Cash fund on April 28, 2011 and September 15, 2011 identified the following: The petty cash fund was not replenished or balanced quarterly • A Reimbursement Form dated March 7, 2011 requested reimbursement for eight purchases dating from December 2005 through December 2009. • The custodian or sub-custodian did not document each time the petty cash fund was balanced. Since records were not available for review, Internal Audit was unable to verify if the petty cash fund was balanced on a quarterly basis. County Petty Cash Policy, Item#11 states"Petty Cash accounts should be replenished and balanced quarterly". Timely submission of reimbursement requests is necessary to ensure expenses are reported in the appropriate period. Quarterly balancing of petty cash funds is key to detecting and correcting any discrepancies in a timely manner. Appears the Tourism Department did not return prior annual confirmations and returned the Fiscal Year 2011 confirmation after the designated due date Clerk's Finance Department did not receive annual confirmations for Fiscal Year 2008, 2009, and 2010. For Fiscal Year 2011,the Tourism Department's confirmation was dated August 15,2011, but the Clerk's Finance Department did not receive the confirmation until August 25, 2011. 13 1 County Petty Cash Policy, Item#15 states"Imprest Fund Confirmations will be done on an annual basi e fi c 1 year end.The form will be sent to the departments by Finance and must be returned by the date requested." Petty cash funds may not be properly recorded if annual confirmation forms are not completed and returned by the established deadline. Fiscal Year 2011 annual confirmation did not list accurate fund information The confirmation listed the wrong physical location, custodian, and sub-custodian for the petty cash fund. The fund custodian did note the correct information on the confirmation returned to the Clerk's Finance Department. County Petty Cash Policy, Item#8 states "A new Certificate of Request form must be filled out and submitted each time there is a change of the following: Director, custodian, sub-custodian, or physical location.". The Clerk's Finance Department has not received an updated Certificate and Request of Imprest Funds form. Using the Certificate and Request of Imprest Fund Form to update petty cash fund information ensures only authorized custodians and sub-custodians have access to the fund and that all funds are in the authorized location. Recommendations: Training should be provided to the custodian and sub-custodian to make certain each person understands the policies, procedures, and forms governing petty cash funds. In particular, procedures should be implemented to ensure: • Petty cash reimbursement forms are submitted at least quarterly, • Petty cash funds are balanced at least quarterly and the balancing is documented, • Annual confirmations are returned to the Clerk's Finance Department by the designated due date, and • Changes to the petty cash fund are documented on a Certificate and Request of Imprest Fund form and the original provided to the Clerk's Finance Department. County Management Response: a. "Tourism staff acknowledges that the Petty Cash fund is to be balanced quarterly, but due to very few if any transactions each year this procedure was overlooked The Petty Cash Fund Custodian is now aware that the fund must be balanced quarterly in accordance with Petty Cash Policy Item # 11, whether or not there have been transactions in the fund b. Tourism Department staff acknowledges they did not return the annual report for FY 08, 09 and 10 due to a misunderstanding of this requirement The lateness of the FY 11 report was due to a delay in interoffice mail delivery a Tourism Management will update procedures to require the Custodian to contact the Clerk's Finance Department prior to the end of each fiscal year for the Petty Cash form. d Tourism Department staff that the Petty Cash account is no longer necessary to support our operations. The Tourism staff intends to return the $50 in the fund to Finance after completing and delivering the final report for 2013." 9) Inaccuracies Iv ere noted in SAP vendor account information. The Purchasing Department creates a payment account in SAP for each vendor doing business with Collier County. This payment account includes the vendor's mailing address, phone number, tax identification number, and preferred payment method. The Clerk's Accounts Payable Department uses this payment account to determine where to send payments. z Vendor payment accounts contained inaccurate contact information A comparison of contact information on vendor invoices to vendor account profiles in the SAP financial system identified the following: 14 13A ' ' • Four vendors submitted invoices that did not list a mailing address or phone number. One of these vendors had a W-9 Request for Taxpayer Identification Number and Certification form on file containing the mailing information and contact phone number. 44`� Inaccurate contact or account information increases the risk of fraudulent payments. ` p Y Recommendation: • The Purchasing Department should establish procedures to routinely review and update vendor account contact information and ensure current W-9 forms are on file for vendors. County Management Response: • "Both Purchasing and Accounts Payable staff have access to creating vendor accounts in SAP and both staff groups can make changes/updates to the Vendor Master file for company code 1000. It is therefore recommended,that both offices establish procedures prior to payment. • Purchasing staff implemented a W-9 (and substitute W-9)process for all formal solicitations and contracts during the August 2007 SAP Upgrade. The process of obtaining a W-9 or substitute W-9 continues to be used with any new vendor selected as a result of a formal solicitation/contract awarded by the Board Further, the Purchasing Department has implemented an on-going updated vendor W-:9 process. • When Accounts Payable staff reports payment address discrepancies, the Purchasing Department will communicate with vendors and update addresses using obtained W-9. Clerk's Accounts Payable Management Response: "Clerk's Accounts Payable staff will continue to validate that the invoicing party and remit-to addresses are accurately reflected in the vendor master. With the advent of the new accounts payable invoice imaging software there is an appropriate built-in workflow that allows the accounts payable staff to notes purchasing of any i discrepancies between current vendor master name and address to actual invoice name and remit-to address imaged in the system. Vendor master file maintenance will be segregated" Other Recommendations 10) The NIonthl■ Tourist Tax Allocation Spreadsheet should be updated in a time ■ manner II hen the Tourist Develo )ment Tax rate or allocation )ercentages change. Clerk's Finance staff uses the Monthly Tourist Tax Allocation Spreadsheet to calculate the distribution of TDT revenues to the designated general ledger funds. Effective October 2005 (Fiscal Year 2006),the TDT rate increased from 3%to 4%. In addition,two new general ledger funds were created,which changed the allocation percentages. An inordinate number of adjusting journal entries were posted in January 2006 for the October, November, and December 2005 monthly allocations to correct the revenues distributed to the general ledger funds. The Monthly Tourist Tax Allocation Spreadsheet was not updated until February 2006, resulting in the adjusting entries for the fiscal year. The untimely update of the Monthly Tourist Tax Allocation Spreadsheet may result in the incorrect allocation of tax revenues to the specific general ledger funds and the amount available for tourism activities. Recommendation: • The Clerk's Finance staff should update the Monthly Tourist Tax Allocation Spreadsheet in a timely manner when the TDT rate and/or allocation percentages change. 15 • 3 A Clerks Finance Management Response: "The Finance and Accounting Management team understands that revenue allocation changes approved by ordinance are an immediate priority and are routinely booked. Subsequent to the adoption of Ordinance 2005-43, on July 26, 2005, master data updates were made to the financial system in August of 2005 to accommodate the additional 1% tax and its attendant allocation percentage changes. The effective date of Ordinance 2005-43 was September 1, 2005 and as of the effective date all database preparations for the new allocation were in place. However, at the time of the ordinance change adopting the 4th percent there was debate regarding the application of the new I% to rental contracts let prior to the ordinance change. The Tax Collector's November lump sum distribution,for October receipts,provided a breakout between revenues collected under the 3% ordinance versus the 4%ordinance. Two months lapsed while our Department analyzed the data contained in the Tax Collector's revenue reports. These reports were eventually used as the basis to correct the October through January receipts, in February of 2006, and continued to be used as the basis for postings. All corrections were made within the proper fiscal year, so there was no impact to fiscal year 2006 financial reporting. The Finance and Accounting Department's policy is to change all revenue allocations on a timely basis." t l ) IMF dices should he date stamped, initialed, and promptl■ processed b■ Tourism Dc )ar ment statT. A review of tourism expenditures identified four invoices were not date stamped and initialed by Tourism staff. Without the proper date stamp and approval, it cannot be determined if the invoices were promptly processed. Recommendations: • With the implementation of the Dolphin system, invoices should be sent by vendors directly to the Clerk's Accounts Payable Department. • If the Tourism Department does receive invoices,the department should implement procedures to ensure invoices are date stamped, initialed,and promptly processed. County Management Response: a. "The new Dolphin system directs all vendors to send their invoices directly to the Clerk's Accounts Payable Department. The Tourism Department staff will direct all our contracted vendors to adhere to this new policy. b. Invoices received by the Tourism Department staff directly from a vendor will be date stamped,initialed and promptly processed with the Finance Department for payment." Conclusion County staff should assess the monetary impact of change orders to determine proper approval and include historical spend data when preparing future RFPs. Before making recommendations to the BCC, selection committees should ensure vendor proposals and contracts are consistent with RFPs. County staff should review expenditures for proper supporting documentation and monitor compliance with Florida Statute, County Ordinance and Resolutions, contract terms,and Policies and Procedures. County staff should consider developing a consistent County-wide process for donations. County officials and County staff should take the necessary precautions to avoid the appearance of any conflict of interest. Ultimately, it is the responsibility of County management to understand and implement the proper controls in order to limit the risk of fraud, error, and misappropriation of county assets. The Clerk's Internal Audit Department may recommend improvements in audit reports, but it is the duty and decision of County management to formulate processes that ensure compliance with Florida Statutes, County Ordinances and Resolutions, Contract Terms, and County Policies and Procedures. The cooperation of the Tourism and Purchasing Department staff along with the Clerk's Finance and Accounts Payable staff during this review is greatly appreciated. 16 1 3 A Additional County Management Comments: Tourism Management and Purchasing Management appreciate the time the Internal Audit team dedicated to this audit assignment. The Audit Report indicates some areas for improvement in the Tourism Department operations, implementation will be forthcoming. Additional future actions have also been identified for implementation in conjunction with the Purchasing Department. 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C O 1-t• 5 Cl. - r-r �-. fD to , . 13A --I o� 0) .z. Th, r77 70 93, o X. C. r� ry BURT 0 C 134 January 26, 2010 • $60,000 a year, so we've financed the exhibits and buying museums as well, so that's not impossible, you know, to -- as the TDC funds become available in our museum budget, that some of that would be allocated towards continuing with the exhibit plan. I think this whole -- this whole discussion was showing you, as you requested, what -- where is the money going and what is -- because there's been a lot of numbers floating around. Let's tie that down. But this kind of approach, yeah, you can stop and start, and you'll know where you must pick up when funds become available. But I'm not sure that swapping cases around and stopping construction on new exhibit cases at the Depot would give you the results at either place that you'd be proud of, to tell you the truth.. COMMISSIONER FIALA: Ron, did we vote on donating a million dollars for display cases at the Depot? MR. JAMRO: In the budget process, yeah, we explained all that. And we had about an inch-thick construction book as well that showed -- which is what we need for Marco now of the -- rather than just pictures, how are these built, the construction documents. So that's where the design aspect is so critical to the Marco. We have that component in the Depot. We don't have it in Marco. And before we can proceed, we need to develop that. But rather than do the entire project, we'll do it gallery by gallery, which gives us -- so we can pace it a little better and fund it a little easier. CHAIRMAN COYLE: Okay. Commissioner Halas? COMMISSIONER HALAS: Yeah. Commissioner Fiala, I really, really want to help you on this, but when I look at the shortfall of money that we're going to have to figure out how we're going to make up, okay -- I could probably digest $200,000 using the 100,000 that's been already put aside for the Historical Society down there, the $50,000 that Mr. Hames is going to donate, and then the county new money would be 200,000. And my concern is, if we have a $26.7 million shortfall, I'm not 1110 Page 64 1 3 A January 26, 2010 • sure how we're going to address this, and we also have a huge debt service that we have to pay. If this was in good economic times, I bet you dime on the dollar that we would all be in unison in regards to giving Marco Island all the necessary funds that they need. But each commission meeting we hear more people that come before the Board of County Commissioners looking for money, and we just don't have it. And it's going to get worse as we move on. So the best that I can do for you would be the 200,000, and I'm being honest with you. I just feel that the shortfalls that we have looming on the horizon, it's storm clouds, and we need to figure out how we're going to address this whole thing. So -- and when times get good, we owe something to the Marco Island Museum, and I thought maybe that we could help offset some of their expenses by donating that land to them, the whole nine yards, so it was their museum totally. But I understand that they're not in the -- they are not into running museums and, obviously, they realize that IP they don't have the funds to hire museum personnel also. So when you look at the whole picture, this whole thing is -- its going to take us to run that museum, and that's going to be some items that we're going to be looking at as we go through the budget process, how we're going to fund the people that are going to be on those museums. We're also going to be looking at the personnel that it takes to run libraries and other things that all of us are very concerned about. So when I look at the shortfalls that we have, we have to be very prudent so that we can make sure that we can take care of what's before us on our plate without losing additional people in this county. And that's where I stand on this. CHAIRMAN COYLE: Commissioner Coletta? COMMISSIONER COLETTA: Yeah. Just a quick question again. How much of this money was -- was from the money we turned back from the agriculture extension for the garden? Page 65 January 26, 2010 13A • MR. OCHS: Commissioner, that was $150,000 that went back into your capital reserves. COMMISSIONER COLETTA: Okay. I have no problem relinquishing every penny of it -- not that I expect anybody would ever give it back to me -- for the museum. But let me see if we can come up with a compromise. I can tell you the way this is going now, Commissioner Fiala, the motion you made and I seconded isn't going to pass. And what I'm going to suggest to you, if you would consider modifying the motion to drop any reference to the Naples Depot as far as the money goes and modify it to the fact that instead of the 200- everybody's talking about, 250- as a fallback position. That still puts you $1 00,000 short from where you need to be but a lot closer to it. Maybe we can get a third commissioner to vote on it. Would you consider that? COMMISSIONER FIALA: Yes, but then I would like to bring • back the Depot and also discuss it at length. You know, I don't know why I have to fight for things so hard and everybody else is just -- comes onboard. I'm sorry, I sound -- I don't mean to be -- COMMISSIONER COLETTA: I'm trying to help you with this. Believe me -- COMMISSIONER FIALA: I know. I can hear that. COMMISSIONER COLETTA: -- I feel like the red-headed stepchild all the time. Commissioner Coyle helps me with that issue all the time. Reminds me of the fact that -- where I am and who I am. COMMISSIONER FIALA: And I understand our finances. I understand our finances are bad. COMMISSIONER COLETTA: Let's talk about today before we get anybody else teed off here and try to get a vote through that's going to be most advantageous to the Marco Museum. Would you amend your motion for the 250-? COMMISSIONER FIALA: Yes. • Page 66 13A January 26, 2010 • COMMISSIONER COLETTA: Okay. And I'll change my second to that also, and no reference to funds coming from the Depot. COMMISSIONER FIALA: No. COMMISSIONER COLETTA: Meaning that you are not referencing the funds. COMMISSIONER FIALA: I'm not referencing. I'll probably crab about it a lot. COMMISSIONER COLETTA: But it doesn't mean you can't bring it up later. We're not going to talk about that now. COMMISSIONER FIALA: Okay. Right. COMMISSIONER COLETTA: Okay. CHAIRMAN COYLE: Commissioner Henning? COMMSSIONER HENNING: Well, I'm confused about this 250,000. I mean, we were talking -- well, if I start throwing out numbers, everybody's going to get confused, so -- it was 200,000 from icapital, 100,000 already gave from TDC, and the 50,000 from Mr. Hames. COMMISSIONER COLETTA: That's done, that money, the 100- and 150- (sic), we understand that's already on the table. COMMISSIONER HENNING: So this is a new motion. CHAIRMAN COYLE: We're throwing it away and you're not going to consider it. COMMISSIONER HENNING: Okay. Yeah, I don't know where we're getting by trying to pick on another museum. COMMISSIONER FIALA: No, I'm sorry. It's just that -- it's just that it seems that, you know, if we can do one, we should -- you know, I -- COMMISSIONER HENNING: The one is already done. COMMISSIONER FIALA: I'm trying to find a balance here. COMMISSIONER HENNING: The one is done. COMMISSIONER FIALA: Yes, it certainly is. COMMISSIONER HENNING: So we're not taking something Page 67 BA January 26, 2010 back, is you're making a strong statement. I would caution you on that. The -- you know, my -- I'm very much in favor of what three of us already discussed here, is 200, 100, and then the 50, so -- CHAIRMAN COYLE: Commissioner Halas -- Commissioner Fiala has a motion on the floor. COMMISSIONER FIALA: For $250,000, yes. CHAIRMAN COYLE: All in favor, please signify saying aye. COMMISSIONER FIALA: Aye. COMMISSIONER COLETTA: Aye. CHAIRMAN COYLE: All opposed, like sign? COMMISSIONER HALAS: Aye. CHAIRMAN COYLE: Aye. COMIVIISSIONER HENNING: Aye. CHAIRMAN COYLE: It fails, 3-2. We know, we absolutely know, that we can get the museum 40 $700,000 plus $80,000 worth of display cases. COMMISSIONER FIALA: By how; how would you do that? CHAIRMAN COYLE: Well, by taking the motion that Commissioner Henning has suggested and that both Commissioner Halas has indicated and I have indicated I would support. COMMISSIONER FIALA: May I ask the city council, now that -- what they're talking about doing is -- 100,000 has already been dedicated from the TDC? MR. POPOFF: Correct. COMMISSIONER FIALA: And -- okay. So it would be 300- -- no, I'm sorry -- 250,000 with the Cedar Hames thing -- 250,000. Would you still -- would you still donate 350,000? MR. POPOFF: Well, I would need to take that back to council. But the one thing that concerns me, I mean, Cedar Hames' donation, that's not the county's money, that's not Marco Island's money yet. And we're talking about money that may or may not happen. I mean, S Page 68 • 1 . A January 26, 2010 • he -- it was a wonderful, wonderful idea, and I'm certain that he'll do something, and we would be appropriate with that money. But I'm a little uncomfortable hearing a discussion about $50,000 that somebody outside of the county may donate. But once again, we totally appreciate this dialogue, okay. You're going to have a long day here, and we apologize for that. I think the ultimate goal is to get us to the 700-. And I believe that Marco Island City Council -- once again, I can't speak for the council till we vote on it, but I do believe that the council would step up. And I just ask you to do the best that you can for us. I really do. And Mr. Coletta, we understand how you feel. Thank you very much. CHAIRMAN COYLE: Did you want to make that motion? COMMISSIONER FIALA: No. CHAIRMAN COYLE: Does anybody want to make a motion for allocation of any funds? • COM1VIISSIONER HALAS: I'll make the motion that we give $200,000 of new money to the Marco Museum and they -- we -- the Historical Society has $100,000, so that's 350- (sic) and -- COMMISSIONER FIALA: No, 200- and 100- is 300-. COMMISSIONER HALAS: And I'm not sure -- I'll see where this motion goes if somebody seconds it. CHAIRMAN COYLE: Okay. Could I -- could I summarize that breakout and costs a little bit, and if you wouldn't mind a friendly addition, a suggested change. The Board of County Commissioners would allocate $200,000 from reserves. COMMISSIONER HALAS: Right. CHAIRMAN COYLE: And with the $100,000 of TDC funds that have already been allocated and the promised $50,000 from Mr. Hames and Paradise Advertising, that gives us a $350,000 match for the -- for the Marco Island contribution. Page 69 1 3 A January 26, 2010 But I would like to go a bit further and authorize the transfer of the roughly $80,000 in display cases, which although they're not entirely relevant to the first phase of the museum, they will be very necessary for subsequent phases of the museum. So I'd like to get that authorized to them before we find some other use for them sometime in the future. So that really gives $780,000 of value to the Historical Society and -- the Historical Museum, and then we -- and to Mr. -- Councilman Popoffs concern, if Mr. Hame and Paradise Advertising does not make the $50,000, I would certainly entertain a reconsideration by this board to make up the difference. So, I'm sorry. Would you accept that -- COMMISSIONER HALAS: Well, I just need a little more explanation about the $80,000. Where does this come from in the display cases? • CHAIRMAN COYLE: Ifs display cases that the staff has already identified and already set aside for use -- COMMISSIONER HALAS: Okay. CHAIRMAN COYLE: -- by the Historical Society and the museum, and their value -- the estimated value is about $79,000. COMMISSIONER HALAS: Okay. That's in my motion. CHAIRMAN COYLE: Okay. COMMSSIONER FIALA: Now, they'll have to replace those in a year and a half, so that means this will be coming back to us; according to this agenda, it says they'll be -- CHAIRMAN COYLE: I'm not sure that's true for all of the display cases. I think that's the diorama that you were talking about. MR. JAMRO: No, sir, that -- interpretative panels, the words on the walls and the various graphics. We would be doing those in-house. They wouldn't be laminated, they don't use archival inks., so any -- they do fade over time. And about a year to two years is their maximum, they start to peel and fall off. So they're not a 410 Page 70 13A January 26, 2010 permanent fixture. But the exhibit cases, some of those date back to 1988. CHAIRMAN COYLE: Well, there's historical quality in that. MR. JAMRO: And you said it very well, Commissioner. They will be needed to fill in as we move through the other galleries, and then eventually they'll be at museum number six, wherever that happens to be. CHAIRMAN COYLE: But was there a second to Commissioner Halas' motion? MS. FILSON: No. COMMISSIONER HENNING: Yeah, I'll second it. CHAIRMAN COYLE: Commissioner Henning seconded the motion. MR. OCHS: Mr. Chairman, I'm sorry. Before you take the vote, if the motion makers would also include authorizing the necessary budget amendments to release those funds out of reserves if this IV motion passes. COMMISSIONER HALAS: That's in my motion that we will take that money out of the reserves to address this particular issue. MR. OCHS: And authorize the budget amendments necessary to do that. COMMISSIONER HALAS: Exactly. MR. OCHS: Thank you. CHAIRMAN COYLE: And Commissioner Henning, is that in your second? COMMISSIONER HENNING: Authorize the budget amendments for those necessary funds to be transferred. MR. OCHS: Thank you, sir. CHAIRMAN COYLE: Okay. All right. Any further discussion? Did you want to make a comment? COMMISSIONER HALAS: Yeah, I just want to make a comment here. Let's hope that in -- the economic times in a year or so Page 71 • BA January 26, 2010 S get better, and then I think we can come back and readdress this particular issue once we -- once this nation gets back on its feet again, and hopefully we can address the shortfalls that Commissioner Fiala and Marco Island is -- that we're addressing today. Obviously it's not what everybody wanted, but we had to come to some type of a compromise, and we also have to look at what our other obligations are. But hopefully in the future this item could come back and be addressed before the Board of County Commissioners when times are better so that we can hopefully take care of the shortfalls. Thank you. CHAIRMAN COYLE: Thank you very much. Any further discussion on the item? (No response.) CHAIRMAN COYLE: All in favor, please signify by saying aye. COMMISSIONER FIALA: Aye. COMMISSIONER HALAS: Aye. CHAIRMAN COYLE: Aye. COMMISSIONER COLETTA: Aye. COMMISSIONER HENNING: Aye. CHAIRMAN COYLE: Any opposed, by like sign? (No response.) CHAIRMAN COYLE: Okay. It passes unanimously. Thank you very much. MR. OCHS: Mr. Chairman, that would normally take us back to nine, Board of County Commissioner appointments. You have some members in the audience for items under ten, so it's board discretion. CHAIRMAN COYLE: How quickly can we get through the next one? MR. OCHS: We probably -- let's just go to nine then, sir, and keep going. Page 72 co _ Sg' i 1 3 A 1.... 0 I _ N., , -1%, .00o4 g �•t � o' 1 $ 4-A L R s J4 i il 4 t 1 ,_. o , i v r t -IL 1.1 8 gi if m U Y-4- G D. ryr }X F a. - , t: , _ : ».. . 1 3 A Date:12/09/2010 To:Finance Department From Collier County Museum Check Amount$50,000.00 From 0"to*tetakAdvettising-11 Marbodag, Check Dated: 12/7/2010 theddl:5789 Deposit in Coiner County Museum revenue source: 314457490-36690040155 .4eters.149411110 Cildd flO PF4•41ED, P4 CiEMUALLI 'T-ACTVE PAP ER !-E PACK 0, 1149'ort orsEN1 F A I' 4 r 1r A-4T FMICLI WASH C. Paradise Advertising&Marketing,Inc. Realms eat* 5789 57i 150 Second Avenue Nodk Suits 800 MO 1st Avenue Souls St.Petersburg Ft. 33701 St.Peteteburg FL 33701 (727)821-5155 83-485431 PAY EXACTLY *********50,000•DOUARWAND'00CENTS DATE AMOUNT Dec 07,2010 ,$50,000.00 PAY TO THE OMAR Collier County Museums OF: 3327 Tamlami Trail East Naples,FL 34112-4909 (