Turlock Council City was split Tuesday evening on the decision to make the City of Turlock’s audit of the Convention and Visitors Bureau transactions and budgets from the last five years public before the final termination of the contract.
The City of Turlock released several documents on Friday related to the audit, which alleges that the Chamber of Commerce made several “potentially unallowable purchases” based on the CVB contract and would owe $241,297.07 in reimbursements back to the City. The items were released as part of the agenda, which was amended Friday to include a staff update on the winding down of the CVB contract.
Since 1991, the Chamber of Commerce has managed the CVB, which acted as the marketing-tourism arm of the City of Turlock. Last November, despite concerns from some councilmembers on the lack of stats and data provided with the proposal, Council approved a 2015 contract between the City and Chamber at $249,253.
A few months later, in February, the Chamber of Commerce sent a letter to the City of Turlock initiated at 90-day contract termination process. Two weeks prior, Mayor Gary Soiseth announced that City Council would be reviewing the contract and, if approved by majority vote, be putting the contract out to a competitive bid process.
During the process of the winding down of the contract, the City of Turlock chose to do a five-year audit of CVB expenses. That audit revealed a list of unallowable expenses and transactions, which was announced on Friday.
Councilmember Steven Nascimento argued that Council should have come to a final determination on the contract before releasing the documents.
“So in the meantime, I think we’ve harmed the reputation of an organization who represents a lot of the businesses in our community, who’s been a great partner to us in our community,” said Nascimento. “I felt like the timing of this, without giving the Chamber and CVB a chance to come back to us with an explanation to refute those potentially unallowable expenditures, was a bit unfair to them."
The winding down of the contract is still an ongoing process, as the City of Turlock has made time to sit down with the Chamber of Commerce to discuss the potentially unallowable transactions. Administrative Services Director Kellie Jacobs-Hunter said that the two groups met on Monday and plan to meet again on Friday.
“We’re just looking for the openness,” said Councilmember Amy Bublak. "We’ve asked consecutively for any invoices, anything to support expenditures and they gave us some. Then we asked again for more clarification and we got just a little bit more."
Transactions and expenses in question include both years of administrative costs that were more than were contractually allowed, according to Jacobs-Hunter, as well as tens of thousands of dollars in fixed assets, including computers, televisions, and printers, which need to be returned to the City of Turlock within 60 days of the contracts termination or the Chamber would be required to reimburse the cost of those items.
Councilmember Bill DeHart had several questions about what he originally believed were “unauthorized” purchases. Although Jacobs-Hunter did clarify the difference, DeHart shared the concerns of Nascimento.
“I think it is a worthwhile effort, but I think we need to emphasize utmost care and discretion with how we prosecute this,” said DeHart. “There’s real people involved and there’s business challenges involved."
Bublak, who was appointed to oversee the winding down of the CVB contract, said these items came to light due to the contract termination and had Council had to bring these concerns forward publicly due to the Brown Act.
“The reason it’s here tonight and in public is because three of you weren’t involved in this and to be fair with the Brown Act, we needed to do this,” said Bublak. “This isn’t about the reputation of anybody. This is just about expenditures and understanding what we’re going to do when we now take on tourism for Turlock."
While agreeing that the transactions and expenditures needed to be examined, Nascimento still disagreed with the process.
“Certainly we need to do a full accounting and any money that’s owed to the City, we absolutely need to have returned back to us, but the process in which we do that, I think, says a lot about this council,” said Nascimento.
Soiseth argued that this issue needed to be discussed transparently, which is something the mayor has pushed for since swearing into office.
“I issued the concerns that [Nascimento] had about the lack of transparency with this process — or perceived lack of transparency — which is why, after this letter, I felt it was appropriate to bring forward, not only to the five members of this council, of this body, but also to the public, to openly and transparently look at these documents,” said Soiseth.
“In other words, as public officials, we’re doing our jobs."
No action was taken by Council on the contract, as it was only a staff update on the agenda. As it stands, the contract between the Chamber of Commerce and City of Turlock will terminate on May 3.
With the termination date closing in, City Council also received a staff update from City Manager Roy wasden on the status of the request for proposal (RFP) the City is expected to put out for some services previously done by the Chamber of Commerce.
Staff is still in the process of determining which services will go out to a bid and which services will remain within City departments, said Wasden.
“What we had hoped would turn out in a very short time is going to take more time, more evaluation, maybe as much as a year of review on some of those items,” said Wasden.
That process has already begun, with the Parks, Arts, and Recreation Commission now in charge of distributing community grants, a job previously done by the CVB under the Chamber of Commerce.
While it is unknown what all will go out to a bid, Wasden mentioned minor contract will be put to bid for online and web services. Long term, the City of Turlock may find that marketing will be a contractual service, but that remains under review.
While CVB services will be going to through an extensive overhaul, Wasden ensured that those services would not be lacking, even in the short-term.
“No balls are being dropped,” said Wasden, adding that Director of Parks, Recreation and Public Facilities Allison Van Guilder is working with many groups on their events.
The discussion of the CVB contract is expected to continue at the regularly scheduled City Council meeting, as Bublak asked that the contract termination be agendized, in case everything is settled by then.