VisitDallas will eventually get out of purgatory, but we may have to wait another six months or more for the City Council to decide whether to send it to the good or bad place. The agency’s contract expires next September, and Council will need to vote on whether to cut and run or renegotiate.
Until then, VisitDallas must prove its worth. If it doesn’t, some around the horseshoe want it gone.
“I think it’s time you realize who your boss is,” billowed West Dallas Councilman Omar Narvaez on Wednesday, just as things had perhaps turned a bit chummier than at previous VisitDallas reckonings. “Your boss is the city of Dallas.”
On Wednesday, Council heard from VisitDallas leadership and city staff about how it plans to immediately correct the problems exposed by that disastrous January 4 city audit. (Short version: it wasn’t tracking how it was spending public dollars, it had poor metrics by which to hold it accountable, and its highly-paid CEO had a thing for buying pricy Tumi backpacks through the agency.) They presented an amended contract and a new board structure.
Council wants a functioning organization that markets the city—and not the region—to outsiders. This is crucial because the visitor’s bureau spends massive amounts of Hotel and Occupancy Tax revenue each year that could go toward other ends. In fiscal year 2019, it was $19.3 million. It also received $18.2 million through the Tourism Public Improvement District, a tax on hotels with at least 100 rooms. That is oh-so-close to funding the entirety of VisitDallas’ budget, and yet for years nobody has had a clue what’s happening under the roof.
When the city auditor’s office looked, they found what this magazine called a “well-run trough for piggish top execs,” a culture where the already highly paid CEO could spend—and spend unchecked. There were no real metrics to measure his performance or that of the organization. VisitDallas was even commingling its HOT and TPID funds. That is against state law; it has since been fixed and now remains only a testament to the madhouse. There was also the question of why neither the city nor VisitDallas’ massive board were holding its executives’ feet to the fire.
Now we get a glimpse of how VisitDallas plans to immediately address the shortcomings. If Council finds the amended and restated contract good enough for now, it will pass it at a meeting in November. That would also give the city something of a test run before the real decision comes up next year. At this point, staff is still recommending entering contract negotiations with VisitDallas. The alternatives are putting the contract out to a request for proposals (which has never been done successfully with a visitor’s bureau, according to Assistant City Manager Joey Zapata) or going the way of Houston and creating a limited government corporation to oversee a new VisitDallas.
“If we’re on the right path than hopefully we’ll get back to the Council and get a renewal by May,” says Zapata.
Here are the changes the organization is vowing in the meantime:
Smaller Board. There were 55 members before. There will be 21 now, so long as the 55 members approve the change at a board meeting set for Thursday. The asterisk: VisitDallas will create a Leadership Council on which many of the old board members could sit. Leadership Council members can serve on many of the same committees as board members, such as marketing and the diversity and inclusion committees. These folks will not be allowed to sit on the government, finance, or executive committees, interim VisitDallas CEO Sam Coats said during a break for lunch Wednesday.
During the briefing, Coats said the Leadership Council would allow VisitDallas to keep many of its existing board members in their sphere and filter them into board spots as those staggered, three-year terms expired. But some Council members wanted a fresher start. Southern Dallas Council member Tennell Atkins took issue with the large number of board members who live outside Dallas, similar to how former CEO Phillip Jones was a resident of Southlake.
“If you continue with the same makeup, you may continue with the same problems,” added Pleasant Grove Council member Jaime Resendez.
Improved Metrics and Reporting. Dallas has revamped the way it will keep tabs on VisitDallas. The nonprofit agreed to several new accountability measures. VisitDallas will have to submit its budget and a strategic plan with specific goals by March 1, with the ability to adjust mid-year. It will also submit an end-of-year report containing data on both marketing dollars spent and its economic impact (in other words, proving a return on investment). And each year on May 1, it will receive an annual review of its procedures for how it documents money coming in and going out, the makeup of its board, the compensation of its leaders, and the incentives of its employees.
Arts and Culture. Regardless of whether Council chooses to re-enlist VisitDallas’ services long-term, the city is headed for some heated debate over its distribution of hotel occupancy tax funds. Currently, VisitDallas takes 30 percent, while Arts and Culture receives just 2.6 percent. The arts community and several Council members support taking those dollars from the bloated visitor’s bureau and boosting arts funding. The Cultural Plan wants 13 percent of the hotel tax. (The state allows cities to set aside up to 15 percent for arts funding.) Until then, the amended contract calls for VisitDallas to devote a sliver of their own total toward arts and culture—0.9 percent.
Retainage. The city has traditionally withheld 2 percent of VisitDallas’ hotel tax funds until the organization fulfills what the contract requires, a practice called “retainage.” That number ticks up to three percent under the amended contract, and the city might actually have the metrics in place to hang on to the money if VisitDallas doesn’t come through. That’s a potential for about $600,000 a year; staff suggested putting it toward the Convention Center or deferred maintenance at Fair Park.
Dallas Film Commission. The amended contract gives this to VisitDallas. The city’s economic development office previously oversaw its operations. The commission markets Dallas to the film industry, as a destination for film festivals and as a place to film movies.