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Chamber provides documentation to reduce unallowable CVB expenses by $55K

POSTED May 8, 2015 7:18 p.m.

The Turlock City Council will consider paying an outside firm to do a more comprehensive audit of the Convention and Visitors Bureau on Tuesday. The City is alleging that the Turlock Chamber of Commerce owes $186,015.60 for unallowable expenditures under the contract to run the CVB, which is roughly $55,000 less than the City originally asked the chamber to repay on April 24.

In February, the Turlock Chamber of Commerce submitted a letter of resignation to terminate services to operate the CVB, an organization that is taxed with bringing tourists to town. The CVB is funded by Transit Occupancy Tax dollars, or money generated when visitors stay in local hotels.

In closing out the contract with the Chamber for the CVB services, the City of Turlock performed an audit dating back five years. In documents released on April 24, the City alleged the audit found the Chamber spent money improperly according to the contract. The contract between the City of Turlock and the Chamber of Commerce states: “The Chamber shall manage a CVB which shall be a part of Chamber but a separate corporation for accounting purposes only.”

On April 24, City Attorney Phaedra Norton sent Chamber President and CEO Sharon Silva a letter that states that 43 expenditures in the past five years did not qualify as permissible.

“Based upon the City’s preliminary determination, it appears that the total amount due to the City from 2009 through 2014, including potentially unallowable expenditures/journal entries/ transactions is $241,297.07,” reads the letter.

Audit documents provided by the City show that CVB dollars were spent on Chamber items including $10,000 “for various Chamber events funding” in 2013; $1,353 for “Best of Turlock stuff” in 2010; and $7,000 for “map to pay for scholarships” in 2009. The City also requested information for “unallowable expenditures” on electronics and travel costs amongst other items.

After the City and Chamber convened on May 1 to further discuss the closing out of the agreement, the Chamber provided sufficient documents to verify $55,281.47 worth of expenditures thus reducing the amount the city is requesting to $186,015.60.

“If there is more documentation presented it could further reduce the expenses considered unallowable at this time,” said Administrative Services Director Kellie Jacobs-Hunter.

The Turlock City Council will convene on Tuesday to determine if it will accept or reject the preliminary internal audit as well as how to proceed, which may include conducting an external audit that the city manager recommends. A City Council Ad Hoc Subcommittee would also be established to oversee the formal audit and assist in the process along with the City Attorney and Administrative Services Director.

Also on Tuesday, the Turlock City Council will:

-          Review the City of Turlock 2015-2016 and 2016-2017 proposed General Fund Budget and Municipal Services Budget in preparation for budget adoption.

-          Consider amending the Turlock Municipal Code regarding cross-connection control and backflow prevention devices.

-          Consider approving the consent calendar which includes a number of items such as increasing the amount of total compensation for the architecture firm for phase two of the Turlock Regional Transit Center Design and Master Plan as well as granting Alta Planning + Design an additional three months to complete the city’s Active Transportation Plan.

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