The Turlock Chamber of Commerce will pay the City of Turlock $202,500 in reimbursement for funds misspent during the last five years of the 24-year span the Chamber operated the city's Convention and Visitor's Bureau. The Chamber and City agreed on the reimbursement — and the terms of repayment — after months of negotiations that included a contract compliance audit by an outside accountant.
“This agreement has increased our financial accountability to both the taxpayer and the business community,” remarked Turlock Mayor Gary Soiseth in a released statement. “As public officials, we hold ourselves to a higher standard of transparency and accountability. Unfortunately, in this case, this high standard was not met by both parties between 2010 and 2014.”
The reimbursement agreement recognizes that previous leaders of the Chamber and City did not follow the express financial guidelines established under the CVB contracts. The $202,500 reimbursement, however, is over $185,000 less than the amount that Kemper CPA Group found the Chamber to have misspent during its contract review.
The Kemper report found that the Chamber of Commerce exceeded the Council-approved budget to run the Convention and Visitors Bureau in 2010, 2012 and 2014 for a total of $48,139.80. The report also included 105 transactions with a value of $233,722 over the past six years that did not have proper documentation.
According to the report, other questionable expenses included $54,600 over the years to publish a Chamber Directory and $51,780 for official city maps.
The report also found that the Chamber did not submit annual financial reports, as mandated by the agreement to run the tourism board.
"They are out of compliance with the agreement because they never made any financial reporting...they did annual reports [where] they kind of summarized what their activities were, but there were never any actual financial reports of what their actual expenditures were or comparisons to the budget," said Kemper Group partner Lammert Van Laar, during his report to the City Council in September 2015.
A released statement about the reimbursement agreement acknowledges "substantial disagreement between the City and the Turlock Chamber of Commerce regarding the interpretation of the parties’ contract." The agreement does, however, allow the two agencies to move forward from their dispute.
“With this agreement, the Chamber and the City reaffirm the importance of a strong relationship between the City and the Chamber of Commerce. The Chamber exists to support Turlock’s business community, and to work with the City in connection with business development, expansion and retention,” said Chamber Chairman Lazar Piro.
The terms of the reimbursement agreement allow the Chamber to pay the City $675 a month for 25 years. The City will also receive free membership to the Chamber over the next quarter century.
“I look forward to this next chapter in our decades-old partnership,” stated Soiseth. “It’s in the best interest of Turlock’s residents to maintain a working relationship between the Chamber of Commerce and City Hall, so I will be presenting this tentative agreement to the City Council for consideration."
The reimbursement is expected to go before the City Council for approval at their March 1 meeting.
The Convention and Visitors' Bureau contract was one of the first to be scrutinized under Soiseth's campaign pledge to review every contract the City has with third party entities to ensure compliance and financial viability.
The City Council is expected to create a competitive bid process for services previously rendered by the CVB — including marketing, branding and select event services — by the summer.