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LR forms team to investigate visitors bureau

Dubious accounting, outlays merit look, city board decides

By C.S. Murphy

This article was originally published January 23, 2007 at 6:31 p.m. Updated December 29, 2006 at 6:00 a.m.

Little Rock leaders appointed a team of City Hall lawyers and financial advisers Thursday to investigate the city's troubled Convention and Visitors Bureau.

The group, to include City Manager Bruce Moore and City Attorney Tom Carpenter, is to report its findings to the city Board of Directors by Jan. 30 and provide recommendations by Feb. 13.

After a six-month investigation, the Arkansas Democrat-Gazette reported earlier this month that the bureau, funded largely with tax dollars, frequently has failed to follow local bidding laws and its own purchasing policies.

The review by the newspaper also found that bureau leaders improperly channeled tens of thousands of dollars in public revenue to businesses owned by members of the Advertising and Promotion Commission, which governs the bureau.

Thursday's resolution, passed by the Little Rock Board of Directors during a special meeting called earlier in the day, also included a Jan. 10 deadline to report to the board whether the bureau, which has a $12 million annual budget, is out of compliance with city fiscal procedures.

"I think the answer to that one is going to be yes," Carpenter said.

City Director B.J. Wyrick failed to get support to go into an executive session to discuss in detail whether to ask commissioners to resign.

Commission Chairman Mary Beth Ringgold resigned Saturday, and former commissioner Bruce Bennett resigned earlier this month after questioning the bureau's financial accounting and purchasing practices.

Mayor Jim Dailey and City Director Dean Kumpuris, who have seats on the city board and the commission, voted against the executive session, along with City Directors Gene Fortson and Michael Keck. Wyrick and City Directors Genevieve Stewart and Joan Adcock and Vice Mayor Brad Cazort voted for the session, which required six votes of support.

"We worked very hard to be very responsive to the citizens and open our books so that everyone knows we're aboveboard," Wyrick said earlier in the day.

"This whole issue has done a lot to tear down the progress we made."

Dailey's commission term expires at the end of the month when he leaves the mayor's office. Dailey apologized Thursday for "errors and policy failings" at the bureau.

"This casts a shadow of doubt on the bureau, the commission and, some would say, city government," Dailey said. "I want to accept my share of responsibility."

Kumpuris' commission term also expires Sunday.

Kumpuris didn't say Thursday whether he'll seek another term.

The commission is responsible for collecting a 2 percent tax levied on hotel accommodations and restaurants and known colloquially as the "hamburger tax."

The tax generates more than $8 million annually.

Adcock asked Thursday whether there would ever be an end to collections of such tax.

"At what point do you get enough?" she asked.

Dailey responded, "There's not a policy in place that says when the surplus gets to be too much."

Kumpuris said money the bureau doesn't spend on operations and payroll goes into marketing the city.

"Tourism is an industry we need to work on because it goes to the bottom line of the city," he said.

He also said at Thursday's meeting that the bureau had decided not to renew a lease for space at the Pyramid Park office building in west Little Rock. After the meeting, Kumpuris said the office had already closed and employees had relocated to downtown bureau offices.

Bureau Chief Executive Dan O'Byrne couldn't be reached Thursday evening for comment about the office closing.

However, Thursday night there were no apparent signs that the office had closed. Christmas wreaths remained hanging in the window.

Commissioner Blair Allen's family owns the building and has collected $3,090 a month since September 2005 for extra office space that the bureau rents. The bureau entered into the lease agreement without following local bid laws or its own policy governing purchases for amounts below the bid law threshold of $25,000.

Allen disclosed to the commission his family's interest in the building and abstained from voting on the office space rental.

Wyrick said she and other city leaders want drastic changes at both the bureau and on the commission.

"[Ringgold]'s resignation was just the end of the snake. We've really just been chopping at the tail. Now it's time to get to he head of the snake," she said. "We obviously appointed the individuals, but I don't know if we can unappoint them."

Carpenter told the board Thursday, however, that city directors are powerless to fire bureau staff or kick out commissioners.

Fortson said he's given city Finance Director Bob Biles a list of questions he has about the bureau's audits.

"I think we've got some other problems if [the newspaper], through [Freedom of Information Act], discovered some expense accounts and abuse of credit cards," he said.

"An auditor should have discovered it. We obviously have some administrative problems."

The bureau's regular annual audits have called for tighter spending controls and more accountability.

The 2003 audit recommended that the agency improve internal accounting controls, increase oversight of the accounting office, require executives to begin providing itemized receipts for credit-card purchases, and implement a code of conduct.

The 2001 audit cited similar issues and recommended that the bureau limit staff access to accounting computer files and payroll records and reduce access to cash deposits.

Keck tried to sum up public concern over bureau financial operations Thursday.

"With lack of guidelines in place, I think some spending has been, for lack of a better word, extravagant."

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