Week of Dec. 11-17, 2000

New CVB Board Report "Puts To Rest" Dispute

By Harry Saltzgaver,
Executive Editor

A report from top board executives at a Convention & Visitors Bureau board meeting next week should "put to rest" a controversy that has plagued the agency for six months, officials said.

Board Chair Chris Pook, Chair-elect Joseph Prevratil and Chief Financial Officer Jim Gray all will report about changes in procedures since an erroneous sales report was discovered in August, Pook said.

That report, overstating future hotel room bookings by about 35,000 nights (in a total of 350,000), was given to the board as part of that annual report and resulted in payment of $24,000 in bonuses.

The CVB board will hear that new reporting software is in place, as are increased computer security measures and an automatic audit trail. The staff organizational chart has been streamlined, outside consultants are conducting ongoing team-building efforts to improve the work environment and new communication protocols between senior management and the executive committee are in place. Finally, an outside executive search firm has been contracted to find a new vice president of sales.

When the error was discovered, an independent audit was begun and City Auditor Gary Burroughs was called in to consult. After the audit showed that the bookings were unsubstantiated, the board asked CEO Linda Howell-DiMario and then-vice president of sales Tom Dorsett to repay their portion of the bonus.

About $19,500 of the amount, paid to individual sales representatives, was not repaid.

Pook, who took over as board chairman on Oct. 1 from George Medak, appointed Gray to lead a review of the CVB's financial reporting procedures and Prevratil to deal with a "personnel audit."

In mid-October, Dorsett left the agency after negotiating an agreement that included confidentiality.

"Hopefully, we'll close the book on this on Dec. 21," Pook said last week. "Of course, every book has one bad chapter. This process has been extremely painful for a number of people. But I believe we will emerge as a far stronger company as a result of it."

Howell-DiMario, who has led the CVB through seven years of growth, came under public fire because of the error. She said that as CEO she accepted responsibility for the problem, but that she did not know the numbers had been falsified when she gave the report to the board.

"I should emphasize that this was an internal sales goal report," Howell-DiMario said. "This is not a document hotels use to make their plans, or that is used by convention bookers. Those reports have been and will continue to be accurate... Nobody was hurt by this but us."

Prevratil said the working atmosphere at the CVB already has improved considerably, and that the team-building process was working.

Pook said that he continues to support Howell-DiMario, and that he expects the full board will do the same.

"There will be no further personnel moves," Pook said. "We have an excellent CEO, an excellent marketer and promoter who understands how to market Long Beach. I believe we can move forward now."

Gray, president and CEO of Generations Bank and a banker for decades in Long Beach, said that most of the policies and controls recommended by Burroughs in his final report already are in place. Those changes range from the simple -- requiring specific passwords for specific sensitive files -- to the complexities of a new reporting software program -- thus eliminating manually prepared reports -- and having an external control of codes to change programs.

"What we have done is tried to remove the opportunity to do anything less than straight-forward," Gray said. "We've instituted documentation policies, a new audit trail and the like. It's mundane stuff, but it needed to be done.

"We should remember that the CVB's record, even including the bump in 1999 has been extraordinary. Did they do it alone? No, of course not ... But in terms of what CVBs do, they are among the top of the field. They deserve a great deal of credit."

The Long Beach CVB is charged with marketing the city to tourists and attracting conventions here.

This fiscal year, the city will pay $3.7 million, about 77% of the CVB's total budget. That money comes from bed tax revenues generated through a tax on hotel rooms. Revenue from the bed tax topped $10 million citywide last year.