The Charlotte Regional Visitors Authority board on Wednesday approved new rules aimed at reining in spending on entertaining and putting a stop to bonus payments from clients to employees.
The changes came in response to months of criticism over the authority's management, as well as concerns over financial losses at the NASCAR Hall of Fame.
The Charlotte City Council had twice voted to withhold $10 million in CRVA funding until changes were made, and council members only released the money after the board last month decided to hire a new chief executive.
The CRVA is also in the spotlight as the Democratic National Convention approaches.
In April, the Observer reported that the CIAA basketball tournament had earmarked $115,000 in bonuses to a CRVA executive over five years.
The transactions raised questions as to whether the money violated authority policies. The authority initially defended the payments.
In May, the Observer also reported that CRVA chief executive Tim Newman often spent heavily on thank-you's for nonclients, such as buying $4,600 worth of New York Yankees tickets for a party that included himself, the president of Johnson & Wales University and the publisher of Baseball America magazine.
Other spending included nearly $900 on a dinner for himself and three employees of Piedmont Natural Gas, as a thank-you for help in securing a gas convention.
The new policy sets a $100 limit for gifts for people who aren't clients, such as others in the hospitality industry.
Wednesday's policy changes were also part of the board's strategy to regain City Council's trust. A consultant hired by the CRVA board, PricewaterhouseCoopers, had said this year that the CRVA faced a "crisis of credibility."
The new CRVA policy also sets limits on how much salespeople can spend entertaining clients, such as meeting planners and members of groups considering coming to Charlotte for conventions. The cap is $150 per person, unless prior permission is given to spend more.
The new policy states that when entertaining "current and prospective clients ... (employees) are expected to do so in a prudent, cost-effective manner that secures business..."
Policy sets out limits
The amended policy wades into the nebulous world of spending money on people in the hospitality industry and business leaders who aren't considering bringing business to the city.
Newman has said that such gifts - such as tickets and dinners - were critical to the hospitality industry, to get local leaders excited about selling the city to the nation.
The amended policy states that "nominal gifts or tokens may be given to CRVA staff, clients or fellow representatives of the tourism and/or hospitality industry in recognition of community or business achievements."
For events such as a wedding or a retirement, no gift can exceed $50.
For "professional/business/community achievements," no gift can exceed $100.
The new policy refers specifically to clients, but it doesn't define who is and isn't a client.
CRVA board chair Joe Hallow said Wednesday it's OK for the CRVA to entertain business leaders when they are part of a larger group that includes clients.
"Clearly, having support of local business leaders really helps the sales process," said Hallow.
He said it's also OK to entertain business leaders when there aren't clients present, though he said that's more of a gray area as to how much the authority should spend.
It appears that sort of entertaining would fall under the strict limits of $100 per person.
Hallow said the amended policy directs employees to consult with a supervisor, and, in the case of the chief executive, to consult with the board.
The previous CRVA expense policy said that employees would be reimbursed for buying alcoholic drinks only if they were for a client. That provision was routinely ignored.
The new policy doesn't change that wording related to alcohol.
Newman lauds new moves
Newman said after the Wednesday meeting that the changes improve what is "already a great policy."
After the CRVA was criticized over the CIAA bonus payments, the CRVA defended the transactions, saying they were commonplace in the hospitality industry. Charlotte City Attorney Mac McCarley said the payments didn't violate CRVA policy.
The old CRVA policy said that employees couldn't receive money from outside the authority payroll. So the CRVA had the CIAA pay the authority, which then paid executive Ereka Crawford-Brim.
The new policy states that "no funds paid by a CRVA client will be earmarked for payment to a CRVA employee." It also said "at no time will a CRVA employee's compensation have a direct relationship to any financial arrangement the CRVA may have with a client."
If an employee's job duties for a client involve "an extended commitment," the employee's job duties and pay may be changed.
Changes to free ticket plans
The new policy also places limits on the amount of free tickets that board members can accept from the CRVA. The authority often has free use of a suite at the Time Warner Cable Arena and its 16 tickets.
When the tickets aren't used for clients, board members often snap them up.
One former board member used 75 tickets in a two-year period - a perk worth thousands of dollars.
The new policy says that board members can only accept four free tickets per event. If they want additional tickets, they must pay for them.