Good times for the LVCVA may translate into a $7.7 mil. windfall

Wednesday, Oct. 27, 1999 | 10:49 a.m.

The Las Vegas Convention and Visitors Authority may get an additional $7.7 million to spend in its 1999-2000 fiscal year. Most of it would buy television advertising.

The LVCVA board of directors will consider a resolution to amend the budget at next month's meeting after the measure was approved by the board's audit committee at its quarterly meeting Tuesday.

Revenues are higher than expected because visitation has been up and most of the LVCVA's funds come from room taxes collected by hotels.

LVCVA Finance Director John Horn told the committee several expenditures were not completed at the end of the fiscal year that ended June 30. As a result, the audit committee routinely reviews revenues and expenditures and makes adjustments in budgeted revenues and appropriations.

It also rolls over bond funds approved in previous years for the agency's capital expense budget.

The resolution approved by the audit committee that will be considered by the full board increases general fund budget appropriations by $7.7 million and the capital funds budget by $31.2 million.

The agency's Marketing Department has requested $6.4 million of the total for television advertising.

Rossi Ralenkotter, vice president of marketing, said $5.3 million would be spent in emerging domestic markets for Las Vegas. They include Portland, Ore.; St. Louis; Atlanta; Seattle; Indianapolis; Miami; Minneapolis; and Boston. That total also would fund a millennium marketing program in seven markets and an ethnic market television campaign.

The other $1.1 million would be spent on TV ads overseas. Ralenkotter said TV ad buys are planned in Germany, Japan and Great Britain to coincide with increased and anticipated air service from those countries.

In the 1998-99 fiscal year, the LVCVA spent $48.7 million for marketing -- about one-third of the budget. The Marketing Department is getting most of the extra funds because its budget was chopped when the 1999-2000 fiscal year budget was adopted.

Most of the $31.2 million rolled over in capital projects funds came from land acquisition and building funds approved in bond issues from 1993 and 1996. Agency officials have said they would use some of those funds for its South Hall expansion project.

The budget resolution also authorizes an additional $500,000 be spent for legal fees. LVCVA President Manny Cortez said the amount goes into a legal fund and isn't itemized for any particular case.

For the past three months, the LVCVA has been defending itself in court against the Venetian hotel-casino. The Venetian's parent company, Las Vegas Sands Inc., challenged the agency's ability to issue bonds without a public vote for the $250 million convention center expansion. District Court Judge James Mahan ruled in the LVCVA's favor, but the Venetian says it will appeal.

The LVCVA doesn't have an estimate on how much the Venetian case has cost so far. Legal counsel Luke Puschnig said it would be about a month before costs would be tallied and that total could go even higher if there is an appeal.

The rest of the expenditures are for more than 100 purchase orders on items ranging from keyrings to golf balls.

In other action, the committee also received two audit reports, one from the LVCVA's internal auditor and another from the agency's outside independent auditor.

Internal auditor Jon Reese told the committee the agency is in the process of modifying some of its travel policies following an analysis of expenditures from 1996 through 1998.

A revised policy due to take effect next month would require traveling staff members to take lower fare flights when offered through the travel agency contracted by the LVCVA. Reese said the travel analysis found that staff members rejected lower fare options 37 times out of 43 trips resulting in higher travel costs of $9,811.

The committee also received a four-page report from Piercy, Bowler, Taylor & Kern, an accounting firm contracted as the agency's independent auditor.

Richard Bowler of the firm said auditors found the agency to be in compliance with state laws, regulations and contracts.

The only criticism the firm had was that a Marketing Department line item for team meetings was $280,000 over budget -- about 5.5 percent. Because the whole department did not exceed budgetary limitations, the auditors recommended monitoring specific line items closer.