Mike Carter - 29th DistrictChattanooga Convention & Visitors Bureau officials say they are on board with letting the state comptroller audit the organization's financials.
This week, the Tennessee General Assembly passed bills sponsored by Todd Gardenhire, R-Chattanooga, and Mike Carter, R-Ooltewah, that require the comptroller's office to take a peek at how the CVB uses the hotel-motel tax revenues it receives from Hamilton County. That annual amount now is $7.8 million.
The move will become law once Gov. Bill Haslam signs off on it.
As written, the proposed law does not specifically target the CVB, but it calls for the comptroller to "audit expenditures made from proceeds of the hotel-motel tax levied by Hamilton County" at the expense of the recipient of those funds. Since 2007, Hamilton County has given 100 percent of its hotel-motel revenues to the CVB.
"We welcome the audit and support it," CVB President and CEO Bob Doak said Thursday, echoing comments he recently made to county commissioners.
Carter said he believed "good folks" run the CVB, but that does not mean they should be above financial review.
"I sponsored this legislation because they receive over $7 million in county funding and we need independent audit of how they use those funds," he said. "Public expense should require a public view."
Carter said he limited the scope to Hamilton County because a statewide application would have generated a lot of opposition from tourism bodies across the state. That doesn't mean it couldn't catch on elsewhere, he said, citing support he had received from other lawmakers.
Gardenhire voiced similar thoughts driving the proposed law, adding he would like to see reviews of public money given to Erlanger Health System.
Last month, Gardenhire described the CVB expenditures on its annual gala luncheon as "lavish."
"They spent a ton of money," he said. "I'm sitting there thinking, 'I don't know how this benefits tourism.'"
Haslam indicated he would give his OK on the legislation, but kept any other thoughts he had on the matter to himself.
"The governor is [deferring] to the will of the legislature on this bill," Haslam press secretary Jennifer Donnals said in an email.
Hamilton County Commissioner Tim Boyd, who has scrutinized the agency's spending in recent months, praised the legislation.
"I think this reinforces the fact that we need a closer watch on CVB," Boyd said. "They need a transparent and accountable audit to take place."
Last week, Doak told commissioners they could review bureau records, but he refused Boyd's request to release any of the bureau's internal financial documents - labeled "working papers" - to the media. County officials have said working papers, by state law, are not public record.
Doak said CVB officials feared such a release would compromise their marketing and business plans, but Boyd said he saw no such plans while reviewing a binder full of the agency's financial records.
When Boyd referred to working paper figures in a report he published on March 29, a CVB attorney quickly fired a warning shot across the commission's bow, citing Boyd's "blatant violation" of statutory confidentiality rules. Future breaches of confidence could result in legal action, the letter said.
Boyd contended Hamilton County Attorney Rheubin Taylor had counseled him that he could discuss information in the working papers, he just couldn't share the papers themselves.
Doak, when questioned by Mayor Jim Coppinger, assured commissioners it was never the intent of the Convention & Visitors Bureau to pursue litigation over the matter.
State audits aside, Boyd said he still seeks to amend the county's funding to CVB. He recently announced intentions to divert $2 million of hotel-motel tax money to build a sports complex next to Howard High School.
Boyd also said he wants to require any agency that receives 30 percent or more of its operating budget money from the county to be subject to the same public record requirements as the county.
"It only takes four more votes on the commission," Boyd said.
Commissioner Joe Graham has said he would not support cutting the CVB's cash flow, which bureau officials said has generated more than $1 billion in tourism for the city. He did say officials should consider using the money for big tourism projects once the hotel-motel revenue stream reached $12 million annually.
Several tourism industry leaders voiced concerns that CVB money cuts would have a negative impact on their businesses and the community.
Contact staff writer Paul Leach at 423-757-6481 or pleach@timesfreepress.com. Follow him on Twitter @pleach_tfp.