Audit reveals resort association’s long-standing challenges | SierraSun.com

Audit reveals resort association’s long-standing challenges

The North Lake Tahoe Visitor's Center in Tahoe City, Calif. on Dec. 21, 2016. The building, which also houses NLTRA's offices, was constructed in 2012 to improve guest services within the region.

When Placer County staff announced on May 3 that they were proposing changes to their contract with the North Lake Tahoe Resort Association, some called the move sudden and out of the blue, but county documents show that in 2015 an independent audit of the organization revealed multiple breaches in their contract.

"Of the 16 Procedures performed, only two were performed without exception," said Placer County Deputy County Executive Officer Jennifer Merchant in a May 2015 letter to the NLTRA. "It is important to note that many procedures could not be properly performed because the Resort Association failed to collect, maintain, and provide records consistent with contract requirements."

Since the association was created in 1995, it has determined how the region's transient occupancy tax, a 10 percent tax on overnight lodging, is spent by reviewing grant applications and recommending to the county which of those projects should receive funds.

The organization considers transportation and infrastructure improvements, in addition to marketing the region as a resort destination, but county staff recently proposed the creation of a new committee to review grant applications. If approved by the board of supervisors, the proposal would leave the NLTRA solely focused on marketing.

During a May 3 public meeting at Granlibakken Resort, NLTRA board members and commenters accused the county of making the proposal with little to no warning, but documents show the association's practices have been in question for years.

"In 2015, a third party firm was hired to look at their contract and what was required in that contract and whether they were meeting the standards," said Placer County Senior Management Analyst for Lake Tahoe, Erin Casey.

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Accounting firm Vavrinek, Trine, Day & Co. was hired to examine the NLTRA's procedures for the 2013-14 contract period.

The audit identified 13 procedures in need of immediate correction, including the need for the association to implement a competitive bidding practice for expenditures exceeding $25,000 and create a record of all vendors paid including the amount and a description of the work.

"In August 2015, we made some changes to their scope of work," Casey said. "In some cases, the county took responsibility for some things the association had been managing, like transportation contracts."

The board of supervisors approved the changes to the NLTRA's contract at their Aug. 18, 2015 meeting.

NLTRA Executive Director Sandy Evans Hall said that since the 2015 audit, the organization has worked to improve its procedures.

"Since our organization had not been given any prior examples of the type of contract that the County wanted, we created a contract template that met the County's needs, developed a contract compliance check list, adopted policies that ensured contract compliance, and went through contract changes that increased County oversight," she said in an email. "Then through our Organization Structure Review process, we identified some areas that made sense to change, such as the County taking over the contracts with TOT applicants while the NLTRA could do what it does best such as coordinate a robust public process to encourage grant applications."

Casey said that since then, the county has been tracking some of those efforts and monitoring whether the association has improved the problems identified in the audit. She said that some improvements have been made, but some of the challenges identified in 2015 have continued ever since.

"We continue to see issues that are concerning," Casey said. "We continue to work with the organization and in some cases we see improvement, but not all."

She said that the audit and progress on it are part of the reason that county staff proposed the current changes to the resort association's contract, but are not the only reason.

"I would not say it is entirely the reason, by any stretch. … but it is a factor," she said. "It is our responsibility to ensure transparency and accountability for tax payers' dollars."

Casey also said that the county has been recently meeting with the resort association to address some of the issues and come up with a contract proposal together.

"We are currently working with the executive board to address some of the concerns that have been raised," she said. "Ultimately a contract will need to go before the board of supervisors by the end of June because the resort association's contract expires June 30."

Amanda Rhoades is a news, environment and business reporter for the Sierra Sun. She can be reached at arhoades@sierrasun.com or 530-550-2653. Follow her on Twitter, Facebook and Instagram @akrhoades.