A&P sets cap on reserve funds

The El Dorado Advertising and Promotion Commission has set a minimum and maximum range for its reserve coffers, capping off a months-long discussion about what to do with a $1 million revenue surplus.

During a regular meeting Feb. 4, commissioners agreed to establish a $400,000 reserve fund with a $250,000 floor, per a recommendation from Commissioner Paul Choate, who is also a member of the El Dorado City Council.

“Anything over $400,000 is excess funds,” Choate said

He noted that the city of El Dorado is required to maintain a reserve fund that covers three months’ worth of operating expenses.

“We generally have more than that in the bank because we never know what capital expenditure is coming at us,” Choate said. “We can do capital expenditure if we wanted to spend some money in the park system but right now we’re very, very fortunate to have the El Dorado Works tax out there doing that type of projects for us.”

Commissioner Alan Meadows referred to previous comments made by Choate, saying, “But there may be things out of the box that this commission has not entertained, that we could be doing that … because obviously, we’re thinking about our processes, our RFPs (requests for proposals) and so we may need to open ourselves up to just a completely different way to promote or support projects that we never even thought about.”

“I think my comment was if you come to the table with a good idea, we need to be smart enough to listen,” Choate said. “We also need to look at what we’ve been doing and what works and what doesn’t work in this process too.”

Setting aside $400,000 would leave the commission with excess funds of more than $500,000, with which the commission could “operate,” Choate said.

Additionally, Choate said he believes

hotel revenues are going to increase in the coming months, pointing to the anticipated opening of the Haywood boutique hotel, which is under construction in downtown El Dorado as part of the MAD entertainment complex.

The hotel is expected to open in the spring.

Commissioner Dianne Hammond, also a member of the city council, said the A&P commission has traditionally maintained a reserve ahead of the following year because of uncertainties about annual revenues.

The commission draws its revenue from a 3 percent lodging tax.

“Did we discuss that any point or … ?” Commissioner Barbie Luther asked.

“No, it’s just something that, a practice that we kept in place,” Hammond said.

A decade ago, separate accounts were maintained for an operating budget and a reserve fund for the A&P commission, Choate said.

“If we’re going to do something, we need to call it a reserve fund because everything we’ve got in the bank right now is excess revenue,” he continued.

Commissioner and A&P Chairman Barry Bagwell suggested that the funds be maintained in an interest-bearing account.

Choate suggested that the cash be broken down into several accounts in increments of 12-. nine-, and sixmonths and 90 days and allow local banks to bid.

Choate pointed to the city ordinance establishing the A&P commission, saying that the ordinance, which is based on state statute, allows for “funds credited for the city advertising and promotion fund … may be used, spent or pledged by the commission … on and for construction, reconstruction, repair, maintenance, improving, equipping and operation of public recreation facilities in the city, including but not limited to facilities constituting city parks.”

Choate also said there has been some discussion about creating a local convention and visitors bureau, noting that the excess funds could be applied to such an endeavor.

“We could, quite possibly, seek professional help or even hire an employee to do the same thing a CVB would do at the A&P level — maintain the commission, we don’t have to reinvent the wheel,” he said.

”In light of the $1 million surplus, the commission previously agreed to a 2020 operating budget of $360,000 with $260,000 going to RFPs.

Previously commissioners distributed RFP funds to:

• The Boomtown/Murphy USA Classic, $4,000.

• The Boomtown Opry, $20,000.

• The Downtown Business Association, $10,000.

• El Dorado Festivals and Events/MAD, $158,500.

• Main Street El Dorado, $20,000.

• Mayhaw Festival, $6,000.

• The South Arkansas Community College Foundation for the Outdoor Expo, $3,000.

• The South Arkansas Symphony Orchestra, $30,000.

• The El Dorado-South Arkansas Coin and Currency Show, $2,500.

• VR 360, a “community request” for a virtual video tour to promote El Dorado, $6,000.