The Brown County Convention and Visitors Bureau (the agency that markets Brown County to visitors) and the Brown County Convention and Visitors Commission (the group that manages innkeepers taxes) both shared news last month related to the Brown County Music Center. Here’s a rundown of what happened.
CVB annual report
The Brown County Convention and Visitors Bureau reported an increase in website traffic along with successes related to social media and radio campaigns last year.
CVB Executive Director Jane Ellis and new CVB board President Debbie Bartes attended the Feb. 13 meeting of the Brown County Convention and Visitors Commission.
The report featured the CVB’s accomplishments and accolades, including Brown County making multiple top destination lists online and increased visitation in the visitors center by 9 percent in 2019, with 55,381 visitors walking through the visitors center doors.
Website traffic was also up by 42 percent, but Ellis accredited that jump to the CVB’s website hosting the Brown County Music Center’s site while they designed their own last year.
Innkeepers tax collection for 2019 was at $727,404.80, but that did not include collections from November or December, which were not available at the time of reporting.
Innkeepers tax collection for January through October 2018 was $735,116.23.
The 2019 report also noted that $29,393.24 in innkeepers taxes from Airbnbs and VRBOs collected at the state level were not recorded locally either at the time of reporting. The state now automatically collects innkeepers tax on any overnight stay booked through the online platforms.
Ellis asked if it would be possible for the county treasurer to ask innkeepers to include their monthly reports from Airbnb and VRBO, showing how much innkeepers tax had been paid that month, on their innkeepers tax forms.
“That way, the (county) auditor can look at those numbers and then go back to the state numbers,” Bartes added.
CVB budget concerns
The CVB has been operating on a line of credit since October due to not receiving innkeepers tax from the CVC.
“We’ve been on our line of credit since October. We’re paying interest when there’s money sitting in the innkeepers tax fund, and we’re not getting it. I’m trying to somehow get a handle on, how do we know when and how much we’re going to be getting?” CVB Executive Director Jane Ellis told the CVC on Feb. 13.
At the Feb. 13 meeting, the CVC approved transferring $65,000 of the innkeepers tax to the CVB. The CVB also received $75,000 in innkeepers tax this year. The CVB’s budget has previously been set at $712,500.
During last summer’s county budget hearings, CVC President Kevin Ault submitted the innkeepers tax budget for $950,000. But the council ultimately approved the CVC’s budget at the 2019 level, which was $800,000, with $660,000 going to the CVB and $140,000 being set aside to cover the Brown County Music Center’s mortgage payment if operating funds could not pay it all.
The innkeepers tax had been pledged to cover mortgage payments in that situation.
Ault said he will go back to the county council for additional appropriations, like he did last year, when the fund builds up. “We have to submit a claim, but it doesn’t have to go for approval before the county council. We have chosen to continue to do that just to be transparent,” he said about going before the council during budget hearings.
The council had asked the CVC to set aside enough money to cover the mortgage payments for the venue, which is $55,000 a month.
“Right now, there’s $120,000 in there (the innkeepers tax fund), so that’s why I submitted a claim for $65,000,” Ault said. A $55,000 cushion must remain in that fund in case the innkeepers tax has to cover the mortgage payments.
Ault said he would check with the auditor’s office because the budgetary status report for January shows the CVC starting the year with $276,000 and having $228,000 in expenses due to the venue’s $150,000 mortgage payment posting in January instead of December.
Last year, the music center mortgage line had $37,737 left in it, which was used along with $115,000 from the music center to cover the first mortgage payment before it was switched to monthly payments.
“What the auditor has not done is they’re still showing that as a deduction. We haven’t spent $228,000 this year. The only thing that came out of the innkeepers tax fund this year is your $75,000,” Ault explained.
At the Feb. 24 county council meeting, $37,737 was approved as an encumbrance from the “Maple Leaf” line in the innkeepers fund to cover that payment late last year.
Ellis expressed concerns about mingling innkeepers tax and music center money in the innkeepers tax fund to pay the mortgage payment.
“We’re really going to lose control of what’s being collected with innkeepers tax,” she said.
Ault said the mortgage is in a separate line in the innkeepers tax fund, but Ellis said the additional money from the music center to help cover the mortgage payment affects the total fund balance.
“That’s the way it’s set up. The State Board of Accounts put it into that because the innkeepers tax backs that up,” Ault said.
Ellis also asked how the music center determines where excess cash flow goes. Music center Co-President Barry Herring said the venue’s administrative agreement explains it. “Any excess above the mortgage goes next to establishing a $1 million capital improvement fund,” he said.
“We’re going to have to have money in the capital projects fund before we can pave the parking lot,” Ault added.
The music center will present quarterly reports on its financial situation, Herring said.
“I don’t know until I see a report that came from the auditor’s office that ‘Oh this money just went out.’ It would be nice to know ahead of time just for transparency purposes if nothing else,” Ellis said.
Ault said ultimately, it is up to the auditor to make sure the mortgage payment is paid out of the innkeepers tax, and it is done automatically, according to the documents set up by the venue’s lender.
The CVC fund will soon get money collected from the $1-per-ticket tax along with innkeepers tax. “That is held in the ticket tax line, so at some point, that money can be applied to the mortgage,” Ault said.
“If we do the 80,000 to 90,000 tickets, we’re going to have almost two mortgage payments just from that dollar tax,” Herring said.
Ellis said the uncertainty of how much she’s getting in innkeepers tax with each CVC transfer is rough on her budgeting.
“This is the first time we’ve seen anything. I’m sitting here running on a line of credit, trying to make ends meet and trying to launch a media plan, not knowing if I can pay my bills,” she said.
“I don’t know from month to month innkeepers tax, when we’re getting our money and how we’re getting our money.”
Recently, the music center’s management group approved proceeding with the purchase of a new sound system.
“OK here’s an expensive sound system that just came up that was unexpected. That is coming out of your operational funds, but does that moving around money take away from what was going to your mortgage fund?” she asked. “Then if you decide you do need more money to pay your mortgage because everything else has gone to something else, that’s where I see the concerns. … We’re getting to the point where we’re just kind of hanging on by a thread because of cash flow, and it’s getting harder and harder to move forward.”
Too many members?
The Brown County Council recently appointed Jim Schultz to the CVC, the board which manages the county’s innkeepers tax.
At the Feb. 13 meeting, CVC member Derek Clifford asked if having Schultz, Kevin Ault and Barry Herring all on the CVC would create a problem if the board has to vote on music center issues. Schultz, Ault and Herring also serve on the music center’s management group.
Schultz was not present at the Feb. 13 meeting.
“If there were to be a decision that would be a detriment to that facility, but the right decision, would this board make the correct vote based off of having three of the five members having as much passion (as they do)?
“Nothing against Jim personally,” Clifford said. “Even though he’s at-large on there, he was instrumental in the beginning with the creation of that facility.”
The CVC contracts with the CVB to market Brown County using innkeepers tax dollars. The CVC also manages innkeepers tax money to make sure there is enough to cover the music center’s mortgage payments if the venue isn’t making enough from ticket sales to do that.
“It does make sense then that there’s two entities that draw from the CVC money, and you’ve got the majority of a board also is on the board of one of those entities, but not the other,” CVB Board President Debbie Bartes added.
Clifford said that since the music center is a county-owned facility, it makes sense to have some people who are invested to be on the CVC and the management group, “to make sure that business succeeds so that it doesn’t tie into the true county funds and we’re able to uphold to the taxpayers of the county that we don’t use true taxpayer income or money to pay for it,” he said.
“It’s not like the CVC board votes themselves on. I’m just questioning,” he said.
The county council and the county commissioners appoint people to the CVC.
“It’s a hard conversation to have. I am not pointing the finger at anybody doing anything wrong, but if you think about it, we (CVB) don’t know financially what is going on with the music center,” said CVB Executive Director Jane Ellis.
Ault said that the music center will soon be presenting its budget after an audit on 2019 is completed.
Box office tickets
The Brown County Music Center will now set aside tickets for select shows to help those waiting in line at the box office get tickets.
“I want to make it very clear that we listen to the public, we listen to what we see on social and we understand the compassion the community had for a show like Willie Nelson,” BCMC Executive Director Christian Webb said at the Feb. 25 management group meeting.
“We have made an addendum on our Ticketmaster contract, which will allow us, the venue, on select shows the venue picks and chooses, to keep an inventory away from the general public and only allowed for the community that buys there at our box office on the first day of on sale.”
The tickets will only be set aside on the first day of sale for select shows. After the first day, any remaining tickets from that inventory will be released to the general public.
This means for future popular shows, the venue will be allowed to set aside a certain amount of tickets that can only be bought at the box office. The number of tickets for those shows has not yet been determined.
Tickets sold at the box office will be available from every price level to anyone who waits in line.
“It will be all price points, all locations, because you have to make sure every guest has an opportunity to get a certain price level,” Webb said.
Tickets are not just limited to the local community, but rather anyone who is at the box office on the first day tickets go on sale.
“None of those tickets can be bought by the secondary market, by ticket scalpers or whatever, so if you drive up to the venue, you’re going to get a ticket as long as you’re the first 100 (in line). We can establish what that number is,” management group Co-President Barry Herring said. “It’ll be some level of tickets; we haven’t decided yet.”
The venue is also putting four more ticket terminals in the lobby within the next couple of weeks, bringing the total up to six terminals, Herring said. This will allow for the venue to sell all tickets inside the venue when there is inclement weather.
Use of ticket data
The Brown County Music Center will use data on where tickets were bought for shows throughout the state and country to better target on advertising this year. BCMC Executive Director Christian Webb presented the data to the CVC on Feb. 13.
Due to ticket scalpers, Webb said it was important to not focus as much tickets sold in San Diego, New York City or Baltimore.
“We can’t disregard the unfortunate world that we live in with scalpers and secondary markets. That is extremely hard to track when we sell these tickets to these groups,” he said.
“I would rather focus on the 1,000 tickets we sold in Bartholomew (County) or the 400 tickets we sold in Monroe County.”
According to Webb’s report, 32,790 tickets were sold in 2019. In neighboring Bartholomew County, 1,023 tickets were sold for music center shows last year. Residents of Brown, Morgan, Johnson, Jackson, Monroe, Lawrence, Decatur, Marion and Hendricks counties also bought tickets last year.
At the Feb. 25 management group meeting, Webb reported that 31,344 tickets had been sold in 2020. For the first six shows of 2020, the venue sold 8,936 tickets. Of those, 6.27 percent were sold in neighboring Bartholomew County and 4.25 percent were sold in counties near Louisville, Kentucky.
Currently, the venue has tickets for 19 shows on sale.
Ticket sales data helped the music center create a “heat map” for where targeted ads should be directed, “to ensure the constant contact approach, which is something the venue hasn’t really done,” he said.
“As business leaders, or here in the visitors center, you want to make sure the people coming to Tesla or Warrant have ideas and the opportunities to book a hotel room, that the people coming into town from Cleveland or Omaha know the offerings we have here within the community. This data that we can dive into allows us to do all of that.”
This contact is part of spreading “brand awareness” for the venue, Webb continued, “because at six months being open, hearing people walk around the venue and looking at our show schedule, being like, ‘Did you know this person is coming?’ it really shows we haven’t done a good enough job yet of getting out in front of people to show them what we have,” he said.
“When we do that, we kind of cross-brand it and market it with what we have to offer: Places to stay, beautiful establishments to eat food in, and commerce.”
Webb said the venue is in its “infantile stages” with a “tremendous amount of work” needed in branding, vision and core values.
“We need to ensure that the customer service aspect of what we do is on par of other locations around the nation, because this isn’t an opener or it isn’t a garage band that’s playing. This is the Vince Gills of the world, the Willie Nelsons of the world, so we need to continue to grow that to not only give the experience to the artist, but also the experience (to the crowd) that comes into the building,” he said.
