Under pressure, Visit Mesa weighs reforms

Jan. 2—Visit Mesa, the City of Mesa's primary tourism development partner, is considering organizational reforms six months after two board members resigned to protest the nonprofit's handling of a $60,000 corporate golf membership.

This month, a recently created governance committee presented Visit Mesa board members with proposed bylaw changes designed to increase confidence in transparency and oversight over expenditures.

Visit Mesa Board Vice Chair Dennis Kavanaugh said at its last meeting, the board recommended sending the bylaw changes to the city for comment prior to a potential vote in February.

In all, there are nine proposed bylaw updates, the most notable being an executive committee seat appointed by the Mesa city manager, a reduction of board members from 35 to 25, a permanent Board Governance and Policy Review Committee, and a discussion about revoking the Visit Mesa president/CEO's voting rights on the board.

In addition to the bylaw changes suggested by the governance committee, City of Mesa leaders have requested additional actions.

In August, Kavanaugh and board chair Carl Grupp met with Mayor John Giles and City Manager Chris Brady to discuss "our concerns regarding recent actions taken by the Visit Mesa board," according to a letter Brady sent to the leaders after the meeting.

Kavanaugh described the August meeting as "very positive and productive."

The letter, which the Tribune obtained through a records request, summarized the main points from the meeting.

It said Visit Mesa leaders agreed to cooperate with a third-party audit of current governance policies and procedures. The audit would be overseen and paid for by the city.

The mayor and city manager also requested a review of Visit Mesa's procurement rules by Mesa's chief financial officer to ensure they "provide for transparency and oversight of all expenditures." The city also requested to appoint one member of the executive committee.

The pressure from city leadership came in the wake of the July resignations of Mesa Chamber of Commerce President Sally Harrison and businessman Rich Adams from the board.

The departures culminated a quarrel sparked by the corporate golf membership to Las Sendas Golf Club, which raised concerns for Adams about Visit Mesa's governance and oversight structures.

The golf membership was not initially brought to the Visit Mesa board for approval and a board member faced resistance after requesting a copy of the contract.

When the membership was eventually put to a vote, an executive board member connected with Las Sendas did not recuse herself, Adams said.

Adams' told the Tribune after his resignation that he was especially troubled by the perceived mistreatment of the board member who first raised questions and pressed Visit Mesa leadership to see the Las Sendas contract — a request that is still unfulfilled.

"The board environment should encourage thought-provoking questions, constructive critique, and debate in a non-retaliatory environment," he wrote in his resignation letter.

A "grandiose" $45,000 board retreat in a Tucson-area Ritz-Carlton in August added to Adams' sense that the organization's fiduciary oversight needed tuning.

Visit Mesa Board Chair Carl Grupp told the Tribune after the resignations there was nothing improper about the golf membership.

He said it would be used by Visit Mesa sales staff to entertain site selectors interested in booking events in Mesa. He said the membership was eventually approved by a large majority.

"This is a board that's always been very transparent," he said.

He also denied any mistreatment of the board member who first raised the issue, now-Economic Development Director Jaye O'Donnell.

Visit Mesa and the city are independent entities, but the city is its largest partner by far.

Mesa's roughly $4 million annual contribution is nearly 70% of Visit Mesa's $5.7 million budget.

The city has a contract to transfer a large share of the city's bed taxes to Visit Mesa for tourism promotion through June 2025.

Brady told Mesa's Economic Development Advisory Board this month he wants Visit Mesa to maintain its independence, but he thinks the city should have a bigger seat at the table.

"There's very few organizations ... where we allocate that many resources without having a significant process or involvement," he said. "You're making sure the city has at least some opportunity to participate in decision-making."

He used the analogy of the Phoenix-Mesa Gateway Airport, where for a lower annual contribution — $1.7 million — the city has one of six seats on the board and considerable influence.

Brady gave the update on Visit Mesa at the December Economic Development Advisory Board at the request of board members.

Multiple Economic Development Advisory Board members have taken an interest in Visit Mesa's governance concerns, not just Adams and O'Donnell, who are both members.

The board's Visit Mesa discussion was agendized according to open meeting laws, but Kavanaugh told the Tribune he wished he was invited to attend the discussion.

Brady told the Economic Development board the procurement policy review by Mesa's CFO is going well and the city is close to issuing a Request for Proposals for a review of Visit Mesa's governance and operations.

He said he was hoping to see the executive committee seat ratified by Visit Mesa in early 2024, something Kavanaugh said is on-track to happen.

"There is no opposition to have a city representative to be added to the executive committee," Kavanaugh said in an email.

Economic Development board member Brian Campbell pressed Brady multiple times on whether the city would look into specific incidents, such as the golf membership purchase, to determine if there were conflicts of interest or other breaches that occurred.

"I know there's been a lot of suggestions that we should do that," Brady said. "The mayor and I talked, we said, 'No, let's step back and look at more broader policies.' Because the question is, are there policies in place? And are they being followed?"

He said the city's focus would be addressing "structural issues" to "avoid these things in the future," not delving into past incidents.

Asked if Mesa's funding could be used as leverage for reforms, Brady said he "doesn't like pushing those nuclear buttons."

He said the city could terminate Visit Mesa's contract with a 90-day notice, but "nobody wants to go there."

Brady says he's got a lot of support from the city council to lean on Visit Mesa for changes.

"It's not about the city manager's request. It's the City of Mesa requesting," he said.

Mike Hutchinson, who sits on Visit Mesa's executive committee, was upbeat in November about the review of Visit Mesa's governance procedures and its prospects for the future.

"Organizations need to look at their policies and procedures regularly," he said. Visit Mesa is "a well-run organization. The board is good. People are interested."