Valdez City Council Work Session – VCVB Budget and Future Direction – December 3, 2025

The Valdez City Council held a work session on December 3, 2025, at 6:00 PM to discuss the Valdez Convention and Visitors Bureau (VCVB) budget, audit results, and organizational direction. The session was led by VCVB Executive Director Faith Harris, who presented multiple budget scenarios and responded to council questions. Council members expressed concerns about the VCVB's fiscal health, the lack of clear performance metrics, and the sustainability of a $505,000 funding level.

Discussion Items

• Audit Presentation: Harris reported that the 2024 audit was completed with “flying colors” – no significant accounting policy issues, no unusual transactions, no indication of fraud, and no difficulties with management. The VCVB committed to a September 1 delivery deadline for all future audits.
• Budget Scenarios: Harris presented an “a la carte” budget requested by the city, showing three main options: operating solely as a CVB (Visitor Center), solely as a DMO (Destination Marketing Organization), or a combined minimum/status quo. The $505,000 grant (approved by council earlier) was the baseline. Harris emphasized that a CVB-only operation could balance the budget with added sales, but a DMO or combined role would require additional funding to avoid net losses. She noted that the original $562,000 request had been reduced by council to $505,000, forcing significant cuts.
• Financial Trends: Councilmember Love highlighted declining financial health: net assets fell from $178,000 in 2023 to $146,000 in 2024, and cash reserves dropped from $208,000 to $52,000 as of October 2025. Harris explained the drop was due to the cancellation of the boat raffle fundraiser (which had expected profit), prepaying the 2026 visitor guide ($85,000), and increased payroll costs after filling staff positions. She argued that nonprofits do not necessarily build savings, but Councilmember Love and others pushed for a balanced budget and rebuilding reserves.
• Performance Metrics: Several council members (Devons, Green, Whitty) requested clear, measurable deliverables and annual reports. Harris noted that past reports were not always provided (e.g., no 2023 annual report existed). The council asked for quarterly check-ins, key performance indicators (e.g., guide distribution, website traffic, event attendance), and a written contract with defined deliverables.
• Role of the VCVB: Council debated whether the VCVB should focus on both visitor center services (CVB) and destination marketing (DMO). Harris and board president Ms. Stronk argued both are essential, but the $505,000 budget can only support a CVB. The council majority (Mayor Fleming, Councilmembers Love, Devons, Green, Whitty) indicated support for $505,000 as the maximum, preferring a CVB focus with potential for future growth if metrics show success. Councilmember Whitty suggested reducing pay raises (from 4.something% to the city standard 3%) and moving more guide content digital to save costs, but Harris pushed back, stating staff are underpaid and paper guides remain popular.
• Special Request: Councilmember Whitty asked Harris to recuse herself from all VCVB and public accommodations tax discussions due to a perceived conflict of interest (her other role). Council ruled the request invalid as there was no direct financial gain for Harris.
• Statewide Context: Harris provided comparative data showing that similar organizations in Sitka, Homer, Seward, and Whittier have revenue in the $500k–$900k range and often operate at a net loss. She cited statewide declines in tourism occupancy (down 5-8%) and noted that the VCVB’s performance (occupancy down only 1.3%) was better than peers. She also highlighted the importance of the visitor guide (39,000 physical copies distributed worldwide plus 10x digital reach) and the growth of short-term rentals (approx. 100 Airbnbs in Valdez, generating potential tax revenue of ~$91,000).

Key Outcomes

• Council directed the VCVB to develop a final draft budget based on the $505,000 grant that balances to zero or builds a small reserve. The budget should clearly define what services (CVB, DMO, or combination) can be delivered at that funding level.
• The VCVB must also produce a set of measurable deliverables and performance indicators (e.g., visitor guide usage, website analytics, event attendance, member satisfaction) to be presented at a future work session before any final budget resolution is adopted.
• The council and VCVB agreed to hold quarterly meetings to review progress, discuss challenges, and adjust operations as needed.
• No formal vote was taken; the council expects the VCVB board to approve the revised budget and bring it, along with proposed deliverables, to a subsequent work session (date to be scheduled). The final budget will be enacted via a council resolution.
• Councilmember Devons suggested that if early quarterly results show success, a request for a small additional stipend later in 2026 could be considered, but other members (Green, Whitty) preferred to wait for a full year of performance data.