Mayo Civic Center Governance & Model Update

Mayo Civic Center Governance & Model UpdateDecember 10, 2018

Council Meeting

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• Recap direction from 11/28 Council session

• Review steps and criteria for governance model decision � Council consensus on criteria in each step

• Provide model direction�City run CVB & MCC�Separate non-profit entity running both CVB & MCC

• Discuss timeline for execution

Today’s Agenda


Goals of New Model


• Singular Mission and Vision• Industry Leadership

1 Alignment in Focus

• Authority of Board• Fiduciary Responsibility

2 Accountability

• Unified Team• Seamlessness

3 Clear Goals &

Objectives

• Customer Centric Focus• Nimbleness and Flexibility

4 Service Delivery

• Measurement & Metrics5 Deliver Results

Top Priorities for the future MCC Model

Council Consensus

on Priorities

Council asked specific questions to be addressed as to the legal possibilities of the following:

1. Can the City serve as the CVB?� Yes.

2. Can council appoint the board of private non-profit entity?� Yes.

3. Can the entity be required to comply with the State’s open public records act?� Yes, by contract.

4. Can Council require the State’s conflict of interest policy (or specific portions of) be adopted by a private non-profit entity?

� Yes, by contract.

5. Can the Council limit/approve/allocate the budget out of hotel tax?� Yes.

6. Can the Council mandate specific, regular communication and reporting from a private non-profit entity?� Yes, by contract.

Legal Consultation on Options


Steps to Determine a Model


• Step 1: Governance Fundamentals

• Step 2: Board Responsibilities

• Step 3: Board Composition and Competencies

• Step 4: Executive Director Responsibilities

• Step 5: Goals and Performance Metrics

• Success Factor Comparison

• Execution Timeline

Council suggestions from 11/28 will be discussed in the respective steps.

Items include:Ability for Council to appointment Board members

Required conflict of interest policyRequired metrics

Required transparencyRequired communication to Council

Contract termsConsideration for Rochester Sports

Regardless of model, the following are critical components of the governing body

Step 1: Governance Fundamentals


• Fiduciary responsibility

• Accountable to City Council

• Quality and expert oversight

• Transparency

• Conflict free

• Reduce City risk

Regardless of model, the following are critical components of the Board’s responsibilities

Step 2: Board Responsibilities


• Align resources to achieve City Council defined goals and metrics

• Develop annual budget for City Council approval

• Adherence and performance to budget

• Achieve and surpass performance expectations

• Required, regularly set communication to City Council

• Balance economic impact, MCC fiscal results, and community impact

• Hire and supervise Executive Director

Regardless of model, the following are critical components of the Board’s composition

Step 3: Board Composition and Competencies


• Criteria

�Business acumen

�Financial and budget knowledge

�Sales and marketing background

�Data driven

� Industry and community leadership

�Willingness to assume accountability for success

• Potential seven seats

�Tourism/Hospitality industry expertise (3)

�Hotel-specific (2)

�Partner industry representation – Mayo Clinic (1)

�Cultural community representation (1)

Board Members Cannot be: Vendors;

a competing facility; direct recipient of hotel tax funds

Regardless of model, the following are critical components of the Executive Director’s responsibilities:

Step 4: Executive Director Responsibilities


• Oversee one high performing team

• Foster a spirit of partnership

• Adhere to the requirement in transparency and reporting

• Develop a strategic marketing, sales, and operations plan

• Partner with community service providers to leverage resources and reduce duplication

• Utilize data and analytics to drive decisions

Regardless of model, the following are critical components of the Executive Director’s responsibilities:

Step 4: Executive Director Responsibilities (cont.)


• Implement a robust customer satisfaction program

• Adhere to booking policy�Ensure desired mix of business is achieved �Achieve agreed upon balance of economic impact, MCC fiscal performance, and community impact

• Maintain a high quality MCC �Capital planning

• Maximize return on all sales and marketing efforts�Key priorities for destination marketing

• Drive sales activity and conversion

Regardless of model, the following are critical components for future goals and performance metrics:

Step 5: Goals and Performance Metrics Examples


• Fiscal performance�Fully insulate the City’s risk – capital reserves and operating needs�Manage fixed and variable expenses�Optimization of the MCC

• Economic impact�Room nights generated�Direct spending

• Community/civic engagement�Access to MCC�Programming

Each year the Executive Director would develop a plan to

achieve the desired metrics.

The following are critical factors for success and how each model compares.

Success Factor Comparison


Factor City Operated Non-profit

Customer centric X XCommon mission X XUnified team X XTransparency X XStreamlined processes X XReduce City Risk XNimble and flexible XIncentivized management and sales team XIndustry network X

Per City Council’s request, the following are sample items that could be included in a contract with a non-profit entity.

1. City Council shall appoint the board members based on criteria and applications received.

2. The entity must comply with the State of Minnesota’s open public records law with the following sample components:� Board meetings will be open to the public� Client deal terms can remain confidential� Individual employee salaries and incentives can remain confidential

3. The entity must deliver the services required for a fixed dollar of the hotel tax with no additional requests for support from the City Council.

4. The entity must maintain an operating and capital reserve with an expectation of annual contributions.

5. The entity must present to the City Council specific reports via dashboard monthly and the Executive Director must present quarterly on progress to annual goals as well as year-end.

Additional terms will be vetted with City Administration and approved by Council.

Desired Contract Terms


Execution Timeline

© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 14Red with dark outline is an area where Council has approval

Project Timeline and Milestones

2019

Task / Month Jan. Feb. March April May June July Aug. Sept. Nov. Dec.

City Run ModelRewrite Mission and VisionCreate Advisory Industry BoardDevelop MetricsDevelop GoalsCreate City Positions for CVB StaffDevelop and Finalize BudgetHire Department DirectorsOnboard StaffDevelop Marketing PlanDetermination on Rochester Sports InclusionNew City Department Fully Functional

Private Non-Profit ModelDraft Mission and VisionNominate and Approve BoardComplete/ Reconstitute BylawsDevelop MetricsDevelop GoalsDraft and Approve ContractDevelop Staffing PlanDevelop and Finalize BudgetHire ED/CEODetermine Private Operator DirectionRFP Process for Selection of Private OperatorDevelop Marketing PlanHire StaffDetermination on Rochester Sports InclusionEntity is Fully Functional

Develop Department

Mission and VisionCreate Advisory Industry Board Develop Metrics Develop Goals

Develop Organizational Chart - staffing

guidelines

Create City Positions for CVB Responsibilities

Develop and Finalize Budget

Hire Department Directors

Develop Marketing, Sales and Operations

Plan

Development Performance Measurement

Reporting System

Hire New Positions

Develop Robust Customer

Satisfaction Program

Determination on Rochester Sports

Inclusion

New City Department Fully

Functional

Execution Timeline


City Run Model

Draft Mission and Vision

Nominate and Approve

Board

Complete/ Reconstitute

BylawsDevelop Metrics Develop Goals

Draft and Approve Contract

Develop Staffing Plan

Develop and Finalize Budget

Hire ED/CEODetermine

Private Operator Direction

RFP Process for Selection

of Private Operator

Develop Marketing, Sales and Operations

Plan

Determine Incentive Plan

Develop Performance Measurement

Reporting System

Develop Robust Customer

Satisfaction Program

Hire StaffDetermination on Rochester

Sports Inclusion

Entity is Fully Functional

Execution Timeline


Non-profit Model

Red outline denotes where Council is involved


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Documents

Mayo Civic Center Governance & Model Update