NEW PORE'
BEACH
& COMPANY
Dear Markus:
Received After Agenda Printed
February 13, 2024
Item No. 4
I want to thank you for your partnership over the last several years with our Tourism Business Improvement District. As you know, it was created during the Great Recession to assist us in better competing in the meeting and conference marketplace and to secure more group business for Newport Beach. Looking back, I think we can say that goal was accomplished as we have booked over 600,000 group nights for the city that, likely, would not have chosen us without this additional support.
As we now evolve from a TBID to our new Meetings Assessment Partnership (MAP for short), we are escalating our efforts as the meetings industry continues to become even more competitive. We chose to privatize this effort to give us more flexibility and to permit our sales leadership to focus on bringing business to the city instead of compiling with governmental requirements that come with managing the TBID.
Additionally, increasing our assessment from 3 to 5% will provide an even more robust collection of benefits that are designed to not only SAVE our partners money but to generate more business. We have heard from many of our sales leaders that with fewer resources at the property level, there was a need for MAP to step up and provide more ways to assist you, including assistance with trade show travel and more incentive booking dollars. Please note that our combined TOT and MAP assessment will total 15%, which is lower than many surrounding communities, including Huntington Beach, which is currently increasing its assessment to 6% and a combined collection of over 16%. Cities like Anaheim, Los Angeles, and San Diego are at similar collection levels. We do not feel this increased level puts us at a competitive disadvantage.
To give you a better idea of how that additional 2% will be used, I've attached a sheet (which we called TBID Plus before renaming to MAP) with benefits that you will enjoy effective February 1, 2024.
Please know that these resources are here to support you better. But what will not change is the commitment from our team to design specific sales strategies around you and the needs of your specific property. While we have many MAP benefits, they are highly customized to assist your property depending on your market segmentation.
In addition, please know that our governance will not change. All MAP General Managers will continue to oversee the program and approve its budget and annual goals.
All that really changes is the percentage from 3 to 5% and where the monthly check is sent. Instead of remitting to the city as you did with the TBID, the check will be sent to us directly.
Please mail this check to:
Lily Pearson
VP Finance
Newport Beach and Company
1600 Newport Center Drive, Suite 120
Newport Beach CA 92660
You can also email Lily directly to coordinate wire transfers of the funds. She can be reached at IilvB-newaortbeachandco.com
You can continue to remit in arrears as before (For example, October's MAP remittance would be due Nov 30, just like you pay the city for TOT payments). Our attorney has also said that if you list "TBID" on your guest's folios, you can keep using that term as is if it is easier for you.
Please find the attached agreement for your signature. We will need to have it returned by January 30, 2024, if you desire to remain in the program. Otherwise, all sales programming for your property will cease, effective February 1, 2024.
Thank you again for your support of this program. Our goal is to make this transition as easy as possible for you. Should you have any questions, please contact either Michelle Donahue at 714/697-1622 or myself at 949/784-9758.
1 hope your New Year is off to a wonderful start!
With regards,
Gary Sherwin
President/CEO
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The lessons learned by co -mingling tourism designated
funds elsewhere... and the pain it causes
By GARY SHERWIN
The last few months have been tough times for our tourism friends in Anaheim and Irvine. In fact, it's probably been more than tough. It's been downright ugly.
Unless you've been living under a rock, you've probably heard of the sad situation in Anaheim. Mayor Harry Sidhu resigned in disgrace from office in 2022 and subsequently pleaded guilty to obstruction of justice and wire fraud charges involving a sweetheart deal to sell Anaheim Stadium to the Angels. The whole thing has been hugely embarrassing for the city.
This week, state auditors slammed both the City of Anaheim and Visit Anaheim in a report they issued on spending and oversight, which, if you know the backstory, seems a bit overwrought. 0 ( https://stunewsnewport.com/wp-
content/uploads/2024/02/Gary-Sherwin-pic.jpg)
Click on photo for a larger image
Courtesy of Visit Newport Beach
Gary Sherwin
What exactly were Visit Anaheim's sins? They were drawn into this when, during the depth of the pandemic, Sidhu reached out to the organization and offered a $6.5 million lifeline grant to help offset the decline of revenues, given that more than 50 hotels and Disneyland had shut down for months. Sounds like a generous gesture, right?
As part of the deal, Sidhu asked the CEO of Visit Anaheim to take $1.5 million of the grant and give it to the city's Chamber of Commerce since he claimed they needed financial assistance, too, given the shutdown.
The problem, of course, is that the Chamber is actively involved in legislative affairs with the city and Disneyland, which could be considered a huge conflict of interest.
But here is where it gets very interesting. Normally, an organization like Visit Anaheim giving long- standing, life -sustaining financial support to a Chamber would be unusual, perhaps improper.
However, Visit Anaheim has been financially supporting the Chamber for over a decade to the tune of hundreds of thousands a year. Why is that?
The City Council mandated that they do it.
When Visit Anaheim formed its Tourism Business Improvement District (TBID) in 2010, the City Council forced the organization into granting a concession by making them financially support the Chamber for the next 30 years (yes, you heard that number correctly) if they wanted the TBID to pass.
Visit Anaheim and their hotels didn't want this provision, and they pushed back. However, the council made its views clear. Support the Chamber or no TBID. The Visit Anaheim board was forced, against their better judgment, to take the deal.
So, since then, Visit Anaheim has been receiving TBID revenues of more than $20 million a year, which is an assessment paid exclusively by the hotels for the purpose of tourism promotion. The Chamber, which had been in financial straits, gladly took the cash and even leased office space at the Visit Anaheim offices.
And so it went for more than a decade. When Mayor Sidhu called and offered the pandemic bailout, Visit Anaheim incorrectly assumed that this was a continuation of existing policy and gave the $1.5 million to the Chamber because that's what they have always been doing.
To be fair, the recent Anaheim council wasn't completely onboard with the $6.5 million grant, but the mayoral arm twisted his colleagues, and it got passed. Many of them were unaware of the earlier deal to make the TBID happen until the scandal involving Sidhu came to light.
The Anaheim Chamber also had its own share of problems during this time beyond finding revenue, including with their CEO, who misstated income so he could qualify for a home loan as well as a host of other crimes and later pleaded guilty to four federal charges and now faces 20 years in prison. He was also implicated in the alleged bribery scheme which some pundits called the "Anaheim Cabal." The whole mess has caused disgrace for a whole slew of people as well as cost many of them their jobs.
But ultimately, here's what it boiled down to. The former Anaheim City Council in 2010 meddled with tourism funding and politized it. Instead of permitting the Anaheim hotel community to assess themselves so they could generate more business for the city, they pushed the hotel community to use the funding mechanism to prop up an organization that served them politically. That is not how TBID funds — or, frankly, any tourism funding — should ever be used by elected leaders.
The scandal involving Visit Anaheim didn't have as much to do with them as much as a longstanding backroom deal that the tourism industry was forced into by an overbearing council at the time.
And what's with Irvine? There's a similar thread here too. Irvine also has a Tourism Business Improvement District but, in this case, the funding mechanism was managed by their Chamber of Commerce. Destination Irvine, as it is called, was a department of the chamber, and it received all the funds generated by the TBID.
The problem here is that instead of taking all those funds generated by the hotels that were to be used for marketing, the Chamber took a disproportionate amount of the money to fund themselves and their overhead. In other words, they basically misused TBID funds for non -tourism -related expenses like chamber salaries.
The good news here is that the Irvine hotels woke up early last year and saw what was happening.
They witnessed their TBID money being looted and complained to the city and then asked the council to remove the chamber from managing the program. The city happily compiled.
For now, Destination Irvine is housed at Irvine City Hall until it can reorganize as an independent organization in the future. The Irvine hotels are currently hands-on involved, and their $2.5 million in TBID money is being spent the way it was intended ... to promote tourism and generate business for the city.
The latest development is that the county District Attorney is investigating the whole affair.
How does this compare with what is happening in Newport Beach? For starters, neither the City of Newport Beach nor Visit Newport Beach is propping up our chamber, which is already the most financially successful chamber in the county based on their own good business efforts.
Secondly, Newport Beach's hospitality community oversees the tourism marketing in the city, and we avoid the corrosive hand of political influence like Anaheim has been dealing with. There just aren't any parallels between the Anaheim situation and Newport Beach.
The biggest lesson of all is that hospitality leaders from the hotel community should be the ones in charge of how tourism dollars are spent and allocated. TBID, and even Transient Occupancy Tax (TOT) dollars, are generated by the hotels. Those hoteliers who live and breathe this business every day know how to best spend those dollars, including the 18% allotment of the 10% TOT that the city provides Visit Newport Beach.
No one wants tax or marketing resources wasted, but local hotel and hospitality leaders have the best idea of what appropriate spending looks like, certainly not some non -tourism Irvine Chamber executive or an Anaheim city councilmember.
Politics are a destructive force in tourism marketing, and letting non -tourism -related officials dip their hands into these funds usually turns out very badly for everyone involved, including elected or self- serving leaders who choose to go where they shouldn't.
Gary Sherwin is President & CEO of Visit Newport Beach and Newport Beach & Company. ( https://bit.ly/48ftzo2)
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It's crucial to establish a strong relationship with your primary care provider to ensure lasting effects on your health. Dr. Kocharian, an internal medicine specialist with Greater Newport Physicians Memorial Care, understands the vital role a primary care physician plays in supporting patients in the new year.
Dr. Kocharian says, "Guiding my patients through their health in the new year is a collaborative process where personalized care and a strong doctor —patient relationship are key. We work together not just to treat ailments but to provide proactive, individualized care for a happier, healthier year — and beyond" Primary care physicians like Dr. Kocharian help patients by providing comprehensive care that includes preventive care such as routine check-ups, immunizations, and the early detection of diseases. They also help manage chronic conditions including diabetes, asthma, and hypertension, and by promoting healthy lifestyle choices like diet and exercise, as well as monitoring medications and their patients' progress throughout their health journey.
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The ongoing relationship between a patient and their primary care physician is fundamental in fostering a proactive approach to health, rather than merely reacting to illness when it arises. It is not just about treating sickness but also about promoting overall wellness and supporting patients in their health journey — a task in yyhi � priary caare sicians like Dr. Kocharian, backed by a robust health system like Greater Newport mP11 i re — play an indispensable role.
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City of Anaheim
It Has Not Properly Managed Tourism -Related
Contracts and Millions of Dollars in Related Funds
January 2024
niah
•T�
REPORT 2023-133
C) CALIFORNIA STATE AUDITOR
621 Capitol Mall, Suite 1200 1 Sacramento I CA
916.445.0255 1 TTY 916.445.0033
For complaints of state employee misconduct,
contact us through the Whistleblower Hotlin
G� 1.800.952.5665
Don't want to miss any of our reports? Subscribe to our email list at . • • l�
For questions regarding the contents of this report, please contact our Communications Office at 916.445.0255 This report is also available online at www.auditor.ca.gov I Alternative format reports available upon request I Permission is granted to reproduce reports
Grant Parks State Auditor •
Mike Tilden Chie De ut �■
f p y
January 30, 2024
2023-133
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As directed by the Joint Legislative Audit Committee, my office conducted an urgent audit of the public funds that the city of Anaheim disbursed to two private nonprofit entities —the Anaheim Chamber of Commerce (Chamber) and the Anaheim and Orange County Visitor and Convention Bureau (Visit Anaheim). The city entered into contracts with and disbursed more than $> oo million to Visit Anaheim, and the Chamber received from both the city and Visit Anaheim more than $6 million in public funds from fiscal years 2012-1.3 through 2021-22.
In general, we determined that the city lacked a meaningful contract monitoring process and did not properly manage the contracts it entered into with these entities, resulting in unallowable spending and unmet deliverables.
In one case, Visit Anaheim subcontracted with the Chamber to provide work related to promoting Anaheim's tourism and convention industries. Visit Anaheim did this without the required written permission from the city and absent appropriate oversight from the city. The Chamber then used some of these funds for unallowable services, including advocating for or against proposed federal, state, and local legislation and supporting resort -friendly candidates through its political action committee. Furthermore, the Chamber could not demonstrate that it provided Visit Anaheim with three of the > o agreed -upon services we reviewed from 2018 through 2022, such as holding meetings with local businesses.
In another circumstance, Anaheim awarded a $6.5 million contract to Visit Anaheim to perform economic recovery activities during the pandemic when Visit Anaheim already had millions in estimated unspent public funds intended to fund similar services. Among the recommendations we have made for the city to improve its contract monitoring policies and procedures is for it to seek to renegotiate its largest contract with Visit Anaheim to allow for more effective oversight.
Respectfully submitted,
GRANT PARKS
California State Auditor
621 Capitol Mall, Suite 1200 1 Sacramento, CA 95814 1 916.445.0255 1 916.327.0019 fax www.auditor.ca.gov
iv CALIFORNIA STATE AUDITOR
January2024 I Report 2023-133
Blank page inserted for reproduction purposes only.
CALIFORNIA STATE AUDITOR v
January2024I Report2023-133
Contents
Summary 1
Audit Findings
The City of Anaheim Contracted With Two Nonprofit Entities to Promote Tourism and Related Business Development Opportunities 3 Public Funds Paid for Some Unallowable and Undelivered Services 7 The City of Anaheim Performed No Meaningful Oversight of Its Contracts With Visit Anaheim or the Anaheim Chamber of Commerce 15 Other Areas Reviewed 21
Recommendations 23
Appendix A
Scope and Methodology
25 Appendix B
Visit Anaheim's Expenditures
29 Responses to the Audit
Anaheim Chamber of Commerce
31 California State Auditor's Comments on the Response From the Anaheim Chamber of Commerce
33 City of Anaheim
35 Larson LLP on behalf of Visit Anaheim
37 California State Auditor's Comments on the Response From Larson LLP on behalf of Visit Anaheim
43 vi CALIFORNIA STATE AUDITOR
January2024 I Report 2023-133
Blank page inserted for reproduction purposes only.
CALIFORNIA STATE AUDITOR
January2024I Report2023-133
Summary
KEY FINDINGS & RECOMMENDATIONS
The Legislature requested an urgent audit of the public funds that the city of Anaheim disbursed to two private nonprofit entities —the Anaheim Chamber of Commerce (Chamber) and Anaheim and Orange County Visitor and Convention Bureau (Visit Anaheim). The city entered into contracts with and disbursed more than sloo million to Visit Anaheim, and the Chamber received more than $6 million in public funds from fiscal years 201.2-13 through 2021.-22.
Our review of these contracts found the following:
• Visit Anaheim improperly subcontracted with the Chamber to provide work related to its tourism district assessment contract with the city —generally intended to promote Anaheim's tourism and convention industries —without written permission from the city as required. The Chamber then used tourism district assessment funds for unallowable services, including advocating for or against proposed federal, state, and local legislation, meeting with elected officials and policymakers, and supporting resort -friendly candidates through the Chamber's political action committee. Notably, Visit Anaheim's subcontract did not require the chamber to track its costs or provide invoices substantiating its expenditures.
• The Chamber could not demonstrate that it provided Visit Anaheim with three of the io agreed -upon services we selected for review from 2o18 through 2022, such as holding meetings with local businesses.
• Because the city did not have a meaningful process for contract monitoring, Visit Anaheim was able to pay the Chamber for unallowable services that involved political advocacy and influence, and the Chamber failed to deliver certain services without the knowledge of the city. We also found that the city did not conduct substantive monitoring or oversight of these and other contracts, including a $6.5 million payment to Visit Anaheim for an economic recovery contract during the COVID-1.9 pandemic even though Visit Anaheim already had millions in estimated unspent tourism district assessment funds intended for similar services.
Therefore, we have made recommendations for the city to improve its contract monitoring policies and procedures and to seek to renegotiate its largest contract with Visit Anaheim to provide for more effective oversight. We also recommend that the city establish an advisory board —partially comprised of business owners in the tourism district —to make recommendations on how tourism district assessment funds are to be spent.
Agency Comments
The city stated that it welcomes our recommendations and explained the steps it will begin to take to implement them. Although we did not make recommendations to the Chamber or Visit Anaheim, they disagreed with or mischaracterized some of our findings and conclusions.
CALIFORNIA STATE AUDITOR
January2024 I Report 2023-133
Blank page inserted for reproduction purposes only.
CALIFORNIA STATE AUDITOR 3
January2024I Report2023-133
Audit Findings
THE CITY OF ANAHEIM CONTRACTED WITH TWO NONPROFIT ENTITIES TO
PROMOTE TOURISM AND RELATED BUSINESS DEVELOPMENT OPPORTUNITIES Figure 1
The city contracted with
Visit Anaheim to operate the
Anaheim Tourism Improvement District and
to provide other tourism -related services.
Visit Anaheim
I/
1 *,
0, , A 1. . 1
City of Anaheim
The city contracted with the
Chamber to promote and market
the city to businesses.
Visit Anaheim subcontracted with the
Chamber to provide work related to its tourism
district assessment contract with the city.
Visit Anaheim is a nonprofit mutual benefit
corporation that, among other things, works to
enhance the economy of Anaheim by marketing
the city as a destination for conventions,
meetings, events, and leisure travel.
Anaheim Chamber of Commerce
The Anaheim Chamber of Commerce is a
nonprofit mutual benefit corporation
that works to provide community
solutions that create economic
prosperity for the greater Anaheim area.
Source: City contracts entered into with Visit Anaheim and the Chamber, a subcontract between Visit Anaheim and the Chamber, and bylaws for Visit Anaheim and the Chamber.
The city of Anaheim, a popular tourist destination, contracted with two nonprofit entities —Visit Anaheim and the Chamber —for services that included promoting its tourism and convention industries and local businesses, as Figure 1 shows. The Anaheim area draws as many as 1.9 million visitors a year to the Disneyland Resort, and the city reports that the convention center receives more than 1. million visitors per year. To better attract tourists and conventions, the city established the Anaheim Tourism Improvement District (tourism district) in 2olo and determined it would be funded, with limited exceptions, by imposing an assessment of 2 percent of hotel room rates at Anaheim resorts, hotels, and motels within a designated geographic area. The tourism district is set to last for a period of 30 years, and the text box describes the intended use of tourism district assessment funds.
4 CALIFORNIA STATE AUDITOR
January20241 Report2023-133
Anaheim intended that its tourism district
assessment funds would be used for various
purposes that include the following:
Providing marketing efforts to attract new
conventions to the Anaheim Convention Center.
Promoting activities that would attract new visitors
to benefit the tourism district's hotels.
Source: Anaheim's tourism improvement district
resolution of formation.
On the same day that it established the tourism
district, the city contracted with Visit Anaheim to
carry out the tourism district's day-to-day operations
and certain activities related to the district (tourism district assessment contract). Visit Anaheim receives
the majority of its funding —roughly 70 percent each
year —from Anaheim's tourism district assessments
(assessments). The city collects these assessments and
transfers 75 percent of these funds to Visit Anaheim —
approximately $5 to $i5 million a year from 2012 through 2021. The tourism district assessment contract currently extends automatically each year, unless terminated.
The Chamber received a combined total of more than
$6.2 million from various contracts with either the city or Visit Anaheim from fiscal years 2012-13 through 2021-22. For example, the city entered into contracts with the Chamber and paid it with public funds to promote and market the city to businesses and to recognize it as the key sponsor of certain events, such as economic development conferences and job fairs. Separately, as part of a subcontract under Visit Anaheim's tourism district assessment contract with the city, Visit Anaheim paid the Chamber with tourism district assessment funds to provide programs, activities, and services for the promotion and benefit of the assessed hotels and resorts in Anaheim and the tourism and convention industry. For example, the Chamber committed to placing tourism -related content on various social media platforms, conducting tourism -related presentations to community groups, and having a tourism webpage on its website. Table 1 summarizes each of the contracts among the city, Visit Anaheim, and the Chamber and the amounts of public funds disbursed for each.
Corruption Investigations Involving Some of Anaheim's Local Leaders Led to This Urgent Audit In response to an investigation by the Federal Bureau of Investigation and the city of Anaheim's issuance of the results of a city -commissioned corruption investigation, the Joint Legislative Audit Committee (Audit Committee) requested this urgent audit to review those public funds that the city has disbursed to Visit Anaheim and the Chamber and to ensure that the nonprofits fulfilled their contractual obligations to the city. In August 2023, the former Anaheim Mayor —who was elected in 2o18 and resigned in May 2o22—pled guilty to obstruction of justice and to providing false statements to a federal agent involving the sale of the Los Angeles Angel Stadium in Anaheim.
The former mayor was involved with the city's negotiations, beginning in 2020, to sell the stadium. In his capacity as a member of the negotiating team for the city, the former mayor provided confidential information so that the Angels baseball team could buy the stadium on beneficial terms. Federal law enforcement recorded the former mayor saying, after he had provided the confidential information, that he expected a $1 million campaign contribution from the Angels after the team succeeded in buying Angel Stadium from the city.
CALIFORNIA STATE AUDITOR 5
January2024I Report2023-133
Table 1
Contracts Among the City of Anaheim, Visit Anaheim, and the Chamber Fiscal Years 2012-13 Through 2021-22
CONTRACT
SOURCECONTRACTTERM
CONTRACT DESCRIPTION.a OFFUNDS
a
Anaheim tourism district assessment contract Entered into in 2010 City pays 75 percent of the tourism district and currently extends Tourism
assessment funds (less the city's administrative costs) automatically each district assessment
$111,220,000
to Visit Anaheim for providing convention services year, unless terminated and promoting tourism, among other activities.
Contracts the
Economic recovery services contract
City convention,
city of Anaheim
City contracted with Visit Anaheim to expedite
sports, and
entered into with
the city's economic recovery, including restoration 2020—indefinite 6,500,000
Visit Anaheim
of hotel occupancy rates and convention center
entertainment
bookings back to pre-COVID-19 pandemic levels.
venue fund
Volleyball retention contract
City contracted with Visit Anaheim to secure Anaheim 2017-2020 City
980,000
as the host city for various volleyball events and to
general fund
recognize Anaheim as a sponsor of USA Volleyball.
Other
190,000
VISIT ANAHEIM TOTAL RECEIVED
$118,890,000
Anaheim tourism district assessment subcontract
Subcontract that
Visit Anaheim transfers 3.5 percent of the tourism
Visit Anaheim
district assessment funds it receives from the city
Tourism district
entered into with
to the Chamber.The Chamber is to fund programs, 2010-2023* assessment funds
$4,430,000'
the Chamber
activities, and services benefitting the assessed
hotels and resorts in Anaheim as well as the tourism
and convention industry.
Sponsorship agreements
City economic
City sponsorships of various Chamber events 2015-2016,
reinvestment fund
including job fairs, economic conferences, and a 2019-2020 and economic
650,000
golftournament.
development fund
Contracts the
Shop -and -dine -local contract
City
city of Anaheim
Implementation of an online platform to promote 2020-2021 general fund
500,000
entered into with
local businesses during the pandemic.
the Chamber
Anaheim Enterprise Zone
City funds paid to the Chamber to perform certain
City
2012-2013
services related to the administration of the Anaheim
general fund
550,000
Enterprise Zone Program
Other
90,000
CHAMBER OF COMMERCE TOTAL RECEIVED
$6,220,000
Source: Auditor analyses of city contracts, a related subcontract, and financial records from the city and Visit Anaheim. * Visit Anaheim canceled the contract with the Chamber, effective September 2023. t Amount includes funds Visit Anaheim disbursed to the Chamber under the tourism district assessment subcontract from calendar years 2012 through 2022. Because Visit Anaheim's 2022 audited financial statements were not available, the expenditure of $660,000 for that fiscal year is unaudited.
6 CALIFORNIA STATE AUDITOR
January20241 Report2023-133
In May 2022, the Anaheim city council directed the city attorney to void the purchase and sale agreement for Angel Stadium. Also in 2022, the former president and CEO of the Chamber (former Chamber president) pled guilty to various charges including wire fraud, filing false tax returns, and making a false statement to a financial institution. Based on the investigative report the city released that discussed these individuals, the Audit Committee requested that the State Auditor review the city of Anaheim's disbursement of public funds to the Chamber and to Visit Anaheim.
CALIFORNIA STATE AUDITOR
January2024I Report2023-133
7 PUBLIC FUNDS PAID FOR SOME UNALLOWABLE AND UNDELIVERED SERVICES Figure 2
® The Chamber did not provide, or could not
POLITICS Visit Anaheim paid the Chamber forX
demonstrate that it delivered, some of the
® unallowable services with tourism agreed -upon services for three contracts district assessment funds.we reviewed.
The city of Anaheim paid Visit Anaheim $6.5 million for an economic recovery contract during the COVID-19 pandemic even though Visit Anaheim already had millions in estimated tourism district assessment reserves.
Source: Auditor analyses of city contracts, a related subcontract, and financial records from the city and Visit Anaheim.
As Figure 2 shows, we found that the Chamber used tourism district assessment funds for unallowable services and that the Chamber could not demonstrate that it provided some services for multiple city contracts. We also found that the city may have paid Visit Anaheim for unnecessary services given Visit Anaheim's estimated tourism district assessment reserves. In 2010 Visit Anaheim entered into a subcontract with the Chamber for the Chamber to provide work related to the tourism district assessment contract, as the text box describes. Visit Anaheim asserted that its former president and the former Chamber president agreed to the contracted work that the Chamber would perform each year, which generally included event sponsorships, community outreach, and legislative tracking and advocacy. A Letter
of Intent si noel b both Visit Anaheim and the
g y
Chamber indicates that Visit Anaheim paid
for this contract using a portion of the tourism
district assessment funds that it receives from
the city of Anaheim. In total, Visit Anaheim paid
the Chamber $4.4 million from 2012 through
2022 for services pertaining to the city's tourism
district assessment contract with Visit Anaheim.
This tourism district assessment contract allows
Visit Anaheim to subcontract for services related
to the tourism district. However, it requires
Visit Anaheim to monitor and supervise those
subcontractors, and it requires Visit Anaheim
to obtain prior written approval from the city
before subcontracting for convention and tourism
marketing services. Visit Anaheim could not
provide documentation to demonstrate that
it obtained written approval from the city to
subcontract with the Chamber, as we discuss later.
Tourism Assessment District Subcontract
Parties: Visit Anaheim and the Chamber
Total amount from 2012 through 2022: $4.4 million
Key provisions:
The contract required the parties to agree annually on a written program of work.
The contract did not require the Chamber to track costs or provide invoices.
Summary of key deliverables:
Event sponsorships
Advertisements and articles in the Chamber's publications Promotion of the Anaheim resort through social media
Source: Subcontract between Visit Anaheim and the Chamber, and Visit Anaheim's financial records.
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The Chamber Used Tourism District Assessment Funds for Unallowable Services We also found that the Chamber reported using tourism district assessment funds it received pursuant to its subcontract with Visit Anaheim to pay for unallowable services each year since at least 2012. The tourism district assessment contract between the city and Visit Anaheim states that Visit Anaheim and, by extension, any entity that subcontracts with Visit Anaheim is generally prohibited from using tourism district assessment funds for purposes unrelated to specified tourism -related programs, improvements, and related activities. In addition, the tourism district assessment contract specifically prohibited Visit Anaheim and, by extension, its subcontractors from using these funds for other unrelated purposes such as political donations, contributions, or other activities. Although the subcontract did not include these prohibitions, the subcontract is required to comply with the tourism district assessment contract between the city and Visit Anaheim, which does have these prohibitions. Visit Anaheim's subcontract with the Chamber also requires both parties to agree annually on the work that the Chamber performs with the funds and requires the two nonprofits to meet semi-annually to assess the Chamber's performance. The Chamber generally provided Visit Anaheim with deliverable reports detailing the services that the Chamber provided under the contract, and the contract did not require the Chamber to track costs or provide invoices.
However, the Chamber's subcontract work plans and deliverable reports indicate that the Chamber used these funds for numerous services that involved political advocacy and influence, none of which fall within the allowable services described above. Unallowable services listed in these work plans included advocating for or against proposed federal, state, and local legislation; meeting with elected officials; and supporting resort -friendly candidates through the Chamber's political action committee. Our review of the Chamber's deliverable reports to Visit Anaheim from 2072 through 2022 reveals a variety of political activities each year that the Chamber provided under the subcontract, as Table 2 shows. Although we recognize that some of the unallowable services could have a direct and positive impact on the tourism district, using tourism district assessment funds for such services violates the city's tourism district assessment contract and the authorizing ordinance of the tourism district.
The city did not review or monitor the services that the Chamber provided to Visit Anaheim with money originating from the tourism district assessment funds. The city's executive director of convention, sports, and entertainment (tourism director), who was primarily responsible for overseeing the tourism district assessment contract, has been aware since 2o18 that the Chamber was a subcontractor. However, he explained that he did not question whether the city had approved the subcontract and that he did not monitor the Chamber's activities, because he believed those activities to be Visit Anaheim's responsibility. Given the significant amount of tourism district assessment funds involved, we would have expected the city to periodically monitor the Chamber's activities as part of the city's oversight of the tourism district assessment contract. Following the 2022 guilty plea of the former Chamber president, Visit Anaheim notified the Chamber that it had canceled the subcontract, effective September 2023.
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Table 2
Examples of Unallowable Services That the Chamber Reported It Engaged in Using Tourism District Assessment Funds
2012 Through 2022
SELECTED UNALLOWABLE SERVICES
2012 Developed Resort Legislative Plan and used the plan to shape conversations with current and potential legislators. Designed campaign interviews, questionnaires, and strategies based on the plan. 2013 Produced list of current bills and their impact on resort businesses. Developed a voter guide and campaign and communication pieces based on the Resort Legislative Plan. 2014* Presented regular bill updates and analysis at the Chamber's Legislative Committee meetings. Included legislative articles in its magazine and newsletters.
2015 Advocated on behalf of resort businesses to support or oppose various proposed local, state, and federal policies. Held four Chamber Legislative Committee meetings, which included attendance by elected officials. 2016 Took key positions and action on legislation and other policies, including writing letters of support or opposition of tourism or resort -related policies.
Hosted nine Chamber Government Affairs Committee meetings to discuss and set policy related to 2017 critical legislation impacting the Anaheim business community and Anaheim Resort. Traveled to California State Capitol and met with 11 legislators to discuss Anaheim and the Anaheim Resort. 2018 Hosted five Chamber Government Affairs Committee meetings including policymakers, such as a county supervisor, a city councilmember, a district attorney, and the registrar of voters.Tracked 17 tourism -related bills.
Coordinated 21 people to speak at Anaheim city council meetings to share news and updates from the 2019 Anaheim resort and entertainment industry. Held one-on-one meetings with five city councilmembers, one county supervisor, and a district attorney. Provided eight reports regarding government affairs to the business community.
2020 Met individually with seven councilmembers, a congressmember, a state senator, an assemblymember, a county supervisor, and a district attorney.
Met individually with six councilmembers, a congressmember, an assemblymember, a county supervisor, 2021 and a district attorney. Held three Chamber Government Affairs Committee meetings with two congressmembers and a district attorney.
2022 Advocated for a tourism -business friendly climate by supporting or opposing 13 local, state, or federally proposed pieces of legislation.
Source: Auditor's analysis of the Chamber's annual reports to Visit Anaheim. * The Chamber's 2014 annual report references many activities that occurred in 2011 and 2012. Therefore, based on this annual report, it is unclear whether some of these activities also occurred in 2014.
The Chamber Did Not Demonstrate That It Delivered Some Agreed -Upon Services for Multiple Contracts
The Chamber could not demonstrate that it delivered some of the contracted services it agreed to provide to the city or to Visit Anaheim. We found that the Chamber could not document that it delivered most services between 2012 through 2017, stating that many of the documents we requested were beyond its record retention period.
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From 2018 through 2022, the Chamber could not substantiate three out of to of the tourism -related activities we selected for review under the tourism district assessment subcontract, as Table 3 shows. Similarly, neither Visit Anaheim nor the Chamber could demonstrate that they agreed on deliverables for 2021 for the tourism district assessment subcontract. Nonetheless, Visit Anaheim's accounting records show that it still provided the Chamber with roughly $27S,000 in tourism district assessment funds that year pursuant to this subcontract.
Table 3
The Chamber Could Not Demonstrate That It Delivered Some Services for Which It Was Paid
CONTRACT
UNSUBSTANTIATED DELIVERABLES
Host monthly economic development meetings with Visit Anaheim, the Chamber, the city's director of community and economic development, and 2018 two city councilmembers. The Chamber provided evidence of calendared meetings from 2018, but did not clearly indicate the purposes of those Tourism district
meetings or how they aligned with this deliverable.
assessment
Include Visit Anaheim and tourism -related organizations in six visits to subcontract with
businesses to discuss potential relationships to tourism, sports, or national Visit Anaheim
2020 associations. Chamber provided evidence of five calendared meetings from 2020, but they did not clearly indicate the purposes of those meetings or how they aligned with this deliverable.
2021 No work plan containing agreed -upon deliverables.
Sponsorship
Develop a program to encourage Anaheim businesses to purchase agreement with the
2019-2020 locally. The Chamber provided some research it had conducted and other city of Anaheim
documentation indicating that it had not developed a purchasing program for local businesses.
DELIVERABLES NOT
Purchasing Program: Create local purchasing preferences, local incentives, and education for businesses and purchasing agents.
Shop -and -dine -
local contract with
2020-2021 Hiring Program: Engage Anaheim employers to connectwith the the city of Anaheim
community, aggregate resources and incentives for local hiring, promote local job opportunities, and interface with Anaheim Workforce Development Board to maintain a jobs board listing of available hiring opportunities.
Source: Auditor's analyses of city contracts and a related subcontract Neither the city's tourism director nor current Visit Anaheim staff believed that the tourism district assessment subcontract with the Chamber was necessary.
Specifically, the city's tourism director stated that he believed Visit Anaheim would have been able to perform any, if not all, of the work that the Chamber provided for the tourism district assessment funds. Similarly, Visit Anaheim's senior vice president of operations, who indicated that she was aware of the purpose of the agreement but was not aware of the deliverables expected in exchange for those funds, stated that Visit Anaheim paid the Chamber for activities that would have been undertaken by the Chamber without those additional funds and that the subcontract could be considered unnecessary. Regardless, Visit Anaheim entered into an unauthorized subcontract with the Chamber that may not have been cost-effective nor an efficient use of money originating from tourism district assessment funds.
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Our review of deliverables due under the 2019
sponsorship agreement between the city of
Anaheim and the Chamber also found that the
Chamber did not deliver some of those agreed -upon
services. The initial agreement included clear
deliverables, such as sponsorships for an economic
conference, a job fair, a business luncheon, and
other events, as the text box describes. However,
after the onset of pandemic restrictions in
early 2020, the Chamber proposed to the city
to shift the emphasis of the contract to business
retention and recovery. As a result, the city and the
Chamber mutually agreed to contract modifications,
allowing the Chamber to develop a web -based
shop -and -dine -local program to spur consumerism
during the pandemic, and they agreed to provide
local businesses with information and resources
to assist with business sustainability and recovery.
Although the Chamber ultimately developed the
shop -and -dine -local website for consumers, it could
not show that it developed a program to encourage
Anaheim businesses to purchase locally.
In 2o2o the city engaged in another contract with
the Chamber regarding the shop -and -dine -local
program. In addition to promoting local businesses
to the community using this web -based program
during the pandemic, the Chamber agreed to
engage Anaheim business -to -business -focused
companies and to create the deliverables that the
text box describes. However, we did not find in the
shop -and -dine -local program any materials or other
information for business -to -business companies,
employers, or job listings.
According to the Chamber, continued
implementation of the business -to -business
purchasing and local hiring components of the
program would have required additional funding.
The Chamber asserted that through July 2021, it
spent roughly $5oo,000 on the shop -and -dine -local
program. However, that contract did not require
the Chamber to track costs or provide invoices.
Therefore, without tracking these costs, the
Chamber cannot demonstrate that a lack of funding
was the reason it failed to provide these contracted
services to the city.
2019 Sponsorship Agreement
Parties: City of Anaheim and the Chamber
Total amount: $425,000
Key provisions:
The contract term was from June 2019 to June 2020.
The Chamber had to invoice the city for half of the
contracted amount upon the contract's approval, with
the remaining amount to be paid at the conclusion of
six months.
The contract did not require the Chamber to track the
costs of the services it provided.
Summary of key deliverables:
Develop and distribute resource materials to new
businesses and top tax -generating businesses.
Host special events and individual meetings aimed at
attracting new businesses to Anaheim and recognize the
city as a lead sponsor at specified special events.
Place advertisements in specified Chamber magazines,
newsletters, and website.
Develop a shop -and -dine -local program to promote local industry and business -to -business purchasing.
Source: 2019 sponsorship agreement between the city and the Chamber.
2020 Shop -and -Dine -Local Contract
Parties: City of Anaheim and the Chamber
Total amount: $500,000
Key provisions:
• The contract term was from October 2020 to
October 2021.
• The Chamber had to invoice the city for one-third of
the contracted amount upon the contract's approval,
with the remaining amount to be paid on specified
dates within approximately the first two months of
the contract.
The contract did not require the Chamber to track the
costs of the services it provided.
Summary of key deliverables:
Promote and provide incentives to residents to shop
and dine at Anaheim businesses.
Create local incentives and education for local
business -to -business purchasing.
Engage Anaheim employers, aggregate resources
and incentives for local hiring, and promote local
job opportunities.
Coordinate, host, and provide staffing for a local job fair.
Source: 2020 shop and dine local contract between the city and the Chamber.
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2020 Economic Recovery Contract
Parties: City of Anaheim and Visit Anaheim
Total amount: $6.5 million
Key provisions:
Contract term is indefinite.The contract will terminate when Visit Anaheim performs all services to the
satisfaction of the city.
Visit Anaheim must provide invoices or other
documentation to the city, including a detailed
description of the services performed.
Visit Anaheim cannot assign, transfer, or encumber any
interest in the agreement to another party without the
city's approval.
Summary of key deliverables:
The City Council intended that the funds be budgeted
as follows:
> Advertising (30%)
> Marketing (30%)
Sales and paid advertising (20%)
Content development (10%)
Communications and miscellaneous (10%)
The goals for marketing included:
Conduct marketing analysis and work to return hotel
occupancy rates to pre -pandemic levels.
Restore meetings and convention bookings to
pre -pandemic levels.
Market to local Anaheim and Orange County residents
to promote local dining, retail, entertainment, and
sports venues.
Source: 2020 economic recovery contract between the city and Visit Anaheim and the city's financial records.
Visit Anaheim Engaged in a Questionable Transfer
of Funds
At the onset of the pandemic in 2020, the city of
Anaheim awarded Visit Anaheim an economic
recovery contract for up to $6.5 million. The city
paid for this contract from its Convention, Sports,
and Entertainment Venue Fund (economic
recovery contract funds)., The economic recovery
contract required Visit Anaheim to promote
and market the city's tourism industry and to
expedite economic recovery after the State
lifted stay-at-home restrictions, as the text box
shows. The contract required Visit Anaheim
to provide invoices or other documentation
to the city that detailed the services it would
provide. We reviewed 20 of Visit Anaheim's
transactions related to this agreement and found
that the transactions were generally related to the
contract's marketing, promotion, or advertising
provisions. The economic recovery contract
required —and Visit Anaheim produced —various
marketing assessments and strategies related to
pandemic recovery. Visit Anaheim also tracked
the costs associated with the contract and
accounted for its expenditures.
Beginning in April 2020, Visit Anaheim also
provided a total of $1.5 million, including a portion
of economic recovery contract funds, to another
entity —the Anaheim Economic Development
Corporation (AFDC) —to, among other things,
build an exhibitor roster for future events and
provide recovery assistance to businesses.
AFDC was formed as the Anaheim Chamber of
Commerce Foundation in 2007, and the two most recent Chamber presidents have been listed as the AFDC's principal officers. According to public federal tax filings, the $1.5 million that AFDC received from Visit Anaheim represents most of AFDC's income in 202o and 2021. AEDC invoices show that it used the funds it received from Visit Anaheim to provide services related to the development of the shop -and - dine -local program; to identify local, state, and federal resources for business relief; and to coordinate virtual town hall seminars. Current staff at Visit Anaheim stated that this transaction was a result of a verbal agreement between its former president and the former president of the Chamber. Visit Anaheim and Chamber staff indicated that the former presidents did not execute a formal written contract.
The Convention, Sports, and Entertainment Venue Fund accounts for the operations of the city's convention center and Angel Stadium in Anaheim.
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Visit Anaheim accounting records initially showed that it made the $1.S million in payments to the AFDC using $1 million in economic recovery contract funds and $Soo,000 from its other accounts. However, Visit Anaheim now accounts for the entire $1.S million in payments as originating from Visit Anaheim's other operational funds. Visit Anaheim's finance director stated that the former president of Visit Anaheim, who resigned in November 2023, instructed her to change the funding source. According to Visit Anaheim's senior vice president of operations and its finance director, the former president requested the reallocation of transfers from its economic recovery contract accounts to other operating accounts because he stated that the transfer could not show on the record as being from economic recovery contract funds.
Visit Anaheim's re -accounting of its payments to AEDC raises additional questions regarding the use of other public funds that Visit Anaheim has received from the city, such as the tourism district assessment funds. Visit Anaheim could not demonstrate how much of the $1..5 million it paid to AEDC might have included surplus tourism district assessment funds. Specifically, it indicated that its tourism district assessment contract with the city did not require it to independently verify how much of its reserves were derived from those funds. However, a city ordinance, the terms of which the tourism district assessment contract incorporates by reference, requires Visit Anaheim to submit an annual report that describes surplus revenues it carried over from a previous fiscal year. This lack of accountability highlights the need for the city to require Visit Anaheim to separately account for its tourism district assessment fund expenditures to ensure that these funds are spent appropriately and in compliance with the tourism district assessment contract.
In addition, the city might not have needed to provide Visit Anaheim with the $6.5 million for the economic recovery contract if the city had performed proper oversight of the tourism district assessment contract, as we discuss later. As Table B.2 in Appendix B shows, from 2012 through 2020, we estimate that Visit Anaheim had accumulated $3.4 million in unspent surplus tourism district assessment funds that remained in its reserves and had surpluses in most preceding years.
By December 2021, this number grew to more than $6 million. This surplus amount and the fact that Visit Anaheim had $1.5 million of additional funds to award to other entities call into question whether the city needed to award Visit Anaheim $6.5 million in economic recovery contract funds.
Please refer to the Recommendations section to find the recommendations that we have made as a result of these audit findings.
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Blank page inserted for reproduction purposes only.
CALIFORNIA STATE AUDITOR 15
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THE CITY OF ANAHEIM PERFORMED NO MEANINGFUL OVERSIGHT OF ITS
CONTRACTS WITH VISIT ANAHEIM ORTHE ANAHEIM CHAMBER OF COMMERCE Table 4
STATE CONTRACTING MANUAL
MANAGEMENT PRACTICES FOR
CONTRACT OVERSIGHT
Identify the deliverables and ensure No No
satisfactory delivery
Monitor progress, especially for quality and
No No
performance deadlines
Conduct audits, especially for critical No No
compliance issues
Review invoices for contract compliance, No No
accuracy, and prompt payment
Track deadlines and use of funds No No
Identify contract and contractor problems and No No
communicate these to the contractor
Source: State Contracting Manual and auditor's analysis of the city's monitoring practices for the contracts we reviewed.
Because the city did not have a meaningful process for contract monitoring, Visit Anaheim was able to pay the Chamber for unallowable services for political purposes, and the Chamber failed to deliver certain services without the knowledge of the city. As Table 4 shows, the city lacks formal, comprehensive contract management policies and practices for professional services contracts. The State Contracting Manual provides the policies, procedures, and guidelines to promote sound business decisions and practices in securing necessary services for the State, and these constitute best practices for local governments in the State.
In lieu of monitoring policies and procedures that would have ensured that Visit Anaheim met its contractual requirements for the 2010 tourism district assessment contract, as the text box outlines, city officials stated that they relied on two city employees to attend Visit Anaheim board meetings as the primary method of overseeing Visit Anaheim's use of tourism district assessment funds. The services that Visit Anaheim indicated it delivered in its annual reports generally complied with the contract requirements, but the city's oversight of the contract was limited.
According to the city's tourism director, he and another city staff member, as Visit Anaheim board members, review information presented at the board meetings and monitor the use of tourism district assessment funds. For example, according to the tourism director, the board members discuss sales goals, marketing and advertising plans, and annual goals and budgets. He provided us with board meeting minutes that reference these items, but he was unable to provide supporting documentation, such as sales presentations and budgets referenced in those minutes. He said that he relied on Visit Anaheim to maintain records of board meetings in accordance with its
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2010 Tourism District Assessment Contract
Parties: City of Anaheim and Visit Anaheim
Total amount between fiscal years 2012-13 and 2021-22:
$111,220,000
Key provisions:
The city must pay Visit Anaheim 75 percent of the net
collected tourism district assessments 30 calendar days after the end of each month in which the funds are collected.
Visit Anaheim must submit an annual report that
complies with the city ordinance and outlines its
improvements, activities, and their estimated costs for that fiscal year, and any surplus revenues carried over from a previous fiscal year.
Visit Anaheim must maintain financial and performance
records in sufficient detail to allow an audit of the
expenditure of city funds it receives.
Summary of key deliverables:
Visit Anaheim must do the following:
Maintain records of associations, convention groups,
trade show sponsors, and other such organizations for
continued promotion and sales efforts.
Maintain sales staff to contact trade show executives,
submit detailed proposals, and coordinate onsite
inspections of convention, exhibition, and housing facilities.
Prepare and disseminate promotional materials and
advertising for convention, trade show, and housing
facilities and services, including through association
memberships, tours, and print and online media.
Provide customary convention services, including a labor pool of registrars, cashiers, and secretaries for use by conventions and trade shows, and maintain open lines of communications with convention center management and staff.
Source: Tourism district assessment contract between the city and Visit Anaheim and the city's financial records.
contractual agreements, including the documents
it distributed for review and discussion. Because
it was his understanding that the tourism district
assessment funds were not public funds, he relied
on Visit Anaheim's annual externally audited
financial statements and did not request that
the city conduct an audit of Visit Anaheim or its
subcontractors, even though the tourism district
assessment contract allows the city to audit
Visit Anaheim's compliance with the contract. He
also stated that he was unaware of the city ever
asking Visit Anaheim to provide financial records,
such as invoices, to verify its contract -related
expenditures since entering into the contract
in 2oio. Notwithstanding these documentation
issues, the city should not have relied only on two
city employees acting as Visit Anaheim board
members to monitor the contract.
Visit Anaheim's senior vice president of operations
stated that the employees in the position
responsible for maintaining records of board
meetings have changed frequently over the years,
resulting in document retention issues. However,
she acknowledged that Visit Anaheim plans
to improve its document retention processes.
Because neither the city nor Visit Anaheim
maintained the documentation consistently,
the city of Anaheim cannot demonstrate that it
sufficiently monitored the use of public funds
to ensure that Visit Anaheim spent those funds
efficiently and effectively.
The city acknowledged that it could strengthen
its contract monitoring practices. The city's
tourism director noted that the city does not have
specific guidance or expectations for overseeing
and monitoring the tourism district assessment
contract, and the assistant city manager confirmed that the city does not have monitoring policies and procedures to guide staff in their oversight of professional services contracts. Although the city has policies related to capital improvement project contracts, the assistant city manager did not know why the city had not established similar guidance for monitoring and oversight of its professional services contracts. Because of a multitude of issues raised in this audit, the assistant city manager stated that Anaheim welcomes the opportunity and plans to develop such policies and procedures to prevent similar occurrences.
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In addition to establishing monitoring policies and procedures, the city has the authority through city ordinance to strengthen its oversight of how Visit Anaheim uses tourism district assessments funds. That ordinance allows it to designate an advisory board to make recommendations to the city council regarding the expenditures of revenues derived from the tourism district assessments. The city's 2oio management plan —a description of how the city plans to manage the tourism district —states that while the city did not intend to appoint an advisory board at that time, it may elect to do so in the future to provide representation and oversight on behalf of the assessed entities.
Given the significant funding that Visit Anaheim receives under the tourism district assessment contract, the appointment of an advisory board would serve as a critical control on behalf of the city to ensure that Visit Anaheim meets its contractual obligations —legally, financially, and practically. We found that tourism districts throughout the State have advisory boards, including Morro Bay, Palm Springs, Santa Rosa, and San Luis Obispo. For example, the advisory board in San Luis Obispo advises the city council on the administration and use of assessment funds and recommends projects to promote tourism that directly benefit area hotels. To ensure an appropriate level of knowledge and expertise, an advisory board in Anaheim should include representatives of the assessed entities within the district and —given the issues we uncovered during this audit —legal counsel and a person knowledgeable of government finance.
A Lack of Clearly Defined Deliverables in the Tourism District Assessment Contract Further Limited the City's Oversight
We also found that the tourism district assessment contract's lack of specific deliverables inhibited the city's ability to effectively monitor the contract, which provided Visit Anaheim with approximately $s million to $is million annually from 2072 through 2o2i. According to the State Contracting Manual, which cities can use as contracting best practices, a contracting state agency must build contract management into the contract to facilitate measurement of achievement and contractor performance, and it must conduct specific contract oversight activities, as Table 4 outlines. The State Contracting Manual also states that contracts must include clear and concise language to describe the scope of work and deliverables.
However, the tourism district assessment contract included only vague high-level expectations for the services that Visit Anaheim was to perform in its day-to-day operations of the tourism district.
For example, the contract requires Visit Anaheim to contact convention and trade show executives, to disseminate related promotional materials, and to conduct tours for industry representatives. However, the contract does not include clear performance benchmarks, such as the number of contacts Visit Anaheim should make, the number of people to whom it should disseminate promotional materials, or the number of tours it should conduct for industry representatives. It also does not provide other possible benchmarks, such as goals for occupancy rates or convention center bookings. The city's tourism director acknowledged that the city could better specify the contract deliverables by clearly defining what elements the city expects
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Visit Anaheim to include in its annual reports, such as consistent prospective and retrospective financials, key performance indicators, and detailed descriptions of promotional activities. Without clearly defining the contract's deliverables, the city is limited in its ability to measure whether Visit Anaheim is effectively spending the millions of dollars it receives each year and its ability to ensure accountability to the entities in the tourism district.
The City Did Not Require Visit Anaheim to Provide the Necessary Information for the City to Effectively Monitor the Use of Public Funds
Although our review found that from fiscal years 2017-18 through 2o21-2o22, Visit Anaheim submitted annual reports to the city as its contract with the city required, the city has not required Visit Anaheim to comply with all of the annual reporting requirements. Such compliance would have allowed the city to better measure whether Visit Anaheim was using tourism district assessment funds effectively. A city ordinance, which the tourism district assessment contract incorporates by reference, requires Visit Anaheim to submit an annual report that describes, among other things, the activities it will provide that fiscal year, an estimate of the cost of providing those activities, and the amount of any surplus revenues it has carried over from the previous fiscal year. If Visit Anaheim had reported the activities it planned to provide and the estimated costs of those activities, it would have provided the city with another mechanism to verify the deliverables and the amount of surplus revenues. Such reporting would have also allowed the city to establish ongoing monitoring to ensure that Visit Anaheim delivered the services and that those services were commensurate with the cost. However, the annual reports that Visit Anaheim submitted to the city from fiscal years 2017-18 through 2021-22 did not include its surplus revenues, the activities it planned to provide in that fiscal year, or the estimated cost for providing those services.
In our review of Visit Anaheim's annual reports, we found that Visit Anaheim included selective information on the activities it had conducted during the previous year and that the reports were not consistent enough to compare Visit Anaheim's year-to-year performance. Figure 3 shows an example of this inconsistency. In fiscal year 2017-18, Visit Anaheim reported that it ran a sweepstakes advertisement to 8 million people to obtain emails for its electronic newsletter, and the sweepstakes generated more than 5,000 entries. In fiscal year 2o18-19, Visit Anaheim reported distributing the same sweepstakes to approximately 1.1 million people, but it did not report how many entries it received. In fiscal year 2019-20, Visit Anaheim only reported that it ran the sweepstakes, but it did not report the distribution numbers or the results. Visit Anaheim believed that the reports it had provided were acceptable, because the city never provided it with guidance or feedback to the contrary. However, by not requiring Visit Anaheim to report consistent information from year to year, the city limited its ability to assess the progress of Visit Anaheim's activities and to evaluate whether it was effectively using public funds.
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Figure 3
Visit Anaheim's Reporting of an Annual Sweepstakes Promotion Was Inconsistent From Year to Year Fiscal Years
2017-18
2018-19
2019-20
Number of
nt
people reached
8,000,000
11,000,000
Number of
sweepstakes entries
`KEt
cKet
r cKEj
Source: Auditor's analysis of Visit Anaheim's annual reports to the city.
The city's tourism director, who indicated that he was responsible for reviewing and submitting Visit Anaheim's report to the city council for consideration each year, explained that he did not realize that Visit Anaheim's annual reports did not comply with the requirements set forth in the city ordinance. He did not question the report's lack of compliance with the ordinance and did not request additional information or provide additional guidance to Visit Anaheim to clarify expectations.
Upon his subsequent review of the city ordinance, he acknowledged that the annual reports did not meet the requirements and that the reports should have addressed Visit Anaheim's plan for using tourism district assessment funds in that fiscal year.
However, because the city did not ensure that Visit Anaheim's reports included the required information, the city's ability to assess the effectiveness of Visit Anaheim's activities was limited. As we discussed previously, had Visit Anaheim reported the surplus tourism district assessment revenue each year, the city might not have felt compelled to award it an additional $6.5 million to assist with economic recovery.
Visit Anaheim's senior vice president of operations indicated that the city requested that Visit Anaheim include additional information in its fiscal year 2o22-23 annual report, such as its 2024 work plans, projections, and a statement of income and expenses. In our review of this report, we found that Visit Anaheim included the additional information that the city requested, including planned activities for 2024, visitor projections, and revenue and expense information. However, although it included information on its remaining unspent revenue for fiscal year 2022-23, Visit Anaheim still did not report cumulative surplus revenue from the tourism district assessment funds as required.
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The City's Lack of Monitoring Also Led to Limited Oversight for the Other Visit Anaheim and Chamber Contracts We Reviewed
Aside from the 2010 tourism district assessment contract discussed previously, the city was also unable to demonstrate that it performed regular monitoring of three other contracts we reviewed. For example, the 202o economic recovery contract with Visit Anaheim that we discussed previously states that one of its goals was to restore meetings and convention bookings to pre -pandemic levels and that Visit Anaheim should complete the related services in a timely and expeditious manner. However, until we prompted its leadership to do so, the city had not compared pre -pandemic meetings and convention bookings to the bookings at the time of Visit Anaheim's final report in April 2o2i or anytime thereafter, and was unaware of whether Visit Anaheim had accomplished its goals. Further, the city council intended the funds to be allocated for services —according to certain percentages —for advertising, co-op marketing, sales and paid advertising, content development, communications, and other services. The contract also required Visit Anaheim to submit invoices or other documentation providing a detailed description of the services it had performed. However, the city never asked it to provide invoices or detailed documentation to ensure that Visit Anaheim spent the funds as intended. According to the assistant city manager, the city did not oversee the spending of these funds because, at the time, the pandemic was an evolving situation and no one expected it to continue as long as it did.
The city was also unable to demonstrate that it provided any meaningful oversight of its 2019 sponsorship agreement or its 2020 shop -and -dine -local program contract with the Chamber. According to the assistant city manager, the city did not monitor these contracts on a day-to-day basis because of staff turnover. In each contract, however, we found unmet and unsubstantiated deliverables that the city would likely have identified with adequate monitoring and oversight. As a result, the city paid for some services it did not receive, which may constitute a waste of public funds.
Please refer to the Recommendations section to find the recommendations that we have made as a result of these audit findings.
CALIFORNIA STATE AUDITOR 21
January2024I Report2023-133
Other Areas Reviewed
To address audit objectives approved by the Joint Legislative Audit Committee (Audit Committee), we include in this section additional information related to the city of Anaheim.
Compensation of Executives at Visit Anaheim and the Chamber 1' 1 1 1 f al fil'
We reviewed pub icy avai ab e eder tax rags
from 2017 through 2o21 for Visit Anaheim and
the Chamber to determine the extent to which
these organizations increased staff compensation
during the pandemic. Our review was limited
to the executive staff included in those filings.
Reportable compensation includes various types of
compensation, some of which the text box shows.
We found that the reported executive compensation
at Visit Anaheim generally decreased in 202o and
2o21 during pandemic. For example, Visit Anaheim's
former president's reportable compensation was
nearly $5oo,000 in 2o19, but it decreased to roughly
$400,000 in 2o2o and then decreased to just more
Examples of Reportable Compensation:
Source: 2022 instructions for Form 990 Return of Organization Exempt From Income Tax.
than $300,000 in 2o21. The Chamber's former
president's reportable compensation was $248,000 in 2018, $241,000 in 2019, and $295,000 in 2020. Current Chamber staff stated that its publicly available 2019 tax filing was incorrect, and it provided us with an amended filing that the Chamber said it filed in December 2023.
The 2019 compensation reported above reflects this amended amount and is higher than the amount originally reported for the Chamber's former president of $168,000. Chamber staff indicated that the former Chamber president resigned from his position in October 2021 and was reported to have received $230,021 in year-to-date reportable compensation.
Current Chamber staff also asserted that they were unaware of how the Chamber determined the former president's salary each year and that they were not privy to that information. Based on our review of publicly available and amended information, we found no indication that the Chamber used public funds to increase the Chamber's former president's salary during the pandemic.
Conflicts of Interest
We also reviewed whether certain conflicts of interest existed between the city of Anaheim and the Chamber or Visit Anaheim from 2o12 through 2022.Our review did not uncover any evidence that a sitting member of the Anaheim city council or another city official had a personal financial interest in any contract entered into with the Chamber or Visit Anaheim that would give rise to a violation of the conflict -of -interest laws under Government Code section logo or the Political Reform Act of 1974. We note, however, that due to limited resources and time constraints, we did not conduct a review of whether an immediate family member of a sitting councilmember or other city official had a financial interest in the Chamber or Visit Anaheim that would give rise to a violation of those conflict -of -interest laws.
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Recommendations
To ensure better oversight of tourism district assessment funds, the Anaheim city council should by July 2024 designate an advisory board to make recommendations regarding how such funds should be spent. The advisory board should include, at a minimum, some of the owners of the assessed entities within the tourism district, legal counsel, and a person knowledgeable in government finance.
To ensure better stewardship of public funds, Anaheim should by January 2025 develop a contract management, monitoring, and oversight process that aligns with the practices set forth in the corresponding provisions of the State Contracting Manual. Specifically, the city should implement policies and procedures for its professional services contracts that require it to track contract deadlines, deliverables, and contractors' use of funds, and it should perform periodic compliance audits and reviews of contractors' financial records.
To improve Anaheim's oversight of the tourism district assessment contract with Visit Anaheim, the city should by January 2025 seek to renegotiate with Visit Anaheim to revise the contract to ensure that the contract does the following:
• Includes key performance indicators to allow the city to better gauge how effectively Visit Anaheim is using tourism district assessment funds. These benchmarks should include, at a minimum, hotel occupancy rates, convention center bookings, and the number of presentations made to convention center executives. • Requires that Visit Anaheim separately track all expenditures related to the contract and prohibits Visits Anaheim from comingling tourism district assessment funds with other revenue sources.
• Requires Visit Anaheim to annually report to the city the amount of any unspent tourism district assessment funds and tourism district assessment fund reserve balances. • Prohibits Visit Anaheim from transferring tourism district assessment funds to another entity without the city's prior approval and full compliance with the subcontracting provisions of the tourism district assessment contract. • Requires Visit Anaheim to develop a plan for oversight of any subcontractor and provide documentation of this oversight annually to the city.
To ensure that the city of Anaheim receives adequate consideration for all of its professional services contracts, the city should implement contract monitoring practices sufficient to ensure that it receives all of the deliverables agreed to in any contract's scope of work. Further, the city should assess whether it received adequate consideration for the 2019 economic development contract or the 2020 shop -and -dine -local contract; if the city finds that it did not receive adequate consideration, then the city should explore its restitution mechanisms under contract law to obtain a return of those funds.
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We conducted this performance audit in accordance with generally accepted government auditing standards and under the authority vested in the California State Auditor by Government Code section 8543 et seq. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on the audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Respectfully submitted,
GRANT PARKS
California State Auditor
January 30, 2024
Staff. Nicholas Kolitsos, CPA, Audit Principal
Aaron Fellner
Logan Blower
Karen Wells
Legal Counsel: Heather Kendrick
JudyAnne Alanis
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January2024I Report2023-133
Appendix A
SCOPE AND METHODOLOGY
The Audit Committee directed the State Auditor to conduct an urgent audit of the city of Anaheim to review the public funds it disbursed to Visit Anaheim and the Chamber. This urgent audit was conducted pursuant to rule 1.8 of the Audit Committee that states that the cost of urgent audit requests must not exceed $29o,000, and the approved audit request allows the State Auditor to modify or decrease the scope of this audit to remain within the monetary limit. Table A lists the objectives that the Audit Committee approved and the methods we used to address them. Unless otherwise stated in the table or elsewhere in the report, all statements and conclusions about items selected for review cannot be projected to the population.
Table A
Audit Objectives and the Methods Used to Address Them
1 1 Examine all sources of public funds that the Identified all payments made by the city of Anaheim to Visit Anaheim and city disbursed to the Anaheim Chamber of the Chamber from fiscal years 2012-13 through 2021-22 and identified the Commerce and Visit Anaheim or their affiliates contracts associated with those payments. over the past 10 years and how those funds Determined the source of funds the city of Anaheim used to pay for contracts it were used. entered into with Visit Anaheim and the Chamber.
For each contract, initiative, project, etc.,
approved by the city in which the Anaheim
Chamber of Commerce orVisit Anaheim were
recipients of public funds, identify the source
of the money, the parameters on those funds,
and how each dollar was ultimately spent.
This should include a review of all contracts
approved by the Anaheim city council, city
manager, and city director in the past 10 years.
Examine the city's policies regarding projects,
grants, contracts, etc., and identify what
went into their decision -making process for
awarding funds to the Anaheim Chamber
of Commerce and Visit Anaheim and their
affiliates. Additionally, review the city's process
for monitoring its projects, grants, contracts,
etc. with the Anaheim Chamber of Commerce
and Visit Anaheim to ensure compliance and
recommend ways it can improve its oversight.
• Determined, to the extent possible, whether Visit Anaheim paid the Chamber or its affiliates using public funds and whether those funds were used for allowable services.
Reviewed all significant contracts by the city in which Visit Anaheim or the Chamber received public funds within our audit authority.
Determined, to the extent possible, how Visit Anaheim and the Chamber spent the public funds they received from the city of Anaheim from fiscal years 2012-13 through 2021-22.
Reviewed the city of Anaheim's policies and procedures for awarding contracts and its council meeting minutes when evaluating whether the city complied with its policies and procedures when awarding contracts to Visit Anaheim and the Chamber. We found that the city of Anaheim complied with its policies and procedures when awarding contracts to Visit Anaheim for the tourism district assessment contract in 2010, a 2017 contract to promote and retain Anaheim as the official host city for national volleyball teams (volleyball retention contract), and the economic recovery contract in 2020. Similarly, we found that the city complied with its policies and procedures when awarding contracts to the Chamber for a sponsorship agreement in 2019 and the shop -and -dine - local contract in 2020. We did not review how the city awarded two other contracts it had with the Chamber, because these contracts were outside of our review authority.
• Determined whether the city adequately monitored contracts with Visit Anaheim and the Chamber and whether the two entities met their contractual requirements.
continued on next page ...
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4 Identify COVID-19 funds, such as the
Coronavirus Aid, Relief, and Economic Security
Act (CARES Act), awarded to the city and then
given to the Anaheim Chamber of Commerce
and Visit Anaheim. For any COVID-19 funds
allocated to these entities by the city, identify
the amount of money given, the parameters
of those funds, and how the dollars were
ultimately spent.
5 Identify the number of no -bid contracts the
city awarded to the Anaheim Chamber of
Commerce and Visit Anaheim, and determine
whether the lack of competitively bid contracts
were justified and/or complied with the city's
policies and practices.
Determined the sources of funds the city used to pay Visit Anaheim and the Chamber from fiscal years 2012-13 through 2021-22 and did not identify any COVID-19 funds, such as CARES Act funds awarded to the city of Anaheim, used to pay those contracts. Table 1 shows the sources of funds for those contracts.
Reviewed five no -bid contracts that the city of Anaheim entered into with Visit Anaheim and the Chamber. We found that the city complied with its policies and procedures when awarding no -bid contracts to Visit Anaheim for the tourism assessment district contract in 2010, the volleyball retention contract in 2017, and the economic recovery contract in 2020. Similarly, we found that the city complied with its policies and procedures when awarding no -bid contracts to the Chamber for a sponsorship agreement in 2019 and the shop -and -dine -local contract in 2020. We did not review how the city awarded two other contracts it had with the Chamber, because these contracts were outside of our review authority. 6 Determine whether any public dollars allocated
Determined whether executive reportable compensation at Visit Anaheim and to the Anaheim Chamber of Commerce or
the Chamber increased during the pandemic by reviewing executive reportable Visit Anaheim by the city of Anaheim were used
compensation information disclosed annually in publicly available tax documents. for increases in staff salaries or compensation
Because this was an urgent audit, our budget and expedited timeframe did not for professional services (consultants, lobbyists,
allow us to conduct work on whether Visit Anaheim or the Chamber used public contractors, etc.) during the COVID-19 shutdown.
funds to increase salaries for consultants, lobbyists, or contractors. 7 Identify the public funds the city has spent on Because this was an urgent audit, our budget and expedited reporting timeframe negotiations surrounding the sale of the Angel did not allow for us to conduct work on this objective.
Stadium and resolving the Surplus Land Act issue.
8 So long as it does not interfere with litigation Because this was an urgent audit, our budget and expedited audit release or criminal indictment, identify and report any timeframe did not allow us to conduct work on this objective. Additionally, had corruption that took place. we attempted to conduct the work, we might not have been able to proceed or report under audit standards, as we are not to interfere with ongoing litigation or investigations.
9 For the last 10 years, identify any conflicts of Analyzed whether any sitting member of the Anaheim city council or other city interest among the City of Anaheim, Anaheim official, in the prior 10 years, had a personal financial interest in any contract Chamber of Commerce, and Visit Anaheim. entered into by the city with the Chamber orVisit Anaheim. However, because this was an urgent audit, our budget and expedited reporting timeframe did not allow us to review whether an immediate family member of a sitting member of the Anaheim city council or other city official had a financial interest that would give rise to a violation of conflicts -of -interests laws.
10 Determine whether the City has adequate
practices and policies in place to ensure that
staff, councilmembers, Anaheim Chamber of
Commerce, and Visit Anaheim comply with
the Brown Act. Identify any violations of the
Brown Act.
Source: Audit workpapers.
Because this was an urgent audit, our budget and expedited reporting timeframe did not allow us to conduct work on this objective.
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Assessment of Data Reliability
The U.S. Government Accountability Office, whose standards we are statutorily obligated to follow, requires us to assess the sufficiency and appropriateness of computer -processed information that we use to support our findings, conclusions, or recommendations. In performing this audit, we relied on financial records from the city of Anaheim and on the records of Visit Anaheim. To evaluate the completeness of the city's financial reports, we searched its accounting records by vendor for Visit Anaheim and the Chamber and the transactions for those entities from fiscal years 2012-13 through 2021-22. We also compared the total amounts the city disbursed to Visit Anaheim and the Chamber from fiscal years 2012-1.3 through 2021-22 to the amounts in the related contracts, and we found that the totals materially matched. Thus, we were able to gain some assurance that we captured the complete population of payments made by the city to Visit Anaheim and the Chamber. We also relied upon records obtained from Visit Anaheim during calendar years 2012 through 2021. To gain assurance that we obtained all expenditures from Visit Anaheim to the Chamber related to the tourism district assessment contract, we compared the total expenditures in its records to its audited financial statements. We found that the total expenditure amounts materially matched. In both instances, we found the data to be sufficiently reliable for our audit purposes.
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Appendix B
VISIT ANAHEIM'S EXPENDITURES
The tourism district assessment contract between Anaheim and Visit Anaheim requires that Visit Anaheim maintain financial and performance records sufficient to conform with generally accepted accounting principles to allow for an audit of the expenditure of tourism district assessment funds. However, Visit Anaheim did not discretely account for expenditures related to the tourism district assessment funds that it received. To present an estimate of Visit Anaheim's expenditures and unspent tourism district assessment funds, we used the revenue and expenditures that Visit Anaheim reported in its annual audited financial statements and applied the percentage of total revenue that Visit Anaheim received from tourism district assessment funds to its total annual expenditures by category, as Tables B.1 and B.2 show. This methodology is similar to the one proposed by the city in 2011 for estimating tourism district assessment reserves.
Table B.1
Estimated Tourism District Assessment Expenditures by Category 2012 Through 2021 (nearest thousand)
CATEGORY
Salaries and wages $40,174,000
Convention advertising, promotion, research
Solicitation —travel and promotion
Insurance
Tourism travel and promotion
Anaheim Chamber of Commerce
Payroll taxes
Rent
Computer contingency
Miscellaneous
Enterprise Anaheim, LLC
Client assistant commitments
Convention associations, meetings, exhibitions
Media and community relations
Employer's pension contribution
TID reimbursable expenses
Professional services and public relations
Membership expense
CATEGORY
Industry events
10,252,000 Client materials, services, and housing
7,482,000 Passkey user fees
7,055,000
6,120,000
2,738,000
2,859,000
2,774,000
2,662,000
2,605,000
2,178,000
2,080,000
1,840,000
1,373,000
1,303,000
954,000
946,000
922,000
Source: Auditor's analysis of Visit Anaheim's annual financial statements.
Community assistance
Supplies and other office expenses
Legal fees
Telephone
Equipment rental
Pension administration fees
Partnership development
Payroll administrative fees
General travel and promotion
Mailing cost
Events —sports development
Depreciation
Employee —auto and mileage expenses
Other
Total
$576,000
509,000
414,000
403,000
383,000
346,000
318,000
297,000
261,000
251,000
221,000
206,000
171,000
171,000
146,000
115,000
309,000
$101,414,000
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Table B.2
Visit Anaheim's Estimated Unspent Tourism District Assessment Funds in Reserve 2012 Through 2021 (nearest thousand)
YEAR
2012
$8,635,000
$8,150,000
$485,000
2013
9,444,000
8,416,000
1,028,000
2014
10,260,000
9,709,000
551,000
2015
11,613,000
10,375,000
1,238,000
2016
12,690,000
11,014,000
1,676,000
2017
13,480,000
13,857,000
(377,000)
2018
14,167,000
13,934,000
233,000
2019
15,018,000
15,079,000
(61,000)
2020*
4,833,000
6,188,000
(1,355,000)
2021
7,822,000
4,690,000
3,132,000
Total estimated tourism assessment funds in reserve
$6,550,000
Source: Auditor's analysis of Visit Anaheim's annual financial statements.
Note: Total tourism district expenditures differ slightly from total expenditures in Table B.1 due to rounding. * From 2012 through 2020, Visit Anaheim had accumulated an estimated $3.4 million in unspent surplus tourism district assessment funds.
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January2024I Report2023-133
ANAHEIM
CHAMBER
OF COMMERCE 0
January 11, 2024
Mr. Grant Parks
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, California 95814
Dear Mr. Parks:
The Anaheim Chamber of Commerce would like to express its gratitude to the State Auditor for affording us the opportunity to respond to the audit report, despite the absence of specific recommendations directed towards the Chamber.
We understand that in accordance with State law, the State Auditor's office could not provide an 0 unredacted copy of the entire report as other aspects of the audit pertain to the City of Anaheim and Visit Anaheim. Consequently, our response is based on approximately 1/3 of the audit report that we were able to review, with about 2/3 of the report remaining redacted. It is essential to note that all recommendations within the audit report were redacted, given that none were specifically directed towards the Chamber. The redactions varied in scope, ranging from entire pages, paragraphs, sentences to individual words within sentences.
The examination conducted by the State Auditor's office included a scrutiny of several Chamber contracts. For the majority of those contracts the Chamber was able to provide evidence to the audit staff demonstrating the numerous activities that the Chamber engaged in for the benefit of Anaheim.
In the tourism improvement district (TID) agreement workplans with Visit Anaheim, of the 10 activities selected for review, the State Auditor's office found the Chamber able to substantiate 7.
While 3 items were singled out, it is crucial to understand that an unsubstantiated deliverable does not imply the work did not occur. It is not a statement by the Auditor's office suggesting the absence of the work.
Furthermore, we believe it is imperative for readers of the audit report to have proper context regarding the items shown in Table 3:
For the first two items in Table 3, the State Auditor's table acknowledges that the Chamber provided evidence of calendared meetings where deliverables were meetings or visits but indicated that the Chamber could not provide documentation showing the purpose of the meetings and actual discussions held, which in our view is unreasonable, given that the meetings occurred three to five years ago.
The third item in Table 3 from the TID agreement with Visit Anaheim was the 2021 workplan. The 2021 workplan was supposed to be adopted in late 2020; however, this was during the height of the COVID-19 pandemic when the Governor imposed the strictest lockdown of the entire pandemic with the regional stay-at-home orders. Consequently, as described in the mid -year update for 2021, the Chamber continued to operate under the 2020 workplan. 2099 S. State College Blvd., Suite 650 Anaheim, CA 92806 T (714) 758-0222 AnaheimChamber.org California State Auditor's comments begin on page 33.
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State Auditor
s� Since 2015, the Chamber has engaged in various activities, including advocacy and policy work impacting the tourism industry, such as tracking, supporting, or opposing legislation, meetings with policymakers, and discussions on government affairs. © We concur with the State Auditor's acknowledgment that there was nothing in the Chamber's agreement with Visit Anaheim that prohibited these activities.
Nevertheless, the State Auditor's office contends that these were deemed unallowable activities under the City's agreement with Visit Anaheim because they should be considered political © activity. We respectfully disagree with this assessment, as these services and activities have demonstrably benefited the tourism and convention industries in Anaheim.
We would like to emphasize that under the Funding Agreement, the primary purpose was for the Chamber to provide services that will benefit the Assessed Facilities and the tourism and © convention industry. Legislative advocacy is a valuable service that significantly benefits the Assessed Facilities. Furthermore, as required by the subcontract with Visit Anaheim, the Chamber provided annual workplans outlining the multitude of activities the Chamber would conduct each year. Both Visit Anaheim and the Chamber mutually agreed upon these workplans, which consistently included legislative advocacy as an integral activity or service that directly benefits the Assessed Facilities and the tourism industry. © Moreover, such activities align with standard operating procedures for tourism improvement districts across the state. Many cities, counties, and special districts throughout the state regularly engage in these types of activities, and some even have dedicated employees solely responsible for such endeavors.
In addition, many entities, such as the Internal Revenue Service on its website when providing guidance to non-profit organizations, make clear that there is a distinct difference between political activity and legislative activity.
® We appreciate and agree with the State Auditor's statement that "found no indication that the Chamber used public funds to increase the Chamber's former president's salary during the pandemic."
For years, the Anaheim Chamber of Commerce has worked on activities that have benefitted the Anaheim business community and the people of Anaheim. We remain committed to working in partnership with the City of Anaheim and Visit Anaheim in promoting our city and to advance economic opportunities for the Anaheim business community.
Si erely,
Laura Cun ' gham
President and CEO
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January2024I Report2023-133
Comments
CALIFORNIA STATE AUDITOR'S COMMENTS ON THE RESPONSE FROM THE
ANAHEIM CHAMBER OF COMMERCE
To provide clarity and perspective, we are commenting on the Anaheim Chamber of Commerce's response to our audit. The numbers below correspond to the numbers we have placed in the margin of its response.
In accordance with audit standards, we provided the Chamber with a redacted draft 0 report that included information pertinent only to the Chamber. Pursuant to state law, we did not provide the Chamber with our findings and conclusions related to the other entities we reviewed.
The Chamber mischaracterizes our conclusion. As we describe on pages 9 and 10, the �
Chamber could not demonstrate that it delivered most services between 2o12 through 2017, stating that many of the documents we requested were beyond their record retention period. Although it was able to substantiate some of the services it provided from 2018 through 2022, we found that the Chamber could not substantiate that it delivered three out of to of the tourism -related activities we reviewed under the tourism district assessment subcontract with Visit Anaheim, nor could it substantiate that it delivered two other services under its contracts with the city, as Table 3 on page >_o shows.
We disagree that it is unreasonable to expect the Chamber to provide evidence of its contracted deliverables, including the purpose and content of meetings. The Chamber was able to provide support, such as agendas and other supporting documentation, for other contracted activities we reviewed for this same period. As Table 3 on page to shows, the documentation the Chamber provided did not clearly indicate the purpose of these meetings and how they aligned with the agreed -upon deliverables. Thus, we stand by our recommendation that the city adopt best practices for contract monitoring, including compliance audits, and ensuring satisfactory delivery of contracted services.
Although the Chamber was unable to provide us with a 2021 work plan that described the services and activities it was to perform that year, Visit Anaheim's accounting records show that it still provided the Chamber with roughly $275,000 in tourism district assessment funds, as we discuss on page >_o. As a result, the city's and Visit Anaheim's lack of oversight of the subcontract necessitates our recommendation that Visit Anaheim develop a plan for oversight of any subcontractor and provide documentation of this oversight to the city annually.
The Chamber misstates the length of time it violated the city's tourism district assessment contract and the authorizing ordinance of the tourism district, as it also delivered these unallowable services prior to 2oi5. As we state on page 8, the Chamber also reported engaging in unallowable services, including advocating for or against proposed federal, state, and local legislation; meeting with elected officials; and supporting resort -friendly candidates through the Chamber's political action committee since at least 2012. These activities are not consistent with the city's intended use of the funds as the text box on page 4 shows.
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© The Chamber mischaracterizes the provisions of the subcontract. As we describe on page 8, the Chamber's subcontract work plans and deliverable reports indicate that the Chamber used these funds for numerous services that involved political advocacy and influence, none of which fall within the allowable services described in the tourism district assessment contract. The tourism district assessment contract prohibited Visit Anaheim and, by extension, its subcontractors, from using these funds for services unrelated to specified tourism -related programs, improvements, and activities. The Chamber reported engaging in these unallowable services annually as part of the subcontract since at least 2012. The Chamber's justification that its activities may benefit the assessed facilities or align with other tourism districts across the state is irrelevant, as the political activities were unallowable under the tourism district assessment contract.
QQ We are perplexed as to why the Chamber mentions in its response the U.S. Internal Revenue Service guidance, which pertains to those activities a nonprofit organization may engage in while still maintaining its tax-exempt status. That guidance is not relevant to the scope of services that were contracted for and are allowed under the tourism district assessment contract. As we describe on page 8, the tourism district assessment contract prohibited Visit Anaheim and, by extension, its subcontractors, from using these funds for services unrelated to specified tourism -related programs, improvements, and activities. As we also describe on page 8, the Chamber's subcontract work plans and deliverable reports indicate that the Chamber used these funds for numerous services that involved political advocacy and influence, none of which fall within the allowable services described in the tourism district assessment contract. ® As we describe on page 21, our conclusion was based solely on publicly available and amended salary information.
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January2024I Report2023-133
CITY OF ANAHEIM
OFFICE OF THE CITY MANAGER
January 11, 2024
Grant Parks
California State Auditor
521 Capitol Mall, STE 1200
Sacramento, CA 95814
Dear Mr. Parks:
The City of Anaheim has received the State Auditor's draft report regarding tourism - related contracts in the City of Anaheim and we appreciate the efforts of the State Auditor's Office in exploring this important issue.
I have read the report and shared its draft findings and recommendations with our City Council. While the City leadership team continues to review, clarify and validate all the draft findings contained within the report with the State Auditor team, the City of Anaheim has no objection to and welcomes the recommendations put forward by the State Auditor. The following responses address each of the four recommendations below:
Recommendation 1: The Anaheim City Council should designate an advisory board by July 2024 to make recommendations regarding how such funds should be expended. The board should include, at a minimum, some of the owners of the assessed properties within the tourism district, legal counsel, and a person knowledgeable in government finance.
City Response: The City of Anaheim will begin exploring the process for establishing an independent advisory board to assist the City in the oversight of ATID expenditures and activities.
Recommendation 2: Anaheim should develop a contract management, monitoring, and oversight process that aligns with the practices set forth in the corresponding provision of the State Contracting Manual by January 2025. The city should implement policies and procedures for its professional service contracts that require it to track contract deadlines, deliverables, and contractors' use of funds, as well as perform periodic compliance audits and reviews of contractors' financial records.
City Response: The City of Anaheim supports the conclusion that there is always room for improvement in our existing contract oversight procedures and will begin work on adopting a set of policies and procedures specifically for professional service contracts. 200 S. ANAHEIM BLVD.
SUITE 733
ANAHEIM, CA 92805
TEL (714)765.5162
FAX (714) 765-5164
www,anahaim.net
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Recommendation 3: The city should renegotiate the contract with Visit Anaheim by January 2025 to improve oversight and to ensure that it does the following:
• Include key performance indicators to allow the city to better gauge how effectively Visit Anaheim is using tourism assessment funds. These benchmarks should include, at a minimum, hotel occupancy rates, convention center bookings, and the number of presentations made to convention center executives.
• Require Visit Anaheim to track all expenditures related to the contract and prohibit from commingling tourism district assessment funds with other revenue sources. • Prohibit Visit Anaheim from transferring tourism district assessment funds to another entity without the city's prior approval and full compliance with the subcontracting provisions of the tourism district assessment contract.
• Require Visit Anaheim to develop a plan for oversight of any subcontractor and provide documentation of this oversight annually to the city.
City Response: The City of Anaheim supports this recommendation and has already started the dialogue with Visit Anaheim in order to improve the management of these funds and the reporting that is necessary to ensure that performance indicators and benchmarks are being properly established and met annually. The City will begin discussions with Visit Anaheim about specific changes to the contract that could be considered in a timely fashion.
Recommendation 4: The city should assess whether it received adequate consideration for the 2019 economic development contract or the 2020 shop and dine local contract. If the city finds that it did not receive adequate consideration, then the city should explore its restitution mechanisms under contract law to obtain a return of those funds.
City Response: The City of Anaheim and our Audit Division will begin exploring the audit provisions within these two agreements to further assess whether restitution is appropriate.
As indicated in the responses above, the City is now preparing an action plan to implement the four recommendations well within the timeframes identified. We appreciate the work of your team on this matter and look forward to continued collaboration as we enhance our existing contract oversight procedures and embrace best practices going forward.
Sincerely,
Jim Vandetpd
City Manager
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January2024I Report2023-133
37 LARSON
Hilary Potashner
Direct: 213.205.2750
[email protected]
January 11, 2024
VIA EMAIL
Larson LLP 555 South Flower Street, 3011 Floor I P 213.436.4888 larsonllp.com Los Angeles, CA 90071 F 213.623.2000
Grant Parks*
California State Auditor
Auditor of the State of California
621 Capitol Mall
Suite 1200
Sacramento, California 95814
Re: 2023-133—Confidential Draft Audit Report for Review Dear Mr. Parks:
R.C. Harlan
Direct: 213.924.6321
[email protected]
We have completed our review of the California State Auditor's Draft Report excerpt pertaining to Visit Anaheim ("Draft Report"). We have identified the following concerns and corrections for your consideration.
tourism district assessment contract with the City without written permission from the city as required."
The Draft Report's emphasis on the lack of documentation of written permission from the City for Visit Anaheim to enter into a subcontract with the Anaheim Chamber of Commerce ("ACOC") ignores both the context surrounding that particular subcontract and the City's express knowledge and approval of that subcontract.
Visit Anaheim entered into a subcontract with ACOC in 2010, a mere two months after the ATID's inception and the City's execution of the Visit Anaheim Funding Agreement. Not only was the City aware of that subcontract from its start, it also chose not to object to its formation. Thereafter, Visit Anaheim reminded the City of its contractual relationship with ACOC on a yearly basis through Visit Anaheim's annual budgeting process. Every year, Visit Anaheim provides to its Board of Directors —which is required to include two City Employees designated by the City Manager —its proposed budget, which from 2012 to 2022 contained a designated line item for Visit Anaheim's subcontract with ACOC. Thus, every year at the Visit C
q)
* California State Auditor's comments begin on page 43.
38 CALIFORNIA STATE AUDITOR
January20241 Report2023-133
Grant Parks
January 11, 2024
Anaheim Board meetings, the City Designees on the Board reviewed and approved the budget with a delineated payment to ACOC from the inception of the ATID through the cancellation of the ACOC subcontract.
• Page 4: "To better attract tourists and conventions, the city of Anaheim established the Anaheim Tourism Improvement District (tourism district) in 2010 and determined it would be funded by assessing a tax of 2 percent of hotel room rates at Anaheim resorts, hotels, and motels within a designated geographic area, with limited exceptions." The Draft Report mischaracterizes the 2% levy placed on hotel rooms within the Anaheim Tourism Improvement District as a tax. This is legally incorrect. Pursuant to Resolution No. 2010-151 of the Anaheim City Council, as well as City Ordinance No. 6174, the City of Anaheim created the Anaheim Tourism Improvement District and thereafter implemented a 2% assessment "of the hotel room `rent,"' as defined by Anaheim Municipal Code Section 2.12.005.080. Under California law, there is a quantifiable difference between a tax and an assessment; here, the City Council of Anaheim implemented an assessment —not a tax.
incorporates by reference, requires Visit Anaheim to submit an annual report that describes surplus revenues it carried over from a previous fiscal year."
fiscal years 2017-18 through 2021-22 did not include its surplus revenues, the activities it planned to provide in the upcoming year, or the estimated cost for providing those services."
There are two key points to consider when reviewing these statements about Visit ® Anaheim's Annual Reports to the City. First, not only does Visit Anaheim provide an Annual Report to the City through the City Designees serving on the Visit Anaheim Board of Directors, but Visit Anaheim also provides its annual budgets and its audited financial statements to the City through the same City Designee Board Members. Taken together, Visit Anaheim provides the City with far more information than is required by Municipal Code Section 2.14.150, which is indicative of the level of ongoing communication and transparency that it maintains with the City.
Additionally, the undersigned were unable to find any requirement in the Municipal Code that Visit Anaheim's Annual Reports must discuss planned activities for upcoming years.
According to our review, Municipal Code 2.14.150.030 requires that the Annual Reports only ® provide specific information pertaining to the "fiscal year to which the report applies." Visit Anaheim's Annual Reports comply with this code by routinely identifying the fiscal year to which the reports apply, describing the services provided during that year, and sharing L A R S O N I Larson LLP
larsonllp.com
CALIFORNIA STATE AUDITOR 39
January2024I Report2023-133
Grant Parks
January 11, 2024
significant financial information from that fiscal year. Visit Anaheim is, however, amenable to �s providing an upcoming year forecast in its future Annual Reports if that is requested or suggested. Yet it should be noted that its failure to provide such information in its Annual Reports thus far was not in violation of its funding agreement with the City or the Municipal Code referenced therein.
tourism district assessment funds that it received."
This statement is not accurate. As was reported to your team, Visit Anaheim's independent CPA and Auditor has maintained documentation tracking and verifying TID-eligible expenditures since the start of Visit Anaheim's TID Funding Agreement. In fact, his annual reconciliation was performed in a manner that was expressly agreed to by the City. Moreover, his annual reconciliations and supporting documentation were provided to the City upon request.
recovery contract during the COVID-19 pandemic even though Visit Anaheim already had more than an estimated $6 million in unspent tourism district assessment funds."
related to the tourism district, we used the revenue and expenditures that Visit Anaheim reported in its annual audited financial statements and applied the percentage of total revenue that Visit Anaheim received from tourism district assessment funds to its total annual expenditures by category, as Tables B.1 and B.2 show. This methodology is similar to the one proposed by the city in 2011 for estimating tourism district assessment reserves."
LARSON Larson LLP
larsonllp.com
40 CALIFORNIA STATE AUDITOR
January20241 Report2023-133
Grant Parks
January 11, 2024
Table B.2
VIsit AnahelrnIs Esurnated UnspentTourwn DI strict Assessmeni Funds In Reserrefrm202 Through2021
YEAR
r a
2D12 63S,OD0 $9,1A000 S4MD00
2D13 14Z::)DO 0,416,00D 1,028,DDD
2414 10
, 60ODD 9,7O4OOD 551,DDD
2 11,613,ODD 10,375UOD 1 38,DDD
® 2D16 12,69WO 11,014,000 1,676,DDD
13,48 D, -O A, 13,SS7,000 [377XM
2131 14j6TDn6 13,934,WD 233,ODD
21319 15,01E,(w 15,079;AOD C61,DODp
20M 4,8330-0 6,1&8,000 [1,354M
2D21 7 822OD0 4RDZII100 3131,000
Total estimated buurim assessmeutfunds in reserve $6-IM.D00 a J002
We continue to take issue with the Draft Report's calculation of the TID funds QQ maintained in Visit Anaheim's reserves. As an initial matter, the Draft Report does not distinguish between restricted and unrestricted reserves, which is critical here. Restricted reserves are funds that have already been earmarked for TID expenditure in an upcoming year; such reserves should not be taken into account when determining how much cash Visit Anaheim had available when it received the COVID-19 Recovery Funds from the City.
Moreover, the Draft Report's assumption that the percentage of annual revenue that are TID funds would be equal to the percentage of annual expenditures that are TID expenses is 1 o faulty. This assumption ignores the actual business practices of Visit Anaheim. As previously explained to you by Visit Anaheim's independent CPA and Auditor, TID funds are expended for all allowable TID expenses. Visit Anaheim does not use any preconceived percentage to set a limit on use of those funds. Rather, if TID Funds are available, they are used to cover TID allowable expenses. If there are more TID allowable expenses than TID funds received in a given year, Visit Anaheim will allocate all TID funds available to cover as much TID allowable expenses as possible, before turning to non-TID funds to cover the balance.
Such was the case in the Spring of 2020. According to Visit Anaheim's CPA and independent auditor, because Visit Anaheim had expended more for TID allowable expenses than it had received in TID funding at that time, there were no TID funds in Visit Anaheim's reserves in early 2020. Thus, we dispute your conclusion that Visit Anaheim had more than $6 million in TID funds at the time that the City provided COVI13-19 Recovery Funds.
L A R S O N Larson LLP
larsonllp.com
CALIFORNIA STATE AUDITOR 41
January2024I Report2023-133
Grant Parks
January 11, 2024
Additionally, the Draft Report's methodology is flawed for a second reason. It fails to 11 take into account the expenditures not listed as expenses on Visit Anaheim's Statements of Financial Position (commonly referred to as balance sheets), such as capital expenditures. By failing to include these TID eligible expenditures, the Draft Report's calculation of Visit Anaheim's annual TID expenditures is further reduced, resulting in an even greater overestimation of the TID funds in reserve.
Lastly, even if your methodology and calculations are accepted —which they should not (:D be —Table B.2 makes clear that Visit Anaheim did not have over $6 million in reserve when it received the COVID-19 Recovery Funds from the City in 2020. Indeed, the statement on page 11 that "[t]he city of Anaheim paid Visit Anaheim $6.5 million for an economic recovery contract during the COVID-19 pandemic even though Visit Anaheim already had more than an estimated $6 million in unspent tourism district assessment funds" is incorrect. Per your calculations in Table B.2, Visit Anaheim only achieved a hypothetical TID reserve amount in excess of $6 million after the close of fiscal year 2021, which was nearly two years after the COVID-19 Recovery Funds were provided to Visit Anaheim. Thus, even assuming use of your methodology, it would be more appropriate to calculate the reserves as of the close of fiscal year 2019 when assessing the provision of COVID-19 Recovery Funds.
We are available to answer any and all questions regarding the above concerns and corrections. On behalf of Visit Anaheim, we again would like to express our gratitude for the opportunity to provide this information, and we respectfully request that this information be incorporated into the California State Auditor's Final Report.
Sincerely,
Hilary Potashner
// rez;��
R.C. Harlan
cc: Christina Dawson (via email)
Email: [email protected]
L A R S O N I Larson LLP
larsonllp.com
42 CALIFORNIA STATE AUDITOR
January2024 I Report 2023-133
Blank page inserted for reproduction purposes only.
CALIFORNIA STATE AUDITOR 43
January2024I Report2023-133
Comments
CALIFORNIA STATE AUDITOR'S COMMENTS ON THE RESPONSE FROM
LARSON LLP ON BEHALF OF VISIT ANAHEIM
To provide clarity and perspective, we are commenting on the response from Larson LLP on behalf of Visit Anaheim (Visit Anaheim) to our audit. The numbers below correspond to the numbers we have placed in the margin of its response.
Visit Anaheim provides incorrect context and makes unsupported claims in its 0 response that are irrelevant to its contractual obligation with the city. Although Visit Anaheim implies that the city was aware of and approved its subcontract with the Chamber, it was unable to support this claim. As we state on page 7, the tourism district assessment contract requires Visit Anaheim to obtain prior written approval from the city before subcontracting for convention and tourism marketing services.
Despite this requirement, Visit Anaheim could not demonstrate that it obtained the necessary written approval from the city in 2010 to subcontract with the Chamber or any other evidence to demonstrate the city's express knowledge and approval of the subcontract. Further, Visit Anaheim makes unsubstantiated claims that the city was aware of the subcontract from its start. On the contrary, as we explain on page 8, the city's tourism director, who was primarily responsible for overseeing the tourism district assessment contract, indicated that he has only been aware since 2018 that the Chamber was a subcontractor. Visit Anaheim could have avoided this confusion surrounding the circumstances of the subcontract had it obtained written approval from the city as required.
Visit Anaheim overstates and mischaracterizes the information shared at its board O2 meetings. In fact, Visit Anaheim was unable to provide evidence of any board meeting prior to 2o18 that discussed its subcontract with the Chamber. The budget documents that Visit Anaheim was able to provide only showed broad expense categories, such as administration and general/finance, and do not indicate that the payments were related to the subcontract. Thus, we stand by our recommendation on page 23 that Visit Anaheim develop a plan for oversight of any subcontractor and provide documentation of this oversight annually to the city.
As part of our quality control process, our standard practice is to provide agencies five 0 working days —the agency review period —to review and comment on a draft copy of the report. During this time, we encourage agencies to discuss with us any concerns with the report, including any factual issues or word choices they may identify. In keeping with this practice, we edited this phrase to say, "imposing an assessment' Visit Anaheim's interpretation of the city ordinance is incorrect, and its assertion that it provided the city with the required information is disingenuous. The ordinance requires Visit Anaheim to submit an annual report that describes, among other things, the activities it will provide that fiscal year, an estimate of the cost of providing those activities, and the amount of any surplus revenues it has carried over from the previous fiscal year. However, as we describe on page 1.8, the annual reports we reviewed only included selective information on the activities it had conducted during the previous fiscal year and did not include the elements required under the city ordinance.
44 CALIFORNIA STATE AUDITOR
January20241 Report2023-133
Visit Anaheim acknowledges that it has not included information in its annual reports related to services it will provide for that fiscal year, but it is amenable to doing so. This information is required under the city ordinance and would allow the city to establish ongoing monitoring and accountability measures to ensure that Visit Anaheim delivers planned services. © Visit Anaheim's assertion that it maintained and tracked tourism district expenditures is misleading and misrepresentative of documentation it provided to us during the audit.
Specifically, Visit Anaheim's accounting system does not distinctly identify, such as by using a unique expense code, expenditures that are paid for using tourism district assessment funds.
As a result, it could not accurately or demonstrably track and verify those expenditures that were related to the tourism district assessment contract. Visit Anaheim's CPA provided spreadsheets displaying broad spending categories, such as cash disbursements and payroll, but was unable to support that these expenditures were paid for by revenues from the tourism district assessment contract. Thus, we stand by our recommendation on page 23 that the city require Visit Anaheim to separately track all expenditures related to the contract and prohibit Visit Anaheim from comingling tourism district assessment funds with other revenue sources.
During the agency review period, we edited this report text to clarify that Visit Anaheim had millions in estimated unspent public funds intended to fund similar services. ® Visit Anaheim's response incorporates a prior draft version of Table B.2. At the time of Visit Anaheim's response, this table was still undergoing our internal review process and was slightly modified to the version we present on page 3o. Nevertheless, the substance of our report's conclusions and findings —as originally communicated to Visit Anaheim — remain unchanged and we estimate that Visit Anaheim accumulated millions in unspent Tourism District Assessment Funds from 2012 through 2020.
Visit Anaheim does not identify restricted funds that are earmarked for tourism district assessment expenditures in their audited financial statements, annual budgets, or annual reports to the city. As a result, we used a methodology proposed by the city that we describe in Appendix B.
Further, as we discuss on page 1.8, Visit Anaheim did not include the estimated costs of activities it planned to provide or its surplus revenues in its annual reports as required by the city ordinance. Had the city ensured that Visit Anaheim had done so, the city would have been able to make a more informed decision about how much economic recovery funds it should have provided to Visit Anaheim, given the size of their reserves (restricted and unrestricted). 1 o Our methodology is consistent with that proposed by the city for estimating reserves. As we describe on page 29, Visit Anaheim did not discretely account for expenditures related to the tourism district assessment funds that it received. Absent this information, we used a methodology proposed by the city to estimate tourism district assessment reserves.
Additionally, the city expressed concern in its proposed methodology that tourism district assessment funds are commingled with other funding sources and that potential underspending could result in a buildup of reserves. Thus, we stand by our recommendation that the city require Visit Anaheim to separately track all expenditures related to the contract, prohibit the comingling of these funds with other revenue sources, and report related reserve balances.
CALIFORNIA STATE AUDITOR 45
January2024I Report2023-133
Visit Anaheim is incorrect in asserting that our methodology does not take into 11 account capitalized expenditures. Capitalized expenditures are incurred when an asset is purchased, such as equipment. In its response, Visit Anaheim fails to explain that capitalized expenditures are depreciated annually over a specified time, such as five years, and recognized as expenses each year. Our methodology captures all capitalized costs that were depreciated during our to year audit period; thus, Visit Anaheim's concern that we excluded capital expenditures from our estimates is incorrect.
efile Public Visual Render 11 ObjectId: 202303189349310275 - Submission: 2023-11-14 1 TIN: 51-0225353
Return of Organization Exempt From Income Tax
OMB No. 1545-0047
Form990
Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations) 2022
111, Do not enter social security numbers on this form as it may be made public.
Opea, to Public
Department of the Treasury
110- Go to wwwdrs.gov/form990 for instructions and the latest information.
Inspection
Internal Revenue Service
A For the 2022 calendar year, or tax year beginning 07-01-2022 , and ending 06-30-2023 B Check if applicable: C Name of organization
VISIT NEWPORT BEACH INC
O Address change
O Name change
O Initial return Doing business as
O Final return/terminated
O Amended return Number and street (or P.O. box if mail is not delivered to street address) Room/sui O Application pending 1600 NEWPORT CENTER DRIVE 120
City or town, state or province, country, and ZIP or foreign postal code NEWPORT BEACH, CA 926600926
F Name and address of principal officer:
LILY PEARSON
1200 NEWPORT CENTER DRIVE
NEWPORT BEACH CA 926600926
I Tax-exempt status: 0 501(c)(3) 0 501(c) ( 6 ) -4 (insert no.) 0 4947(a)(1) or 527 3 Website:l► WWW.VISITNEWPORTBEACH.COM
D Employer identification number
51-0225353
E Telephone number
(949) 719-6100
G Gross receipts $ 11,410,819
H(a) Is this a group return for
subordinates? OYes ONo
H(b) Are all subordinates
included? 0 Yes ONo
If "No," attach a list. See instructions.
H(c) Group exemption number PP,
K Form of organization: o Corporation 0 Trust 0 Association 0 Others I L Year of formation: 1975 I M State of legal domicile: CA Part I Summary
1 Briefly describe the organization's mission or most significant activities:
VISIT NEWPORT BEACH INC. IS A NONPROFIT 501(C)(6) MARKETING ORGANIZATION UNDER CONTRACT WITH THE CITY OF NEWPORT
BEACH TO MARKET AND PROMOTE THE NEWPORT BEACH BRAND AND TO PROMOTE TOURISM IN, AND SERVE THE NEEDS OF, VISITORS TO NEWPORT BEACH.
M
E
4 kS
2 Check this box F 0
3 Number of voting members of the governing body (Part A. line la) . 4 Number of independent voting members of the governing body (Part VI, line lb) . 5 Total number of individuals employed in calendar year 2021 (Part V, line 2a) . 6 Total number of volunteers (estimate if necessary) .
7a Total unrelated business revenue from Part VIII, column (C), line 12 . b Net unrelated business taxable income from Form 990-T, Part I, line 11 . 3 23
4 23
5 8
6 0
7a
0 7b
0 8 Contributions and grants (Part VIII, line lh) .
9 Program service revenue (Part VIII, line 2g) .
30 Investment income (Part VIII, column (A), lines 3, 4, and 7d ) . 11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and lle) 12 Total revenue —add lines 8 through 11 (must equal Part VIII, column (A), line 12) Prior Year
Current Year
0 0
9,445,421
11,240,912
2,272
125,907
0 44,000
9,447,693
11,410,819
r
ill
13 Grants and similar amounts paid (Part IX, column (A), lines 1-3 ) . 14 Benefits paid to or for members (Part IX, column (A), line 4) . 15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5-10) 16a Professional fundraising fees (Part IX, column (A), line Ile) . b Total fundraising expenses (Part IX, column (D), line 25) I►0 17 Other expenses (Part IX, column (A), lines lla-lld, llf-24e) . 18 Total expenses. Add lines 13-17 (must equal Part IX, column (A), line 25) 19 Revenue less expenses. Subtract line 18 from line 12 . 0 0
0 0
1,014,588
1,618,690
0 0
6,480,617
9,314,027
7,495,205
10,932,717
1,952,488
478,102
�
zLL
20 Total assets (Part X, line 16)
21 Total liabilities (PartX, line 26) .
22 Net assets or fund balances. Subtract line 21 from line 20 . . . . .
Beginning of Current Year
End of Year
8,210,060
9,937,582
520,3891
1,769,809
7,689,671
8,167,773
Part 11 Signature Block
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my
knowledge ano beliet, it is true, correct, and complete. Declaration of preparer (other than otticer) is based on all information of which preparer has any knowledge.
Sign
Here
LILY PEARSON VP OF FINANCE
Type or print name and title
May the IRS discuss this return with the preparer shown above? (see instructions) . Yes No For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11282Y Form 990 (2021)
Form 990 (2021) Page 2
Part III Statement of Program Service Accomplishments
Check if Schedule O contains a response or note to any line in this Part III 1 Briefly describe the organization's mission:
AS THE CITY OF NEWPORT BEACH'S OFFICIAL DESTINATION MARKETING ORGANIZATION, THE MISSION OF VISIT NEWPORT BEACH, INC. IS TO
PARTNER WITH THE TOURISM AND HOSPITALITY INDUSTRY BY PROTECTING AND NURTURING THE DESTINATION BRAND AND TO DELIVER
ADDITIONAL SPENDING BY LEISURE AND CONFERENCE VISITORS, LEADING TO ENHANCED COMMUNITY ECONOMIC VITALITY AND QUALITY OF LIFE.
2 Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990-EZ? . 0 Yes 0 No
If "Yes," describe these new services on Schedule O.
3 Did the organization cease conducting, or make significant changes in how it conducts, any program services? . 0 Yes O No
If "Yes," describe these changes on Schedule O.
4 Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses.
Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported. 4a (Code: ) (Expenses $ 6,804,787 including grants of $ ) (Revenue $ 6,491,957 )
THE ORGANIZATION RECEIVES A TRANSIT OCCUPANCY TAX (TOT) FROM THE CITY OF NEWPORT BEACH, AND IS RESPONSIBLE TO DEVELOP, PLAN, CARRY OUT AND
SUPERVISE A PROGRAM TO MARKET AND PROMOTE THE NEWPORT BEACH BRAND AND TO PROMOTE TOURISM IN, AND SERVE THE NEEDS OF, VISITORS TO THE CITY OF NEWPORT BEACH, AS WELL AS INCREASE THE AMOUNT OF TOT COLLECTED THROUGH ITS PROMOTIONAL ACTIVITIES. 4b (Code: ) (Expenses $ 4,127,930 including grants of $ ) (Revenue $ 4,748,955 ) THE ORGANIZATION ADMINISTERS THE CITY OF NEWPORT BEACH TOURISM BUSINESS IMPROVEMENT DISTRICT (TBID), WHICH WAS ESTABLISHED ON APRIL 28, 2009. TBID IS FUNDED BY CERTAIN LODGING BUSINESSES THROUGH AN ASSESSMENT ON SHORT-TERM ROOM RENTAL REVENUE. THE ORGANIZATION PROVIDES
MARKETING AND DIRECT SALES PROGRAMS TO INCREASE OVERNIGHT TOURISM, AND MARKET THE ASSESSED BUSINESSES AS TOURIST, MEETING AND EVENT DESTINATIONS, THEREBY INCREASING ROOM NIGHT SALES.
4C (Code: ) (Expenses $ including grants of $ ) (Revenue $ ) 4d Other program services (Describe in Schedule 0.)
(Expenses $ including grants of $ ) (Revenue $ )
4e Total program service expensesF 10,932,717
Form 990 (2021)
Paqe 3
Form 990(2021) Page 3
Checklist of Required Schedules
Yes No
1 Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If "Yes," complete No Schedule A . 1
2 Is the organization required to complete Schedule 8, Schedule of Contributors? See instructions. 2 No 3 Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates No for public office? If "Yes," complete Schedule C, Part I . 3 4 Section 501(c)(3) organizations. Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? If "Yes," complete Schedule C, Partll . 4 5 Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Rev. Proc. 98-19? If "Yes," complete Schedule C, Part 111 . . 5 No
6 Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If "Yes," complete Schedule D,Part I W .
6 No
7 Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas, or historic structures? If "Yes, " complete Schedule D, Partll W . 7 No
8 No
8 Did the organization maintain collections of works of art, historical treasures, or other similar assets? If "Yes," complete Schedule D, Part III W . .
9 Did the organization report an amount in Part X, line 21 for escrow or custodial account liability; serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If "Yes," complete Schedule D, Part IV W .
9 No
10 No
10 Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi endowments? If "Yes," complete Schedule D, Part V . . 11 If the organization's answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X, as applicable.
a Did the organization re ort an amount for land, buildings, and equipment in Part X, line 10? If "Yes," complete Schedule D, Part VI. .
1la
Yes
Ilb
No
b Did the organization report an amount for investments —other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part VII W . c Did the organization report an amount for investments —program related in Part X, line 13 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part Vlll W . ilc
No
d Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part IX W . l ld
Yes
e Did the organization report an amount for other liabilities in Part X, line 25? If "Yes," complete Schedule D, PartXI Ile
Yes
f Did the organization's separate or consolidated financial statements for the tax year include a footnote that addresses the organization's liability for uncertain tax positions under FIN 48 (ASC 740)? If "Yes,"complete Schedule D, PartXlej, L12 ra 12a Did the organization obtain se ate, independent audited financial statements for the tax year? If "Yes," complete Schedule D, Parts XI and XII 9 .
b Was the organization included in consolidated, independent audited financial statements for the tax year? I 12b If "Yes," and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI and XII is optional 13 Is the organization a school described in section 170(b)(1)(A)(ii)? If "Yes," complete Schedule E 14a Did the organization maintain an office, employees, or agents outside of the United States? . . b Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments value at $100,000 or more? If "Yes," complete Schedule F, Parts I and IV . . 15 Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? If "Yes,' complete Schedule F, Parts II and IV . . 16 Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? If "Yes, " complete Schedule F, Parts III and IV . . 17 Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, column (A), lines 6 and 11e? If "Yes," complete Schedule G, Part I. See instructions. 18 Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII, lines 1c and 8a? If "Yes," complete Schedule G, Part/1 . . 19 Did the organization report more than $15,000 of gross income from gaming activities on Part VIII, line 9a? If "Yes," complete Schedule G, Part I11 . .
20a Did the organization operate one or more hospital facilities? If "Yes," complete Schedule H . . b If "Yes" to line 20a, did the organization attach a copy of its audited financial statements to this return? 13 14a
14b
15 16
17 18
19 20a
20b
Yes
Yes
R:
No
No
No
No
No
No
No
No
No
21 Did the organization report more than $5,000 of grants or other assistance to any domestic organization or domestic 21 No government on Part IX, column (A), line 1? If "Yes,"complete Schedule I, Parts I and II . .
Form 990 (2021)
— Page 4
Form 990(2021) Page 4
Part I\ Checklist of Required Schedules (continued)
Yes
No
22 Did the organization report more than $5,000 of grants or other assistance to or for domestic individuals on Part IX, column (A), line 2? If "Yes," complete Schedule I, Parts I and III . 22 No
23 Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5, about compensation of the organization's current and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete Schedule I . W
23 Yes
24a Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If "Yes,"answer lines 24b through 24d and complete Schedule K. If "No," go to line 25a .
24a
No
24b
b Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception? . c Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease any tax-exempt bonds? .
24c
d Did the organization act as an "on behalf of issuer for bonds outstanding at any time during the year? . 24d
25a Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If "Yes," complete Schedule L, Part I . 25a
b Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization's prior Forms 990 or 990-EZ? If "Yes," complete 25b
Schedule L, Part I . .
26 Did the organization report any amount on Part X, line 5 or 22 for receivables from or payables to any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or 35% controlled entity or family member of any of these persons? If "Yes," complete Schedule L, PartII . . 26 No
27 Did the organization provide a grant or other assistance to any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or employee thereof, a grant selection committee member, or to a 35% controlled entity (including an employee thereof) or family member of any of these persons? If "Yes," complete 27 No
Schedule L,Part III . .
28 Was the organization a party to a business transaction with one of the following parties (see the Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions):
a A current or former officer, director, trustee, key employee, creator or founder, or substantial contributor? If "Yes," complete Schedule L, Part IV . .
28a
No
b A family member of any individual described in line 28a? If "Yes," complete Schedule L, Part IV . . 28b
No
c A 35% controlled entity of one or more individuals and/or organizations described in line 28a or 28b? If "Yes," complete Schedule L, Part IV .
28c
No
29 Did the organization receive more than $25,000 in non -cash contributions? If "Yes," complete Schedule M 29 No
30 Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If "Yes," complete Schedule M .
30 No
31 Did the organization liquidate, terminate, or dissolve and cease operations? If "Yes," complete Schedule N, Part 1 31 No
32 No
32 Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If "Yes," complete Schedule N, Part II .
33 Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? If "Yes," complete Schedule R, Part/ . IN 33 No
34 Yes
34 Was the organization related to any tax-exempt or taxable entity? If "Yes," complete Schedule R, Part11, III, or IV, and Part V, line 1 . V
35a
Did the organization have a controlled entity within the meaning of section 512(b)(13)? 35a
No
b
If `Yes' to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If "Yes," complete Schedule R, Part V, line 2 . 35b
36 Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non -charitable related organization? If "Yes," complete Schedule R, Part V, line 2 . 36 37
Did the organization conduct more than 5% of its activities through an entity that is not a related or anization and that is treated as a partnership for federal income tax purposes? If "Yes," complete Schedule R, Part VI W 37 No
38 Yes
38 Did the organization complete Schedule O and provide explanations on Schedule O for Part VI, lines 11b and 19? Note.
All Form 990 filers are required to complete Schedule O. .
Part V Statements Regarding Other IRS Filings and Tax Compliance Check if Schedule O contains a response or note to any line in this Part V .
Yes
No
la
Enter the number reported in box 3 of Form 1096. Enter -0- if not applicable la 58 b
Enter the number of Forms W-2G included on line la. Enter -0- if not applicable lb 0 c
Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? .
1c
Yes
Form 990 (2021)
Form 990 (2021)
Statements Regarding Other IRS Filings and Tax Compliance (continued) 2a Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements, filed for the calendar year ending with or within the year covered by this return . 2a 8
b If at least one is reported on line 2a, did the organization file all required federal employment tax returns? 2b
Yes
Note. If the sum of lines la and 2a is greater than 250, you may be required to e-file. See instructions. 3a Did the organization have unrelated business gross income of $1,000 or more during the year? . 3a
No
b If "Yes," has it filed a Form 990-T for this year?If "No" to line 3b, provide an explanation in Schedule O . 3b
4a At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)? 4a
No
b If "Yes," enter the name of the foreign country: 11-- See instructions for filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
Sa
No
Sa Was the organization a party to a prohibited tax shelter transaction at any time during the tax year? . b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? Sb
No
c If "Yes," to line 5a or 5b, did the organization file Form 8886-T? Sc
6a Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization 6a
No
solicit any contributions that were not tax deductible as charitable contributions? . . b If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? .
6b
7 Organizations that may receive deductible contributions under section 170(c). a Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and services 7a
provided to the payor? . .
b If "Yes," did the organization notify the donor of the value of the goods or services provided? 7b
c Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282? .
7c
d If "Yes," indicate the number of Forms 8282 filed during the year . 7d e Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? 7e
f Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract? 7f
g If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required? .
7g
h If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C? .
7h
8 Sponsoring organizations maintaining donor advised funds. Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time during the year? 8 9 Sponsoring organizations maintaining donor advised funds. a
Did the sponsoring organization make any taxable distributions under section 4966? 9a
b
Did the sponsoring organization make a distribution to a donor, donor advisor, or related person? 9b
10 Section 501(c)(7) organizations. Enter:
a
Initiation fees and capital contributions included on Part Vill, line 12 10a b
Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities 10b 11 Section 501(c)(12) organizations. Enter:
a
Gross income from members or shareholders . 11a
b
Gross income from other sources. (Do not net amounts due or paid to other sources against amounts due or received from them.) . 11b
12a
Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041? 12a
b
If "Yes," enter the amount of tax-exempt interest received or accrued during the year. 12b
13 Section 501(c)(29) qualified nonprofit health insurance issuers. a
Is the organization licensed to issue qualified health plans in more than one state? Note. See the instructions for additional information the organization must report on Schedule O. 13a
b Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans 13b c
Enter the amount of reserves on hand 13c
14a
Did the organization receive any payments for indoor tanning services during the tax year? . 14a
b
If "Yes," has it filed a Form 720 to report these payments?If "No," provide an explanation in Schedule 0 14b
No
15 Is the organization subject to the section 4960 tax on payment(s) of more than $1,000,000 in remuneration or excess parachute payment(s) during the year? . .
If "Yes," see the instructions and file Form 4720, Schedule N. 16 Is the organization an educational institution subject to the section 4968 excise tax on net investment income? .
If "Yes," complete Form 4720, Schedule O.
17 Section 5O1(c)(21) organizations. Did the trust, any disqualified person, or mine operator engage in any activities that would result in the imposition of an excise tax under section 4951, 4952, or 4953? .
If "Yes," complete Form 6069.
Form 990(2021)
No
No
Form 990 (2021)
Part VI Governance, Management, and Disclosure. For each "Yes" response to lines 2 through 7b below, and for a "No" response to lines 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions.
Check if Schedule O contains a response or note to any line in this Part VI Section A. Governing Bodv and Management
is Enter the number of voting members of the governing body at the end of the tax year la If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O.
b Enter the number of voting members included in line la, above, who are independent 23 lb I 23
2 Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? . .
3 Did the organization delegate control over management duties customarily performed by or under the direct supervisior of officers, directors or trustees, or key employees to a management company or other person? . 4 Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? . 5 Did the organization become aware during the year of a significant diversion of the organization's assets? . 6 Did the organization have members or stockholders? . . 7a Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? . .
b Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? . .
8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following:
a The governing body? . .
b Each committee with authority to act on behalf of the governing body? . . 9 Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the organization's mailing address? If "Yes," provide the names and addresses in Schedule O . .
Yes I No
2 No
3 No
4 No
5 No
6 No
7a No
7b No
8a Yes
8b Yes
9 No
Section B. Policies This Section a requests information about policies not required by the Internal Revenue Code.
Yes
No
10a Did the organization have local chapters, branches, or affiliates? . l0a
No
b If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes? 1Ob
Ila Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? .
Ila
Yes
b Describe on Schedule O the process, if any, used by the organization to review this Form 990. . . 12a Did the organization have a written conflict of interest policy? If "No," go to line 13 . 12a
Yes
b Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? .
12b
Yes
c Did the organization regularly and consistently monitor and enforce compliance with the policy? If "Yes," describe on Schedule O how this was done .
12c
Yes
13 Did the organization have a written whistleblower policy? . 13 Yes
14 Did the organization have a written document retention and destruction policy? . 14 Yes
15 Did the process for determining compensation of the following persons include a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision? a The organization's CEO, Executive Director, or top management official . 15a
Yes
b Other officers or key employees of the organization . 15b
No
If "Yes" to line 15a or 15b, describe the process on Schedule O. See instructions. 16a Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? .
16a
No
b If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization's exempt status with respect to such arrangements? . .
l6b
Section C. Disclosure
17 List the states with which a copy of this Form 990 is required to be filedl► CA
18 Section 6104 requires an organization to make its Form 1023 (1024 or 1024-A, if applicable), 990, and 990-T (section 501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply. 0 Own website 0 Another's website 0 Upon request 0 Other (explain in Schedule 0) 19 Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. 20 State the name, address, and telephone number of the person who possesses the organization's books and records:
SLILY PEARSON 1600 NEWPORT CENTER DR SUITE 120 NEWPORT BEACH, CA 926600926 (949) 467-2746
Form 990(2021)
Form 990 (2021)
Part VI Compensation of Officers, Directors,Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
Check if Schedule 0 contains a response or note to any line in this Part VII 0 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees is Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization's tax year.
t List all of the organization's current officers, directors, trustees (whether individuals or organizations), regardless of amount of compensation. Enter -0- in columns (D), (E), and (F) if no compensation was paid. * List all of the organization's current key employees, if any. See the instructions for definition of "key employee." a List the organization's five current highest compensated employees (other than an officer, director, trustee or key employee) who received reportable compensation (box 5 of Form W-2, Form 1099-MISC, and/or box 1 of Form 1099-NEC) of more than $100,000 from the organization and any related organizations.
a List all of the organization's former officers, key employees, or highest compensated employees who received more than $100,000 of reportable compensation from the organization and any related organizations. a List all of the organization's former directors or trustees that received, in the capacity as a former director or trustee of the organization, more than $10,000 of reportable compensation from the organization and any related organizations.
See the instructions for the order in which to list the persons above. 0 Check this box if neither the organization nor any related organization compensated any current officer, director, or trustee. (A)
(13)
(C)
(D)
(E)
(F)
Name and title
Average
Position (do not check more
Reportable
Reportable
Estimated
hours per
than one box, unless
compensation
compensation
amount of other
week (list
person is both an officer
from the
from related
compensation
any hours
and a director/trustee)
organization (W-
organizations
from the
for related
2/1099-
(W-2/1099-
organization and
_
=
organizations
—
_
i_
Sao
MISC/1099-
MISC/1099-
related
below dotted.
.tr
R.
rt}
NEC)
NEC)
organizations
line)`
1-
c�
r
�
_
d+
�
rt�
(1) DAVID BEEK
1.00 ...................................................................... ................
x
0 0
0 DIRECTOR
(2) TANYA THOMAS
1.00 ................ ................................................ .................
x
0 0
0 DIRECT......OR
(3) STEVE ROSANKY
1.00 ...................................................................... ................
x
0 0
0 DIRECTOR
(4) SHARON WOOD
1.00 ...................................................................... .................
x
0 0
0 DIRECTOR
(5) RUSH HILL
1.00 ....R
.............................................................. .................
x
0 0
0 DIRECTO....
(6) PHIL RAVENNA
1.00 ...................................................................... ................
x
0 0
0 DIRECTOR
(7) AMY DEIFT
1.00 ...................................................................... .................
x
0 0
0 DIRECTOR
(8) ANTHONY HARTWELL
1.00 ...................................................................... ................
x
0 0
0 DIRECTOR
(9) MARKUS KOHN
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(10) MARIO MAROVIC
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(11) ANTONELLA CASTRO
1.00 ....R
.I'R-...........................................................
DIRECTO.
(12) LINDA BEIMFOHR
1.00 ...................................................................... ................
X
X
0 0
0 SECRETARY
(13) ANDRE BROSE
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(14) JON LEWIS
1.00 .....
............................................................... ................
X
0 0
0 DIRECTOR..
(15) ANNIE PAINTING
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(16) TONY PETROS
1.00 ....R
.I'R-...........................................................
DIRECTO.
(17) HOMER BLUDAU
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
— Page 8
Form 990(2021)
Form 990 (2021)
Part VII Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued)
(A)
(B)
(C)
(D)
(E)
(F)
Name and title
Average
Position (do not check more
Reportable
Reportable
Estimated
hours per
than one box, unless
compensation
compensation
amount of other
week (list
person is both an officer
from the
from related
compensation
any hours
and a director/trustee)
organization (W-
organizations
from the
for related
2/1099-
(W-2/1099-
organization and
O —
m =
organizations
E
't_
MISC/1099-
MISC/1099-
related
below dotted
a
�
enR:
M
NEC)
NEC)
organizations
line)
c
—
-.
(18) HENRY PYLE
1.00 .....................................................................
X
0 0
0 DIRECTOR
.......................
(19) GREG SCHWENK
1.00 ..................................................................... x
o
0 0
EX-OFFICIO MEMBER
.......................
(20) GERARD WIDDER
1.00 .......................................................................
X
X
0 0
0 VICE CHAIRPERSON
"""""""""
"'"
(21) CANDACE BISCONTE
1.00 .......................................................................
X
X
0 0
0 TREASURER
.......................
(22) JASON AL -IMAM
1.00 .......................................................................
X
0 0
0 EX-OFFICIO MEMBER
.......................
(23) CHARLENE REYNOLDS
1.00 ..R
.......................................................................................
X
0 0
0 EX-OFFICI..O MEMBE....
(24) DEB BIE SNAVELY
1.00 .....................................................................
X
X
0 0
0 CHAIRPERSON
......................
(25) DAVID HOFFMAN
1.00 ......................................................... . ....R
X
0 0
0 I' R-
DRECTO.
......................
(26) WASIM KAZI
1.00 . ....R
..........................................................
X
0 0
0 I' R-
DRECTO.
......................
(27) MICHELLE DONAHUE
40.00 ............................................................X 230,415
0 30,849
11-1 0r 0
(28) LILY PEARSON
12.00 ............................................................................... .........
X
0 174,690
27,375
VP OF FINANCE
2...'
8.00 (29) GARY SHERWIN
12.00 .......`D.EN......................................................................2' .'0'0
....
X
0 350,405
59,788
PRESIDENT/CEO
28.00 (30) DOUG MCCLAIN
40.00 .....................................................................
X
0 168,520
17,972
CHIEF MARKETING OFFICER
"""""""""
""
(31) ASHLEY JOHNSON
40.00 .....................................................................
X
0 41,635
16,267
CHIEF MARKETING OFFICER
.......................
(32) AMANDA KLIEM
40.00 .....................................................................
X
133,921
0 20,248
DIRECTOR OF SALES
.......................
(33) JANE DRYDEN
40.00 .....................................................................
X
123,600
0 20,070
GROUP MARKETING DIRECTOR
"""""""""
""
(34) MICHELLE DEVINE
40.00 .......................................................................
X
119,113
0 19,990
NATIONAL ACCOUNT DIRECTOR
.......................
(35) ENRIQUE PAULID
40.00 X
117,797
0 18,846
NATIONAL ACCOUNT DIRECTOR
"""""""""
""
lb Sub -Total .
c Total from continuation sheets to Part VII, Section A . ► 735,250
231,405
d Total (add lines lb and 1c) . ► 724,8461
2 Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization PP, 5
Yes No
3 Did the organization list any former officer, director or trustee, key employee, or highest compensated employee on line la? If "Yes," complete Schedule J for such individual . 3 No 4 For any individual listed on line la, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If "Yes," complete Schedule] for such individual .
4 Yes
5 Did any person listed on line la receive or accrue compensation from any unrelated organization or individual for services rendered to the organization?If "Yes," complete Schedule J for such person . 5 No Section B. Independent Contractors
1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation from the oraanization. Report compensation for the calendar vear ending with or within the oraanization's tax vear. (A)
Name and business address
(B)
Description of services
(c)
Compensation
2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization P, 0
corm 9qu (zuzi)
Form 990(2021) Page 9
Part VIII Statement of Revenue
i-II N II J 11CUUIG V 1.V 11lQIIIJ Q I—PUll— VI 11— lV -ly Illlc III LIOJ
(A)
(B)
(C)
(D)
Total revenue
Related or
Unrelated
Revenue
exempt
business
excluded from
function
revenue
tax under sections
revenue
512 - 514
to derated campaigns
is
Ca E �mbership dues
lb
to M
'. ndraising events
is
v} E
9lated organizations
ld
vernment grants (contributions)
G
r � re
le
f All other contributions, gifts, grants,
and similar amounts not included if
above
9 Noncash contributions included in
lines la - lf:$ 19
h Total. Add lines la -If . 111P�
Business Code
2a TRANSIENT OCCUPANCY TAX (TOT)
541610
541610
TOURISM BUSINESS IMPROVEMENT DIST
q7
i=
4] -
.5
i
o -
f All other program service revenue.
9 Total. Add lines 2a-2f. . . . . F
11,240,912
3 Investment income (including dividends, interest, and other similar amounts) . 1111-
4 Income from investment of tax-exempt bond proceeds pp- 5 Royalties . F
(i) Real I (ii) Personal
6a Gross rents 6a
b Less: rental
expenses 6b
c Rental income
or (loss) 6c
d Net rental income or (loss) .
(i) Securities (ii) Other
7a Gross amount
from sales of 7a
assets other
than inventory
b Less: cost or 7b
other basis and
sales expenses
C Gain or (loss) 7C
d Net gain or (loss) . .
"a Gross income from fundraising events
(not including $ of
contributions reported on line lc).
n See Part IV, line 18 . Sa
W
b Less: direct expenses . 8b
L
0 c Net income or (loss) from fundraising events
O
�a Gross income from gaming activities.
See Part IV, line 19 . 9a
b Less: direct expenses . 9b
c Net income or (loss) from gaming activities
10aGross sales of inventory, less
returns and allowances 10a
b Less: cost of goods sold 10b
11. 6,491,9571 6,491,957
125,
c Net income or (loss) from sales of inventory llp�
Miscellaneous Revenue Business Code
11aOTHER INCOME 541610 44,
4,748,955
125,907
44,000
b
c
d All other revenue . .
e Total. Add lines 11a-11d . 0-
12 Total revenue. See instructions . 110-
Form 990(2021)
44,000
11,410,819 11, 240,912
169,907
Form 990 (2021)
Part IX Statement of Functional Expenses
Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A).
Check if Schedule O contains a response or note to any line in this Part IX u Do not include amounts reported on lines 6b,
7b, 8b, 9b, and 10b of Part Vill.
(a)
Total expenses
(B)
Program service
expenses
(c)
Management and
general expenses
(°)
Fundraising
expenses
1 Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21 . .
2 Grants and other assistance to domestic individuals. See Part IV, line 22 . .
3 Grants and other assistance to foreign organizations, foreign governments, and foreign individuals. See Part IV, lines 15 and 16.
4 Benefits paid to or for members . .
5 Compensation of current officers, directors, trustees, and key employees . .
6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) . .
7 Other salaries and wages .
8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) . .
9 Other employee benefits .
10 Payroll taxes
11 Fees for services (non -employees):
a Management . .
b Legal . .
c Accounting
d Lobbying . .
e Professional fundraising services. See Part IV, line 17 f Investment management fees . .
g Other (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O)
12 Advertising and promotion
13 Office expenses .
14 Information technology . .
15 Royalties . .
16 Occupancy .
17 Travel .
18 Payments of travel or entertainment expenses for any federal, state, or local public officials .
19 Conferences, conventions, and meetings . .
20 Interest . .
21 Payments to affiliates . .
22 Depreciation, depletion, and amortization
23 Insurance
'2a nrtior
308,399
949,986
267,216
93,089
47,909
8,742,659
11,395
194,105
31,844
28,316
7,129
miscellaneous expenses in line 24e. If line 24e amount
exceeds 10% of line 25, column (A) amount, list line 24e expenses on Schedule O.)
104,240
a EQUIPMENT
b POSTAGE & SHIPPING
101,866
c MEETING & EDUCATION
32,246
d REPAIRS & MAINTENANCE
12,097
e All other expenses
221
25 Total functional expenses. Add lines 1 through 24e
10,932,717
26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined
educational campaign and fundraising solicitation.
Check here 0- 0 if following SOP 98-2 (ASC 958-720).
Form 990 (2021)
cart x Balance Sheet
Check if Schedule O contains a response or note to any line in this Part IX .
Form 990 (2021)
N
(A)
(B)
Beginning of year
End of year
1 Cash -non -interest -bearing
4,792,516
1 2,601,955
2 Savings and temporary cash investments .
2,952,978
2 5,313,443
3 Pledges and grants receivable, net
3 4 Accounts receivable, net .
4 48,279
5 Loans and other receivables from any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or 35% controlled entity or family member of any of these persons 5 6 Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), and persons described in section 4958(c)(3)(B) . . . 6 7 Notes and loans receivable, net .
7 Q
8 Inventories for sale or use
9 Prepaid expenses and deferred charges .
8 425,427
9 601,564
10a Land, buildings, and equipment: cost or other
basis. Complete Part VI of Schedule D 10a 283,167
b Less: accumulated depreciation 10b 139,909
29,520
10c
143,258
11 Investments —publicly traded securities .
11 12 Investments —other securities. See Part IV, line 11 . 12 13 Investments —program -related. See Part IV, line 11 . 13 14 Intangible assets .
14 15 Other assets. See Part IV, line 11
9,619
15 1,229,083
16 Total assets. Add lines 1 through 15 (must equal line 33) . 8,210,060
16 9,937,582
17 Accounts payable and accrued expenses
464,769
17 420,975
18 Grants payable .
18 19 Deferred revenue .
19 20 Tax-exempt bond liabilities .
20 21 Escrow or custodial account liability. Complete Part IV of Schedule D 21 22
22 Loans and other payables to any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or 35% controlled entity or family member of any of these persons .
_J
23 Secured mortgages and notes payable to unrelated third parties 23 24 Unsecured notes and loans payable to unrelated third parties 24 25 Other liabilities (including federal income tax, payables to related third parties, 55,620
25 1,348,834
and other liabilities not included on lines 17 - 24).
Complete Part X of Schedule D
520,389
26 1,769,809
26 Total liabilities. Add lines 17 through 25
0 r
Organizations that follow FASB ASC 958, check here 11- 0 and rmmnlPtP linpc 77. 7R_ .17_ and 33_
27 Net assets without donor restrictions .
28 Net assets with donor restrictions .
I 7,689,671 I
27 I
8,167,773
I I
28 u_
Organizations that do not follow FASB ASC 958, check here PP, 0 and complete lines 29 through 33.
29 Capital stock or trust principal, or current funds
I I
29 30 Paid -in or capital surplus, or land, building or equipment fund . 31 Retained earnings, endowment, accumulated income, or other funds 32 Total net assets or fund balances .
I I
30 31
7,689,6711
32 1
8,167,773
Z
33 Total liabilities and net assets/fund balances .
I 8,210,0601
33 I
9,937,582
Form 990 (2021)
Form 990 (2021) Page 12
Part XI Reconcilliation of Net Assets
Check if Schedule O contains a response or note to any line in this Part XI 0 i Total revenue (must equal Part Vill, column (A), line 12) . 1 11,410,819
2 Total expenses (must equal Part IX, column (A), line 25) . 2 10,932,717
3 478,102
3 Revenue less expenses. Subtract line 2 from line 1 .
4 Net assets or fund balances at beginning of year (must equal Part X, line 32, column (A)) 4 7,689,671
5 Net unrealized gains (losses) on investments .
5 6 Donated services and use of facilities .
6 7 Investment expenses .
7 8 Prior period adjustments .
8 9 Other changes in net assets or fund balances (explain in Schedule O) . 9 0
10 Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 32, column (B)) 10 8,167,773
i XII Financial Statements and Reporting
Check if Schedule O contains a response or note to any line in this Part XII Yes
I No
1 Accounting method used to prepare the Form 990: 0 Cash 0 Accrual 0 Other If the organization changed its method of accounting from a prior year or checked "Other," explain on Schedule O.
2a Were the organization's financial statements compiled or reviewed by an independent accountant? 2a No If'Yes; check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both:
0 Separate basis 0 Consolidated basis 0 Both consolidated and separate basis b Were the organization's financial statements audited by an independent accountant? 2b Yes If `Yes; check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both:
0 Separate basis 0 Consolidated basis 0 Both consolidated and separate basis c If "Yes," to line 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant? 2c Yes If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O. 3a As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133?
b If "Yes," did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits.
Form 990 (2021)
Additional Data
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Software Version:
3a I I No
3b �
Form 990 (2021)
Return to Form
Form 990, Special Condition Description:
efile Public Visual Render I Ob'ectIcl: 202303189349310275 - Submission: 2023-11-14 1 TIN: 51-0225353 SCHEDULE D Supplemental Financial Statements OMB No. 1545-0047 (Form 990) 2022
►
Complete if the organization answered "Yes," on Form 990, Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b.
Department of the Treasury I~ Attach to Form 990. )pe...
Internal Revenue Service F Go to www.irs.gov/Form990 for instructions and the latest information.
Name of the organization Employer identification number
VISIT NEWPORT BEACH INC
51-0225353
Part I Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts.
Complete if the organization answered "Yes" on Form 990 Part IV line 6. (a) Donor advised funds (b) Funds and other accounts
1 Total number at end of year . . . . . . . . .
2 Aggregate value of contributions to (during year)
3 Aggregate value of grants from (during year)
4 Aggregate value at end of year . . . . . . . .
5 Did the organization inform all donors and donor advisors in writing that the assets held in donor advised funds are the organization's property, subject to the organization's exclusive legal control? . . . . . . . . . . . . 0 Yes 0 No 6 Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Yes 0 No Part II Conservation Easements.
Complete if the organization answered "Yes" on Form 990, Part IV, line 7. 1 Purpose(s) of conservation easements held by the organization (check all that apply). 0 Preservation of land for public use (e.g., recreation or education) 0 Preservation of an historically important land area 0 Protection of natural habitat 0 Preservation of a certified historic structure 0 Preservation of open space
2 Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year. I Held at the End of the Year a Total number of conservation easements . . . . . . . . . . . . . . . . . . . . . . 2a b Total acreage restricted by conservation easements . . . . . . . . . . . . . . . . . . . . 2b c Number of conservation easements on a certified historic structure included in (a) . . . . . 2c d Number of conservation easements included in (c) acquired after 7/25/06, and not on a historic 2d structure listed in the National Register . . .
3 Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax year F
4 Number of states where property subject to conservation easement is located F 5 Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and enforcement of the conservation easements it holds? . . . . . . . . . . . . 0 Yes 0 No 6 Staff and volunteer hours devoted to monitoring, inspecting, handling of violations, and enforcing conservation easements during the year F
7 Amount of expenses incurred in monitoring, inspecting, handling of violations, and enforcing conservation easements during the year F$
8 Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(13)(i) and section 170(h)(4)(13)(ii)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Yes 0 No 9 In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and balance sheet, and include, if applicable, the text of the footnote to the organization's financial statements that describes the organization's accounting for conservation easements.
Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" on Form 990, Part IV, line 8. la If the organization elected, as permitted under FASB ASC 958, not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items. b If the organization elected, as permitted under FASB ASC 958, to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items:
(1) Revenue included on Form 990, Part VIII, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . F $ (ii)Assets included in Form 990, Part X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► $ 2 If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the following amounts required to be reported under FASB ASC 958 relating to these items:
a Revenue included on Form 990, Part VIII, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . i $ b Assets included in Form 990, Part X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► $ For Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 52283D Schedule D (Form 990) 2021
Schedule D (Form 990) 2021 Page 2
Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued) 3 Using the organization's acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply):
a 0 Public exhibition d 0 Loan or exchange programs
b e
Scholarlyresearch 0 Other_................................................................................................. c Preservation for future generations
4 Provide a description of the organization's collections and explain how they further the organization's exempt purpose in Part XIII.
5 During the year, did the organization solicit or receive donations of art, historical treasures or other similar assets to be sold to raise funds rather than to be maintained as part of the organization's collection?. . . 0 Yes 0 No Escrow and Custodial Arrangements.
Complete if the organization answered "Yes" on Form 990, Part IV, line 9, or reported an amount on Form 990, Part X, line 21.
la Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not included on Form 990, Part X? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • • 0 Yes 0 No b If "Yes," explain the arrangement in Part XIII and complete the following table: Amount c Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . lc d Additions during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . ld e Distributions during the year . . . . . . . . . . . . . . . . . . . . . . . . . . le f Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . if 2a Did the organization include an amount on Form 990, Part X, line 21, for escrow or custodial account liability? ... 0 Yes 0 No b If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided in Part XIII . . . . 0 Part V Endowment Funds.
Cmmnlete if the nraani7atinn answered "Yes" nn Fnrm 990_ Part TV_ line 1 n- is Beginning of year balance . .
b Contributions . .
c Net investment earnings, gains, and losses
d Grants or scholarships . .
e Other expenditures for facilities
and programs . .
f Administrative expenses . .
g End of year balance . .
(a) Current year
(b) Prior year
(c) Two years back
(d) Three years back
(e) Four years back
2 Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as:
a Board designated or quasi -endowment F .......................................... b Permanent endowment F
..........................................
e Term endowment F..........................................
The percentages on lines 2a, 2b, and 2c should equal 100%. 3a Are there endowment funds not in the possession of the organization that are held and administered for the organization by:
Yes No
(i) Unrelated organizations .
3a(i)
(ii) Related organizations .
3a(ii)
b If "Yes" on 3a(ii), are the related organizations listed as required on Schedule R? . 3b
4 Describe in Part XIII the intended uses of the organization's endowment funds.
Part VI Land, Buildings, and Equipment.
Complete if the organization answered "Yes" on Form 990 Part IV line lla. See Form 990 Part X line 10.
Description of property
(a) Cost or other basis
(b) Cost or other basis (other)
(c) Accumulated depreciation
(d) Book value
(investment)
la Land . .
b Buildings . .
28,615
2,144
26,471
c Leasehold improvements
d Equipment .
254,552
137,765
116,787
e Other . .
Total. Add lines la through le. (Column (d) must equal Form 990, Part X, column (B), line 10(c).) ► 143,258
Schedule
D (Form 990) 2021
Schedule D (Form 990) 2021
Part v11 Investments - Other Securities.
Cmmnlata if tha nrnani7atinn ancwarari "Yac" nn Fnrm ggfl_ Part TV ling 11 h_Saa Fnrm ggfl_ Part X_ ling 1 7_ (a) Description of security or category
(including name of security)
(b)
Book
value
(c) Method of valuation:
Cost or end -of -year market value
(1) Financial derivatives .
(2) Closely -held equity interests .
(3)Other
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
Total. (Column (b) must equal Form 990, Part X, col. (8) line 12.) Part VIII Investments - Program Related.
Complete if the organization answered 'Yes' on Form 990, Part IV, line 11c. See Form 990, Part X, line 13. (a) Description of investment
(b) Book value
(c) Method of valuation:
Cost or end -of -year market value
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(e) line 13.) Other Assets.
Cmmnlete if the ornani72tinn answered 'Yes' nn Form 990. Part TV. line 11 d. see Form q9n. Part X. line 15. (a) Description
(b) Book value
(1)WEBSITE DEVELOPMENT COSTS
55,665
(2)OPERATING SUBLEASE RIGHT -OF -USE ASSETS
1,163,799
(3)DEPOSITS
9,619
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col. (8) line 15.) 1,229,083
Fart _ Other Liabilities.
Complete if the organization answered 'Yes' on Form 990 Part IV line 11e or 11f.See Form 990 Part X line 25.
1. (a) Description of liability I (b) Book value
Federal income taxes
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(e) line 25.) F 1,348,834
2. Liability for uncertain tax positions. In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII 0 Schedule D (Form 990) 2021
Schedule D (Form 990) 2021
Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return.
Complete if the organization answered 'Yes' on Form 990 Part IV line 12a.
1 Total revenue, gains, and other support per audited financial statements . i
11,410,819
2 Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a
Net unrealized gains (losses) on investments .
2a
b
Donated services and use of facilities .
2b
c
Recoveries of prior year grants .
2c
d
Other (Describe in Part XIII.) .
2d
e
Add lines 2a through 2d . . . .
2e
0 3
Subtract line 2e from line i .
3 11,410,819
4 Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a
Investment expenses not included on Form 990, Part VIII, line 7b 4a
b
Other (Describe in Part XIII.) .
4b
c
Add lines 4a and 4b .
4c
0 5
Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) .
5 11,410,819
Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return.
Complete if the organization answered 'Yes' on Form 990 Part IV line 12a. 1 Total expenses and losses per audited financial statements . 1 10,932,717
2 Amounts included on line 1 but not on Form 990, Part IX, line 25:
a
Donated services and use of facilities .
2a
b
Prior year adjustments .
2b
c
Other losses .
2c
d
Other (Describe in Part XIII.) .
2d
e
Add lines 2a through 2d . . . . . . . . . .
2e
0 3
Subtract line 2e from line 1 .
3 10,932,717
4 Amounts included on Form 990, Part IX, line 25, but not on line 1:
a
Investment expenses not included on Form 990, Part VIII, line 7b 4a
b
Other (Describe in Part XIII.) .
4b
c
Add lines 4a and 4b .
4c
0 5
Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) .
5 10,932,717
Part XIII Supplemental Information
Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines la and 4; Part IV, lines lb and 2b; Part V, line 4; Part X, line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information.
Return Reference Explanation
PART X, LINE 2: THE ORGANIZATION ANNUALLY EVALUATES TAX POSITIONS AS PART OF THE PREPARATION OF ITS EXEMPT TAX RETURN. THIS PROCESS INCLUDES AN ANALYSIS OF WHETHER TAX POSITIONS THE
ORGANIZATION TAKES WITH REGARD TO A PARTICULAR ITEM OF INCOME OR DEDUCTION WOULD
MEET THE DEFINITION OF AN UNCERTAIN TAX POSITION UNDER CURRENT ACCOUNTING GUIDANCE. THE ORGANIZATION BELIEVES ITS TAX POSITIONS ARE APPROPRIATE BASED ON CURRENT FACTS AND CIRCUMSTANCES. THE ORGANIZATION'S POLICY IS TO RECOGNIZE
INTEREST ACCRUED RELATED TO UNRECOGNIZED TAX BENEFITS IN INTEREST EXPENSE AND PENALTIES IN OPERATING EXPENSES. AT JUNE 30, 2023 AND 2022, THE ORGANIZATION DID NOT HAVE ANY UNRECOGNIZED TAX BENEFITS. THE ORGANIZATION IS NO LONGER SUBJECT TO U.S.
FEDERAL, STATE OR LOCAL INCOME TAX EXAMINATIONS BY TAX AUTHORITIES FOR YEARS BEFORE 2019.
Schedule D (Form 990) 2021
Additional Data
Software ID:
Software Version:
Return to Form
erne !'uol IC Visual Kenuer I VD ecizu: LVL3V 31a934931UL/D - DUomission: LVL3-11-14 I I IN: D1-V LL737� Schedule 3
Compensation Information
OMB No. 1545-0047
(Form 990)
2�22
For certain Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees
F Complete if the organization answered "Yes" on Form 990, Part IV, line 23. ► Attach to Form 990.
Department of the Treasury
F Go to wwwdrs.gov/Form990 for instructions and the latest information.
Open t0 Public
VISIT NEWPORT BEACH INC
51-0225353
Part I Questions Regarding Compensation
Yes
No
la Check the appropiate box(es) if the organization provided any of the following to or for a person listed on Form 990, Part VII, Section A, line la. Complete Part III to provide any relevant information regarding these items. 0 First-class or charter travel 0 Housing allowance or residence for personal use 0 Travel for companions 0 Payments for business use of personal residence 0 Tax idemnification and gross -up payments 0 Health or social club dues or initiation fees 0 Discretionary spending account 0 Personal services (e.g., maid, chauffeur, chef) b If any of the boxes on Line la are checked, did the organization follow a written policy regarding payment or reimbursement or provision of all of the expenses described above? If "No," complete Part III to explain . 1b
2 Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all directors, trustees, officers, including the CEO/Executive Director, regarding the items checked on Line la? . 2 Yes
3 Indicate which, if any, of the following the filing organization used to establish the compensation of the organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III.
Compensation committee 0 Written employment contract
Independent compensation consultant 0 Compensation survey or study 0 Form 990 of other organizations 0 Approval by the board or compensation committee 4 During the year, did any person listed on Form 990, Part VII, Section A, line la, with respect to the filing organization or a related organization:
a Receive a severance payment or change -of -control payment? . 4a
No
4b
No
b Participate in, or receive payment from, a supplemental nonqualified retirement plan? . 4c
No
c Participate in, or receive payment from, an equity -based compensation arrangement? .
If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.
Only 501(c)(3), 501(c)(4), and 501(c)(29) organizations must complete lines 5-9. 5 For persons listed on Form 990, Part VII, Section A, line la, did the organization pay or accrue any compensation contingent on the revenues of:
a The organization? .
Sa
5b
b Any related organization? .
If "Yes," on line 5a or 5b, describe in Part III.
6 For persons listed on Form 990, Part VII, Section A, line la, did the organization pay or accrue any compensation contingent on the net earnings of:
a The organization? .
6a
b Any related organization? .
6b
If "Yes," on line 6a or 6b, describe in Part III.
7 For persons listed on Form 990, Part VII, Section A, line Ia, did the organization provide any nonfixed payments not described in lines 5 and 6? If "Yes," describe in Part III . 7 8 Were any amounts reported on Form 990, Part VII, paid or accured pursuant to a contract that was subject to the initial contract exception described in Regulations section 53.4958-4(a)(3)? If "Yes," describe in Part III . .
8 9 If "Yes" on line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section
53.4958-6(c)? .
9 :or Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 50053T Schedule 3 (For
Schedule I (Form 990) 2022 Page 2
Part II Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed.
For each individual whose compensation must be reported on Schedule 3, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list anv individuals that are not listed on Form 990. Part VII.
Note. The sum of columns B - iii for each listed individual must equal the total amount of Form 990 Part VII Section A line Ia ap licable column D and E amounts
for that individual.
(A) Name and Title
(B) Breakdown of W-2, 1099-MISC compensation,
(C) Retirement
(D) Nontaxable
(E) Total of
(F)
and/or 1099-NEC
and other
benefits
columns
Compensation in
deferred
(B)(i)-(D)
column (B)
(i) Base
(iii)
(Ill) Other
compensation
Bonus &
reportable
compensation
reported as
incentive
compensation
deferred on prior
compensation
Form 990
1GARY SHERWIN
(i)
0 0
0 0
0 0
0 PRESIDENT/CEO
- - - - - - - - -
_________
_________
_________
________
______
_________
----
350,405
0 0
13,357
46,431
-
0 410,193
2MICHELLE DONAHUE
(i)
230,415
0 0
9,720
21,129
261,264
0 CHIEF SALES OFFICER
- - - - - - - - -
(ii)
- - - -
- - - -
- - - -
- - - - -
- - - - - -
- - - -
0 0
0 0
0 -
0 0
3LILY PEARSON
(i)
0 0
0 0
0 0
0 VP OF FINANCE
- - - - - - - --
---------
- -- --- ---
-- - - -- - --
-- - - -- --
- -- - --
---------
----
174,690
0 0
8,688
18,687
-
0 202,065
4DOUG MCCLAIN
(j)
0 0
0 0
0 0
CHIEF MARKETING OFFICER
--- -0
- - - -
- - - - - - - - -
- - - - - - - - -
- - - - - - - - -
- - - - - - - -
- - - - - -
- - - - - - - - -
11 - - - -
- - - -
- - - -
- - - -
- - - - -
- - - - - -
- - - -
168,520
0 0
6,685
11,287
-
0 186,492
SAMANDA KLIEM
DIRECTOR OF SALES
(I)
133,921
_ _ _ _
_ _ _ _ _
0 0
_________
- - --
0 0
_________
- - --
0 6,046
_________
-___
0 14,202
________
_____
0 154,1 -
_____
______
-
0 0
_________
- - --
0 Schedule J (Form 990) 2022
Schedule I (Form 990) 2022 Page 3
Part III Supplemental Information
Provide the information explanation, or descriptions required for Part I lines la lb 3 4a 4b 4c 5a 5b 6a 6b 7 and 8 and for Part II. Also complete this part for any additional information.
Return Reference Explanation
PART I, LINE 3 ITHE BOARD CHAIRPERSON APPROVES ALL CEO MONTHLY EXPENSES AND COMPENSATION IS APPROVED BY THE COMPENSATION COMMITTEE.
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Schedule I (Form 990) 2022
rReturn to Form
efile Public Visual Render I Ob'ectId: 202303189349310275 - Submission: 2023-11-14 1 TIN: 51-0225353 OMB No. 1545-0047
SCHEDULE O Supplemental Information to Form 990 or 990-EZ 2021 (Form 990) Complete to provide information for responses to specific questions on Form 990 or 990-EZ or to provide any additional information.
Department of the Treasury 11- Attach to Form 990 or 990-EZ.
Internal Revenue Service � Go to www.irs.gov/Form990 for the latest information.
Name of the organization
VISIT NEWPORT BEACH INC
Employer identification number
51-0225353
FORM 9907B,
A COPY OF THE 990 IS PROVIDED TO THE VP OF FINANCE FOR REVIEW AND IT IS SUBSEQUENTLY APPROVED ATA
PART VI,BOARD
MEETING BEFORE IT IS FILED.
SECTION
LINE 11B
FORM 990,
"AS AN EMPLOYEE OF VISIT NEWPORT BEACH, INC., YOU ARE EXPECTED TO USE GOOD JUDGMENT TO AVOID ANY
PART VI,
ACTIVITY, INVESTMENT, OR INTEREST THAT ACTUALLY OR POTENTIALLY CREATES A CONFLICT BETWEEN YOUR
SECTION B,
PERSONAL INTERESTS AND THE INTEREST OF VISIT NEWPORT BEACH, INC. OR ITS PARTNERS, INCLUDING ANY LINE 12C
BEHAVIOR WHICH GIVES THE APPEARANCE OF TAKING MONEY, MERCHANDISE, OR SERVICES FROM A CUSTOMER OR VENDOR FOR PERSONAL GAIN. IF YOU ARE UNCERTAIN AS TO WHETHER A CERTAIN TRANSACTION, ACTIVITY OR RELATIONSHIP CONSTITUTES A CONFLICT OF INTEREST, YOU SHOULD DISCUSS THE MATTER WITH MANAGEMENT. IF
YOU OR SOMEONE WITH WHOM YOU HAVE A CLOSE RELATIONSHIP (SUCH AS A FAMILY MEMBER OR CLOSE
COMPANION) ENGAGES IN ANY ACTIVITY OR TRANSACTION WHICH MIGHT CAUSE A CONFLICT BETWEEN YOUR PERSONAL INTEREST AND VISIT NEWPORT BEACH INC'S INTEREST. INFORMATION ABOUT THAT POTENTIAL CONFLICT
MUST BE DISCLOSED IN ADVANCE TO MANAGEMENT, AND ANY EXCEPTION TO THIS GUIDELINE MUST BE APPROVED BY THE PRESIDENT/CEO OF VISIT NEWPORT BEACH, INC. IN ADVANCE IN WRITING. FAILURE TO ADHERE TO THIS
GUIDELINE, INCLUDING FAILURE TO DISCLOSE ANY CONFLICTS OR TO SEEK AN EXCEPTION, MAY RESULT IN DISCIPLINE, UP TO AND INCLUDING TERMINATION OF EMPLOYMENT." AS PART OF THIS POLICY, EACH YEAR TWO DISCLOSURES ARE PROVIDED TO THE BOARD OF DIRECTORS AND THE EXECUTIVE TEAM OF THE ORGANIZATION.
THE ANNUAL DISCLOSURE REQUESTS INFORMATION REGARDING ANY FAMILY OR BUSINESS RELATIONSHIPS AND ANY POSSIBLE COMPENSATION RECEIVED. THE OTHER DISCLOSURE CONFIRMS THE UNDERSTANDING OF THE CONFLICT OF INTEREST POLICY AND PROVIDES SPACE FOR AN EXPLANATION.
FORM 990,
A COMPENSATION COMMITTEE WAS FORMED BY 3 MEMBERS OF THE BOARD. MEMBERS OF THE COMPENSATION
PART VI,
COMMITTEE CONTACTED OTHER BUREAUS, SIMILAR TO VISIT NEWPORT BEACH, INC., FOR CEO COMPENSATION
SECTION B,
INFORMATION. THE BUREAUS CONTACTED INCLUDED SANTA BARBARA, SAN DIEGO, AND PALM SPRINGS. THE LINE 15A
PROPOSED COMPENSATION WAS THEN DETERMINED AND AGREED UPON BY THE COMPENSATION COMMITTEE AND PRESENTED TO THE EXECUTIVE COMMITTEE FOR FINAL APPROVAL.
FORM 990,
THE FOLLOWING DOCUMENTS ARE AVAILABLE FOR REVIEW UPON REQUEST: FORM 990, FORM 1024, ARTICLES OF
PART VI,
INCORPORATION, BY LAWS, AND DETERMINATION LETTER.
SECTION C,
LINE 19
FORM 990
THE ORGANIZATION HAS A COMMITTEE THAT ASSUMES RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT OF ITS LINE2C
FINANCIAL STATEMENTS AND SELECTION OF AN INDEPENDENT ACCOUNTANT.
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ. Cat. No. 51056K Additional Data
Software ID:
Software Version:
Schedule 0 (Form 990)2021
Return to Form
SCHEDULER OMB No. 1545-0047
Related Organizations and Unrelated Partnerships (Form 990) ► Complete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37. 2022 F Attach to Form 990.
Department of the Treasury ► Go to www.irs.gov/Form990 for instructions and the latest information. Open to Public Internal Revenue Service Inspection
VISIT NEWPORT BEACH INC
51-0225353
Part I Identification of Disregarded Entities. Complete if the organization answered "Yes" on Form 990, Part IV, line 33. (a)
Name, address, and EIN (if applicable) of disregarded entity (b)
Primary activity
(c)
Legal domicile (state
or foreign country)
(d)
Total income
(e)
End -of -year assets
(f)
Direct controlling
entity
Part 11 iaentitication oT Relatea Tax -Exempt organizations. complete IT the organization answered "Yes" on Form yyu, Part IV, line 34 Decause it naa one or more A ... I— Fhe Fes....
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Name, address, and EIN of related organization
Primary activity
Legal domicile (state
Exempt Code section
Public charity status
Direct controlling
Section 512(b)
or foreign country)
(if section 501(c)(3))
entity
(13) controlled
entity?
Yes
No
(1)NEWPORT BEACH & COMPANY
MARKET BUSINESSES, SERVE
CA
501(C)(6)
No
1600 NEWPORT CENTER DRIVE SUITE 120
AS AN ASSOCIATION,
IMPROVE THE BUSINESS
N/A
NEWPORT BEACH, CA 92660
ENVIRONMENT
46-1758405
(2)NEWPORT BEACH FOUNDATION
TO PROVIDE SCHOLARSHIPS,
CA
501(C)(3)
LINE 7
No
1600 NEWPORT CENTER DRIVE SUITE 120
SUPPORT FOR CHARITY
EVENTS, PROMOTE SOCIAL
NEWPORT BEACH, CA 92660
WELFARE.
46-2413837
For Paperwork Reduction Act Notice, see the Instructions for Form 990.
cat. No. 50135Y
Schedule R (Form 990) 2021
Schedule R (Form 990) 2021 Page 2
Part III Identification of Related Organizations Taxable as a Partnership. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, because it had one or more related organizations treated as a partnership during the tax year. (a)
Name, address, and EIN of
related organization
(b)
Primary
activity
(c)
Legal
domicile
(state or
foreign
country)
(d)
Direct
controlling
entity
(e)
Predominant
income(related,
unrelated,
excluded from tax
under sections
512-514)
(f)
Share of
total
income
(g)
Share of
end -of-
year
assets
(h)
Disproprtionate
allocations?
(I)
Code V-UBI
amount in
box 20 of
Schedule K-1
(Form 1065)
T
General or
managing
partner?
(k)
Percentage
ownership
Yes
No
Yes
No
Part IV Identification of Related Organizations Taxable as a Corporation or Trust. Complete if the organization answered "Yes" on Form 990, Part IV, line 34 because it had one or more related organizations treated as a corporation or trust during the tax year. (a) (b) (c) (d) (e) (f) M (h) 0)
Name, address, and EIN of Primary activity Legal Direct controlling Type of entity Share of total Share of end- Percentage Section 512(b)(13) related organization domicile entity (C corp, S income of -year ownership controlled entity? (state or foreign corp, assets
Schedule R (Form 990) 2021
Schedule R (Form 990) 2021 Page 3
Pat Transactions With Related Organizations. Complete if the organization answered "Yes" on Form 990, Part IV, line 34, 35b, or 36.
Note. Complete line 1 if any entity is listed in Parts II, III, or IV of this schedule. Yes No 1 During the tax year, did the orgranization engage in any of the following transactions with one or more related organizations listed in Parts II -IV? a Receipt of (i) interest, (ii)annuities, (iii) royalties, or (iv) rent from a controlled entity . la No b Gift, grant, or capital contribution to related organization(s) . 1b No c Gift, grant, or capital contribution from related organization(s) . . . . . . . . . . . . . . . . . Sc No d Loans or loan guarantees to or for related organization(s) 1d No e Loans or loan guarantees by related organization(s) . . . . . . . . . . . . . . . . . . . le No f Dividends from related organization(s) . 1f No
g Sale of assets to related organization(s) . SgT
h Purchase of assets from related organization(s) . lh1 Exchange of assets with related organization(s) . . . . . . . . . . . . . . . . . 1ij Lease of facilities, equipment, or other assets to related organization(s) . 1j k Lease of facilities, equipment, or other assets from related organization(s) . KkN1 Performance of services or membership or fundraising solicitations for related organization(s) . . . . . . . . m Performance of services or membership or fundraising solicitations by related organization(s) . n Sharing of facilities, equipment, mailing lists, or other assets with related organization(s) . . . . . . . . . o Sharing of paid employees with related organization(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . p Reimbursement paid to related organization(s) for expenses . . . . . . . . . . . . q Reimbursement paid by related organization(s) for expenses . . . . . . . . . . . . r Other transfer of cash or property to related organization(s) . . . . . . . . . . . . . . . . . lr No s Other transfer of cash or property from related organization(s) . . . . . . . . . . . . . . . . . is No 2 If the answer to any of the above is "Yes," see the instructions for information on who must complete this line, including covered relationships and transaction thresholds. (a)
Name of related organization
(b)
Transaction
type (a-s)
(c)
Amount involved
(d)
Method of determining amount involved
(1)NEWPORT BEACH & COMPANY
M
2,422,073
EXPENSES INCURRED
Schedule R (Form 99D) 2021
Schedule R (Form 990) 2021 Page 4
Part VI Unrelated Organizations Taxable as a Partnership. Complete if the organization answered "Yes" on Form 990, Part IV, line 37.
Provide the following information for each entity taxed as a partnership through which the organization conducted more than five percent of its activities (measured by total assets or gross revenue) that was not a related organization. See instructions regarding exclusion for certain investment partnerships. (a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
0)
(I)
(k)
Name, address, and EIN of entity
Primary
Legal
Predominant
Are all partners
Share of
Share of
Disproprtionate
Code V-UBI
General or
Percentage
activity
domicile
income
section
total
end -of -year
allocations?
amount in
managing
ownership
(state or
(related,
501(c)(3)
income
assets
box 20
partner?
foreign
unrelated,
organizations?
of Schedule
country)
excluded from
K-1
tax under
(Form 1065)
sections 512-
514)
Yes
No
Yes
No
Ye.7
No
Schedule R (Form 990) 2021
Schedule R (Form 990) 2021 Page 5
Part VII Supplemental Information
Provide additional information for responses to questions on Schedule R. See instructions.
Return Reference Explanatio
Schedule R (Form 990) 2021
Additional Data
Software ID:
Software Version:
Return to Form
efile Public Visual Render 11 ObjectId: 202343189349309624 - Submission: 2023-11-14 1 TIN: 46-1758405
Return of Organization Exempt From Income Tax
OMB No. 1545-0047
Form990
Under section 501(c), 527, or 4947(a)(1) of the Internal Revenue Code (except private foundations) 2022
111, Do not enter social security numbers on this form as it may be made public.
Opea, to Public
Department of the Treasury
110- Go to wwwdrs.gov/form990 for instructions and the latest information.
Inspection
Internal Revenue Service
A For the 2022 calendar year, or tax year t
C Name of organization
B Check if applicable:
NEWPORT BEACH &COMPANY
O Address change
O Name change
O Initial return
Doing business as
O Final return/terminated
inning 07-01-2022 , and ending 06-30-2023
O Amended return Number and street (or P.O. box if mail is not delivered to street address) Room/sui O Application pending 1600 NEWPORT CENTER DRIVE 120
City or town, state or province, country, and ZIP or foreign postal code NEWPORT BEACH, CA 92660
F Name and address of principal officer:
LILY PEARSON
1600 NEWPORT CENTER DR SUITE 120
NEWPORT BEACH CA 92660
I Tax-exempt status: 0 501(c)(3) 0 501(c) ( 6 ) -4 (insert no.) 0 4947(a)(1) or 527 3 Website:l► WWW.NEWPORTBEACHANDCO.COM
D Employer identification number
46-1758405
E Telephone number
(949) 719-6100
G Gross receipts $ 2,313,980
H(a) Is this a group return for
subordinates? OYes ONo
H(b) Are all subordinates
included? 0 Yes ONo
If "No," attach a list. See instructions.
H(c) Group exemption number PP,
K Form of organization: 0 Corporation 0 Trust 0 Association 0 Others I L Year of formation: 2012 I M State of legal domicile: CA Part I Summary
1 Briefly describe the organization's mission or most significant activities:
THE CORPORATION'S ACTIVITIES ARE TO PROMOTE AND MARKET THE COMMON BUSINESS INTERESTS OF BUSINESS ENTITIES IN THE CITY OF NEWPORT BEACH; TO SERVE AS AN ASSOCIATION FOR NEWPORT BEACH BUSINESS ENTITIES; AND TO IMPROVE BUSINESS
CONDITIONS THROUGH ENHANCING THE ECONOMIC FABRIC OF THE CITY OF NEWPORT BEACH AND PROMOTING ECONOMIC DEVELOPMENT WITH THE CITY OF NEWPORT BEACH RELATED ENTITIES WITHIN ORANGE COUNTY.
M
E
4 'd
2 Check this box F 0
3 Number of voting members of the governing body (Part VI, line la) . 4 Number of independent voting members of the governing body (Part VI, line lb) . 5 Total number of individuals employed in calendar year 2021 (Part V, line 2a) . 3 23
4 23
5 18
6 0
6 Total number of volunteers (estimate if necessary) .
7a Total unrelated business revenue from Part VIII, column (C), line 12 . 7a
0 b Net unrelated business taxable income from Form 990-T, Part I, line 11 . 7b
0 Prior Year
Current Year
Q
8 Contributions and grants (Part VIII, line 1h) .
109,450
0 1,960,508
2,313,980
F_
9 Program service revenue (Part VIII, line 2g) .
30 Investment income (Part VIII, column (A), lines 3, 4, and 7d) 0 0
0 0
11 Other revenue (Part VIII, column (A), lines 5, 6d, 8c, 9c, 10c, and Ile) 12 Total revenue —add lines 8 through 11 (must equal Part VIII, column (A), line 12) 2,069,958
2,313,980
13 Grants and similar amounts paid (Part IX, column (A), lines 1-3 ) . 0 0
14 Benefits paid to or for members (Part IX, column (A), line 4) . 0 0
r
15 Salaries, other compensation, employee benefits (Part IX, column (A), lines 5-10) 1,061,457
1,585,763
0 0
16a Professional fundraising fees (Part IX, column (A), line Ile) . ill
6 b Total fundraising expenses (Part IX, column (D), line 25) I►0 17 Other expenses (Part IX, column (A), lines lla-lld, llf-24e) . . . . 946,938
693,540
18 Total expenses. Add lines 13-17 (must equal Part IX, column (A), line 25) 2,008,395
2,279,303
19 Revenue less expenses. Subtract line 18 from line 12 . 61,563
34,677
i
Beginning of Current Year
End of Year
351,289
2,894,926
.
u
�LL
20 Total assets (PartX, line 16) .
21 Total liabilities (PartX, line 26) .
22 Net assets or fund balances. Subtract line 21 from line 20 . 310,145
2,819,105
41,144
75,821
Part 11 Signature Block
Under penalties of perjury, 1 declare that 1 have examines this return, including accompanying Schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than officer) is based on all information of which preparer has Sign
Here
LILY PEARSON VP OF FINANCE
Type or print name and title
May the IRS discuss this return with the preparer shown above? (see instructions) . 0 Yes 0 No For Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 11282Y Form 990 (2021)
Form 990(2021) Page 2
Part III Statement of Program Service Accomplishments
Check if Schedule 0 contains a response or note to any line in this Part III 1 Briefly describe the organization's mission:
NEWPORT BEACH & COMPANY IS A CREATIVE AND FOCUSED COMMUNITY -MARKETING AGENCY THAT IS SINGULARLY COMMITTED TO TELLING THE INTEGRATED NEWPORT BEACH BRAND STORY. BY EMBRACING A VARIETY OF NEIGHBORHOODS, BUSINESSES AND INDIVIDUAL UNIQUE VOICES
INTO A COMPLEMENTARY STORY, NEWPORT BEACH & COMPANY STRENGTHENS ALL OF ITS PARTNERS, DRIVES NEW REVENUE TO THE CITY AND ENHANCES ITS OVERALL VIBRANCY.
2 Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990-EZ? . Yes 0 No
If "Yes," describe these new services on Schedule 0.
3 Did the organization cease conducting, or make significant changes in how it conducts, any program services? . 0 Yes 0 No
If "Yes," describe these changes on Schedule 0.
4 Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses.
Section 501(c)(3) and 501(c)(4) organizations are required to report the amount of grants and allocations to others, the total expenses, and revenue, if any, for each program service reported. 4a (Code: ) (Expenses $ 2,279,303 including grants of $ ) (Revenue $ 2,313,980 )
THE ORGANIZATION SPECIALIZES IN MARKETING AND PROMOTION SERVICESRELATED TO ENHANCING THE ECONOMIC DEVELOPMENT FOR THE CITY OF NEWPORTBEACH (THE CITY). THE ORGANIZATION PROVIDES SUCH SERVICES TO VISITNEWPORT BEACH AND ALSO HAS AGREEMENTS WITH THE CITY TO MANAGE
ITSPUBLIC ACCESS TELEVISION CHANNEL AND TO PROVIDE SERVICES TO THE NEWPORTBEACH RESTAURANT ASSOCIATION BUSINESS IMPROVEMENT DISTRICT AND THEBALBOA VILLAGE MERCHANTS ASSOCIATION. BY EMBRACING A VARIETY OFNEIGHBORHOODS, BUSINESSES AND INDIVIDUAL UNIQUE VOICES INTO
ACOMPLEMENTARY STORY, THE ORGANIZATION SEEKS TO STRENGTHEN ALL OF ITSPARTNERS, DRIVE NEW REVENUE TO THE CITY AND ENHANCE THE CITY-S OVERALLECONOMIC VIBRANCY.
4b (Code: ) (Expenses $ including grants of $ ) (Revenue $ ) 4C (Code: ) (Expenses $ including grants of $ ) (Revenue $ )
4d Other program services (Describe in Schedule O.)
(Expenses $ including grants of $ ) (Revenue $ )
4e Total program service expenses 2,279,303
Form 990 (2021)
Form 990(2021) Page 3
Part IV Checklist of Required Schedules
Yes
No
1 Is the organization described in section 501(c)(3) or 4947(a)(1) (other than a private foundation)? If "Yes," complete No
Schedule A .
1 2 Is the organization required to complete Schedule 8, Schedule of Contributors? See instructions. 2 No
3 Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office? If "Yes," complete Schedule C, Part I . 3 No
4 Section 501(c)(3) organizations. Did the organization engage in lobbying activities, or have a section 501(h) election in effect during the tax year? If "Yes," complete Schedule C, Part/1 . 4 5 Is the organization a section 501(c)(4), 501(c)(5), or 501(c)(6) organization that receives membership dues, assessments, or similar amounts as defined in Rev. Proc. 98-19? If "Yes," complete Schedule C, Part 111 . . 5 No
6 Did the organization maintain any donor advised funds or any similar funds or accounts for which donors have the right to provide advice on the distribution or investment of amounts in such funds or accounts? If "Yes," complete Schedule D,Part I W .
6 No
7 No
7 Did the organization receive or hold a conservation easement, including easements to preserve open space, the environment, historic land areas, or historic structures? If "Yes, " complete Schedule D, Partll W . 8 No
8 Did the organization maintain collections of works of art, historical treasures, or other similar assets? If "Yes," complete Schedule D, Part III W . .
9 Did the organization report an amount in Part X, line 21 for escrow or custodial account liability; serve as a custodian for amounts not listed in Part X; or provide credit counseling, debt management, credit repair, or debt negotiation services? If "Yes," complete Schedule D, Part IV W .
9 No
10 No
10 Did the organization, directly or through a related organization, hold assets in temporarily restricted endowments, permanent endowments, or quasi endowments? If "Yes," complete Schedule D, Part V . . 11 If the organization's answer to any of the following questions is "Yes," then complete Schedule D, Parts VI, VII, VIII, IX, or X, as applicable.
a Did the organization re ort an amount for land, buildings, and equipment in Part X, line 10? If "Yes," complete Schedule D, Part VI. . I la Yes
b Did the organization report an amount for investments —other securities in Part X, line 12 that is 5% or more of its total assets reported in Part X. line 16? If "Yes," complete Schedule D, Part V11 V . llb No c Did the organization report an amount for investments —program related in Part X line 13 that is 5% or more of its total assets reported in Part X. line 16? If "Yes," complete Schedule D, Part Vlll �b . ilc No d Did the organization report an amount for other assets in Part X, line 15 that is 5% or more of its total assets reported in Part X, line 16? If "Yes," complete Schedule D, Part IX . 1ld NO e Did the organization report an amount for other liabilities in Part X, line 25? If "Yes," complete Schedule D, PartX Ile Yes f Did the organization's separate or consolidated financial statements for the tax year include a footnote that addresses the organization's liability for uncertain tax positions under FIN 48 (ASC 740)? If "Yes, " complete Schedule D, PartX t1l Yes 12a Did the organization obtain se arate, independent audited financial statements for the tax year? If "Yes,"complete Schedule D, PartsXI and XII . Yes
b Was the organization included in consolidated, independent audited financial statements for the tax year? If "Yes,"and if the organization answered "No" to line 12a, then completing Schedule D, Parts XI and XII is optional I -I 12b No 13 Is the organization a school described in section 170(b)(1)(A)(ii)? If "Yes," complete Schedule E 13 No
14a Did the organization maintain an office, employees, or agents outside of the United States? . 14a No b Did the organization have aggregate revenues or expenses of more than $10,000 from grantmaking, fundraising, business, investment, and program service activities outside the United States, or aggregate foreign investments valued at $100,000 or more? If "Yes," complete Schedule F, Parts I and IV . 14b No 15 Did the organization report on Part IX, column (A), line 3, more than $5,000 of grants or other assistance to or for any foreign organization? If "Yes,' complete Schedule F, Parts II and IV . 15 No 16 Did the organization report on Part IX, column (A), line 3, more than $5,000 of aggregate grants or other assistance to or for foreign individuals? If "Yes, " complete Schedule F, Parts III and IV . 16 No 17 Did the organization report a total of more than $15,000 of expenses for professional fundraising services on Part IX, 17 No column (A), lines 6 and 11e? If "Yes," complete Schedule G, Part I. See instructions. . 18 Did the organization report more than $15,000 total of fundraising event gross income and contributions on Part VIII,
III ICD IL. al IU Oa! U ICJ, LUMPIMC _ (LJICUUIC U, ran II . . . . . . . . . . . . 15 1 IVO
19 Did the organization report more than $15,000 of gross income from gaming activities on Part Vill, line 9a? If "Yes," complete Schedule G, Part /II . .
19 No
20a
No
20a Did the organization operate one or more hospital facilities? If "Yes," complete Schedule H . b If "Yes" to line 20a, did the organization attach a copy of its audited financial statements to this return? 20b
21 No
21 Did the organization report more than $5,000 of grants or other assistance to any domestic organization or domestic government on Part IX, column (A), line 1? If "Yes,"complete Schedule I, Parts I and II . .
Form 990 (2021)
Form 990(2021) Page 4
Part IV Checklist of Required Schedules (continued)
Yes
No
22 Did the organization report more than $5,000 of grants or other assistance to or for domestic individuals on Part IX, column (A), line 2? If "Yes," complete Schedule I, Parts I and III . 22 No
23 Yes
23 Did the organization answer "Yes" to Part VII, Section A, line 3, 4, or 5, about compensation of the organization's current and former officers, directors, trustees, key employees, and highest compensated employees? If "Yes," complete Schedule I . W
24a Did the organization have a tax-exempt bond issue with an outstanding principal amount of more than $100,000 as of the last day of the year, that was issued after December 31, 2002? If "Yes,"answer lines 24b through 24d and complete Schedule K. If "No,"go to line 25a .
24a
No
24b
b Did the organization invest any proceeds of tax-exempt bonds beyond a temporary period exception? . c Did the organization maintain an escrow account other than a refunding escrow at any time during the year to defease any tax-exempt bonds? .
24c
d Did the organization act as an "on behalf of issuer for bonds outstanding at any time during the year? . 24d
25a Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations. Did the organization engage in an excess benefit transaction with a disqualified person during the year? If "Yes," complete Schedule L, Part I . 25a
b Is the organization aware that it engaged in an excess benefit transaction with a disqualified person in a prior year, and that the transaction has not been reported on any of the organization's prior Forms 990 or 990-EZ? If "Yes," complete 25b
Schedule L, Part I . .
26 Did the organization report any amount on Part X, line 5 or 22 for receivables from or payables to any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or 35% controlled entity or family member of any of these persons? If "Yes," complete Schedule L, Part 11 . . 26 No
27 Did the organization provide a grant or other assistance to any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or employee thereof, a grant selection committee member, or to a 35% controlled entity (including an employee thereof) or family member of any of these persons? If "Yes," complete 27 No
Schedule L,Part III . .
28 Was the organization a party to a business transaction with one of the following parties (see the Schedule L, Part IV instructions for applicable filing thresholds, conditions, and exceptions):
a A current or former officer, director, trustee, key employee, creator or founder, or substantial contributor? If "Yes," complete Schedule L, Part IV . .
28a
No
b A family member of any individual described in line 28a? If "Yes," complete Schedule L, Part IV . . 28b
No
c A 35% controlled entity of one or more individuals and/or organizations described in line 28a or 28b? If "Yes," complete Schedule L, Part IV .
28c
No
29 Did the organization receive more than $25,000 in non -cash contributions? If "Yes," complete Schedule M 29 No
30 Did the organization receive contributions of art, historical treasures, or other similar assets, or qualified conservation contributions? If "Yes," complete Schedule M .
30 No
31 Did the organization liquidate, terminate, or dissolve and cease operations? If "Yes, " complete Schedule N, Part 31 No
32 Did the organization sell, exchange, dispose of, or transfer more than 25% of its net assets? If "Yes," complete Schedule N, Part II .
32 No
33 Did the organization own 100% of an entity disregarded as separate from the organization under Regulations sections 301.7701-2 and 301.7701-3? If "Yes," complete Schedule R, Part I . V 33 No
34 Yes
34 Was the organization related to any tax-exempt or taxable entity? If "Yes," complete Schedule R, Part Il, III, or IV, and Part V, line 1 . c�
35a
No
35a Did the organization have a controlled entity within the meaning of section 512(b)(13)? b If `Yes' to line 35a, did the organization receive any payment from or engage in any transaction with a controlled entity within the meaning of section 512(b)(13)? If "Yes," complete Schedule R, Part V, line 2 . . 35b
36 Section 501(c)(3) organizations. Did the organization make any transfers to an exempt non -charitable related organization? If "Yes," complete Schedule R, Part V, line 2 . 36 37 Did the organization conduct more than 5% of its activities through an entity that is not a related organization and that is treated as a partnership for federal income tax purposes? If "Yes," complete Schedule R, Part VI 37 No
3U Dia the Organization Complete bcneaUle U ana prOVlae explanations on ScneaUle U for Hart vi, lines 111) ana 19? Note.
All Form 990 filers are required to complete Schedule O. . 38 Yes Part V Statements Regarding Other IRS Filings and Tax Compliance Check if Schedule O contains a response or note to any line in this Part V E) Yes No
la Enter the number reported in box 3 of Form 1096. Enter -0- if not applicable . la 13 b Enter the number of Forms W-2G included on line la. Enter -0- if not applicable lb 0 c Did the organization comply with backup withholding rules for reportable payments to vendors and reportable gaming (gambling) winnings to prize winners? . .
Form 990 (2021)
Statements Regarding Other IRS Filings and Tax Compliance (continued) 2a Enter the number of employees reported on Form W-3, Transmittal of Wage and Tax Statements, filed for the calendar year ending with or within the year covered by this return . 2a
b If at least one is reported on line 2a, did the organization file all required federal employment tax returns? Note. If the sum of lines la and 2a is greater than 250, you may be required to e-file. See instructions. 3a Did the organization have unrelated business gross income of $1,000 or more during the year? . . b If "Yes," has it filed a Form 990-T for this year?If "No" to line 3b, provide an explanation in Schedule O . . 4a At any time during the calendar year, did the organization have an interest in, or a signature or other authority over, a financial account in a foreign country (such as a bank account, securities account, or other financial account)? b If "Yes," enter the name of the foreign country: 0,
See instructions for filing requirements for FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR).
Sa Was the organization a party to a prohibited tax shelter transaction at any time during the tax year? . . b Did any taxable party notify the organization that it was or is a party to a prohibited tax shelter transaction? c If "Yes," to line 5a or 5b, did the organization file Form 8886-T? 6a Does the organization have annual gross receipts that are normally greater than $100,000, and did the organization solicit any contributions that were not tax deductible as charitable contributions? . . b If "Yes," did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? . .
7 Organizations that may receive deductible contributions under section 170(c). a Did the organization receive a payment in excess of $75 made partly as a contribution and partly for goods and servic, provided to the payor? . .
b If "Yes," did the organization notify the donor of the value of the goods or services provided? c Did the organization sell, exchange, or otherwise dispose of tangible personal property for which it was required to file Form 8282? . .
Form 990 (2021)
2b Yes
3a No
3b
4a No
Sa
No
Sb
No
Sc
6a
No
6b
7a
7b
7c
d If "Yes," indicate the number of Forms 8282 filed during the year . 7d e Did the organization receive any funds, directly or indirectly, to pay premiums on a personal benefit contract? 7e
f Did the organization, during the year, pay premiums, directly or indirectly, on a personal benefit contract? 7f g If the organization received a contribution of qualified intellectual property, did the organization file Form 8899 as required? . 7g
h If the organization received a contribution of cars, boats, airplanes, or other vehicles, did the organization file a Form 1098-C? . 7h
8 Sponsoring organizations maintaining donor advised funds. Did a donor advised fund maintained by the sponsoring organization have excess business holdings at any time during the year? 8 9 Sponsoring organizations maintaining donor advised funds. a Did the sponsoring organization make any taxable distributions under section 4966? 9a b Did the sponsoring organization make a distribution to a donor, donor advisor, or related person? 9b 10 Section 501(c)(7) organizations. Enter:
a Initiation fees and capital contributions included on Part Vill, line 12 10a b Gross receipts, included on Form 990, Part VIII, line 12, for public use of club facilities lob 11 Section 501(c)(12) organizations. Enter:
a Gross income from members or shareholders . lla
b Gross income from other sources. (Do not net amounts due or paid to other sources against amounts due or received from them.) . lib
12a Section 4947(a)(1) non-exempt charitable trusts. Is the organization filing Form 990 in lieu of Form 1041? 12a b If "Yes," enter the amount of tax-exempt interest received or accrued during the year. I _ _.
llb
13 Section 501(c)(29) qualified nonprofit health insurance issuers. a Is the organization licensed to issue qualified health plans in more than one state? .
Note. See the instructions for additional information the organization must report on Schedule O. 13a
b Enter the amount of reserves the organization is required to maintain by the states in which the organization is licensed to issue qualified health plans . 13b c Enter the amount of reserves on hand . 13c
14a Did the organization receive any payments for indoor tanning services during the tax year? . 14a
No
b If "Yes," has it filed a Form 720 to report these payments?If "No," provide an explanation in Schedule O 14b
15 Is the organization subject to the section 4960 tax on payment(s) of more than $1,000,000 in remuneration or excess parachute payment(s) during the year? .
15 No
If "Yes," see the instructions and file Form 4720, Schedule N. 16 No
16 Is the organization an educational institution subject to the section 4968 excise tax on net investment income? .
If "Yes," complete Form 4720, Schedule O.
17 Section 501(c)(21) organizations. Did the trust, any disqualified person, or mine operator engage in any activities 17 that would result in the imposition of an excise tax under section 4951, 4952, or 4953? .
If "Yes," complete Form 6069.
Form 990 (2021)
Form 990(2021)
Part VI Governance, Management, and Disclosure. For each "Yes" response to lines 2 through 7b below, and for a "No" response to lines 8a, 8b, or 10b below, describe the circumstances, processes, or changes in Schedule O. See instructions.
Check if Schedule O contains a response or note to any line in this Part VI . .
Section A. Governing Body and Management
Yes I No
is Enter the number of voting members of the governing body at the end of the tax year la 231 If there are material differences in voting rights among members of the governing body, or if the governing body delegated broad authority to an executive committee or similar committee, explain in Schedule O.
b Enter the number of voting members included in line la, above, who are independent ib I 23
2 Did any officer, director, trustee, or key employee have a family relationship or a business relationship with any other officer, director, trustee, or key employee? . .
3 Did the organization delegate control over management duties customarily performed by or under the direct supervisior of officers, directors or trustees, or key employees to a management company or other person? . 4 Did the organization make any significant changes to its governing documents since the prior Form 990 was filed? 5 Did the organization become aware during the year of a significant diversion of the organization's assets? . 6 Did the organization have members or stockholders? . . 7a Did the organization have members, stockholders, or other persons who had the power to elect or appoint one or more members of the governing body? . .
b Are any governance decisions of the organization reserved to (or subject to approval by) members, stockholders, or persons other than the governing body? . .
8 Did the organization contemporaneously document the meetings held or written actions undertaken during the year by the following:
a The governing body? . .
b Each committee with authority to act on behalf of the governing body? . . 9 Is there any officer, director, trustee, or key employee listed in Part VII, Section A, who cannot be reached at the 2 No
3 No
4 No
5 No
6 No
7a
7b
8a Yes
8b Yes
No
No
organization's mailing address? If "Yes," provide the names and addresses in Schedule O . I 9 I 1 Section B. Policies This Section a requests information about policies not required by the Internal Revenue Code. 10a Did the organization have local chapters, branches, or affiliates? . b If "Yes," did the organization have written policies and procedures governing the activities of such chapters, affiliates, and branches to ensure their operations are consistent with the organization's exempt purposes? Ila Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form? .
b Describe on Schedule O the process, if any, used by the organization to review this Form 990. . . 12a Did the organization have a written conflict of interest policy? If "No," go to line 13 . b Were officers, directors, or trustees, and key employees required to disclose annually interests that could give rise to conflicts? .
c Did the organization regularly and consistently monitor and enforce compliance with the policy? If "Yes," describe on Schedule O how this was done .
13 Did the organization have a written whistleblower policy? . 14 Did the organization have a written document retention and destruction policy? . 15 Did the Drocess for determining compensation of the followina Dersons include a review and aDDroval by indeoendent Yes
No
10a
No
10b
Ila
Yes
12a
Yes
12b
Yes
12c
Yes
13 Yes
14 Yes
persons, comparability data, and contemporaneous substantiation of the deliberation and decision? a The organization's CEO, Executive Director, or top management official . 15a
Yes
b Other officers or key employees of the organization . 15b
No
If "Yes" to line 15a or 15b, describe the process on Schedule 0. See instructions. 16a Did the organization invest in, contribute assets to, or participate in a joint venture or similar arrangement with a taxable entity during the year? .
16a
No
b If "Yes," did the organization follow a written policy or procedure requiring the organization to evaluate its participation in joint venture arrangements under applicable federal tax law, and take steps to safeguard the organization's exempt status with respect to such arrangements? .
16b
Section C. Disclosure
17 List the states with which a copy of this Form 990 is required to be filedF CA
18 Section 6104 requires an organization to make its Form 1023 (1024 or 1024-A, if applicable), 990, and 990-T (section 501(c)(3)s only) available for public inspection. Indicate how you made these available. Check all that apply. 0 Own website 0 Another's website 0 Upon request 0 Other (explain in Schedule O) 19 Describe in Schedule 0 whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. 20 State the name, address, and telephone number of the person who possesses the organization's books and records:
SLILY PEARSON 1600 NEWPORT CENTER DR SUITE 120 NEWPORT BEACH, CA 926600926 (949) 467-2746 Form 990 (2021)
Form 990(2021)
Part VII Compensation of Officers, Directors,Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
Check if Schedule 0 contains a response or note to any line in this Part VII 0 Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees la Complete this table for all persons required to be listed. Report compensation for the calendar year ending with or within the organization's tax year.
t List all of the organization's current officers, directors, trustees (whether individuals or organizations), regardless of amount of compensation. Enter -0- in columns (D), (E), and (F) if no compensation was paid. f List all of the organization's current key employees, if any. See the instructions for definition of "key employee." • List the organization's five current highest compensated employees (other than an officer, director, trustee or key employee) who received reportable compensation (box 5 of Form W-2, Form 1099-MISC, and/or box 1 of Form 1099-NEC) of more than $100,000 from the organization and any related organizations.
a List all of the organization's former officers, key employees, or highest compensated employees who received more than $100,000 of reportable compensation from the organization and any related organizations. a List all of the organization's former directors or trustees that received, in the capacity as a former director or trustee of the organization, more than $10,000 of reportable compensation from the organization and any related organizations.
See the instructions for the order in which to list the persons above. 0 Check this box if neither the organization nor any related organization compensated any current officer, director, or trustee. (A)
(B)
(C)
(D)
(E)
(F)
Name and title
Average
Position (do not check more
Reportable
Reportable
Estimated
hours per
than one box, unless
compensation
compensation
amount of other
week (list
person is both an officer
from the
from related
compensation
any hours
and a director/trustee)
organization (W-
organizations
from the
for related
2/1099-
(W-2/1099-
organization and
T
+a =
-n
organizations
_
m
? _.
MISC/1099-
MISC/1099-
related
below dotted.
_
NEC)
NEC)
organizations
line)`
_
—
_
=
T.
w
s
�
-
a
_
m
(1) AMY DEITT
1.00 ...................................................................... ................
x
0 0
0 DIRECTOR
(2) TONY PETROS
1.00 .............................................................. ..
................
X
0 0
0 DIRECTOR......
(3) TANYA THOMAS
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(4) STEVE ROSANSKY
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(5) SHARON WOOD
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(6) RUSH HILL
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(7) PHIL RAVENNA
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(8) ANTHONY HARTWELL
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(9) MARKUS KOHN
1.00 ..
.................
X
0 0
0 DIRECTOR
(10) MARIO MAROVIC
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(11) ANTONELLA CASTRO
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(12) LINDA M BEIMFOHR
1.00 ...................................................................... ................
X
X
0 0
0 SECRETARY
(13) JON LEWIS
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(14) ANNIE PAINTING
1.00 ...................................................................... .................
X
0 0
0 DIRECTOR
(15) HENRY PYLE
1.00 ...................................................................... ................
X
0 0
0 DIRECTOR
(16) GREGG SCHWENK
1.00 ...................................................................... .................
X
0 0
0 EX-OFFICIO MEMBER
(17) GERARD WIDDER
1.00 ...................................................................... ................
X
X
0 0
0 VICE CHAIRPERSON
Form 990(2021)
Form 990 (2021)
Part VI Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (continued)
(A)
(B)
(C)
(D)
(E)
(F)
Name and title
Average
Position (do not check more
Reportable
Reportable
Estimated
hours per
than one box, unless
compensation
compensation
amount of other
week (list
person is both an officer
from the
from related
compensation
any hours
and a director/trustee)
organization (W-
organizations
from the
for related
2/1099-
(W-2/1099-
organization and
O
A
e =
organizations
a
Z
0 MISC/1099
MISC/1099-
related
below dotted
_Ll� c
n
0 0
TL
ID
NEC)
NEC)
organizations
line)
-
�0
m
�
t
(D
m
(18) JASON AL-IMAN
1.00 ....................................................................... x
0 0
0 EX-OFFICIO MEMBER
.......................
(19) DEBBIE SNAVELY
1.00 .......................................................................
X
X
0 0
0 CHAIRPERSON
.......................
(20) DAVID BEEK
1.00 .......................................................................
X
0 0
0 DIRECTOR
......................
(21) DAVID HOFFMAN
1.00 .......................................................................
X
0 0
0 DIRECTOR
.......................
(22) CHARLENE REYNOLDS
1.00 .....................................................................
X
0 0
0 EX-OFFICIO MEMBER
"""""""""
""
(23) CAN DACE BISCONTE
1.00 .....................................................................
X
X
0 0
0 TREASURER
"""""""""
""
(24) ANDRE BROSE
1.00 .......................................................................
X
0 0
0 DIRECTOR
.......................
(25) WASIM KAZI
1.00 .......................................................................
X
0 0
0 DIRECTOR
.......................
(26) HOMER BLUDAU
1.00 .......................................................................
X
0 0
0 DIRECTOR
......................
(27) DOUG MCCLAIN
40.00 .....................................................................
X
168,520
0 17,972
CHIEF MARKETING OFFICER
.......................
(28) GARY SHERWIN
28.00 ......`I`DE....'*E'0.............................................................1' .'0'0
....
X
350,405
0 59,788
PRESIDENT/CEO
12.00 (29) LILY PEARSON
28.00 .................................................................1, ......F.F'I'
.........
X
174,690
0 27,375
A.N'C
VP OF FINANCE
12.00 (30) ASHLEY ]OHNSON
40.00 ..................................................................... ..
X
41,635
0 16,267
CHIEF MARKETING OFFICER
"""""""""
lb Sub -Total .
c Total from continuation sheets to Part VII, Section A . i► 735,250
0 121,402
d Total (add lines lb and 1c) . F
2 Total number of individuals (including but not limited to those listed above) who received more than $100,000 of reportable compensation from the organization PP, 3
Yes No
3 Did the organization list any former officer, director or trustee, key employee, or highest compensated employee on line la? If "Yes," complete Schedule I for such individual . 3 No 4 For any individual listed on line la, is the sum of reportable compensation and other compensation from the organization and related organizations greater than $150,000? If "Yes," complete Schedule I for such individual .
4 Yes
5 Did any person listed on line la receive or accrue compensation from any unrelated organization or individual for services rendered to the organization?If "Yes," complete Schedule J for such person . FS No Section B. Independent Contractors
1 Complete this table for your five highest compensated independent contractors that received more than $100,000 of compensation frnm the nraani7atinn. Rennrt rmmriensation fnr the ralendar vear ending with or within the nrnani7atinn's tax vear. (A)
Name and business address
(B)
Description of services
(c)
Compensation
2 Total number of independent contractors (including but not limited to those listed above) who received more than $100,000 of compensation from the organization P, 0
Form 990(2021)
Norm 990 (Lu11)
Part VIII Statement of Revenue
Check if Schedule O contains a response or note to any line in this Part VIII . ❑ (A)
(B)
(C)
(D)
Total revenue
Related or
Unrelated
Revenue
exempt
business
excluded from
function
revenue
tax under sections
revenue
512 - 514
0 derated campaigns
is
E!mbership dues
lb
ndraising events
lc
y lated organizations
id
C O
-2 vernment grants (contributions)
le
Vill
f All other contributions, gifts, grants,
I
and similar amounts not included
.
above l ar
g Noncash contributions included in
lines la - lf:$ 19
h Total. Add lines la -If . Ilb-
Business Code
2a MARKETING CONTRACTS
541800
G]
ti! =
i
E
f All other program service revenue.
9 Total. Add lines 2a-2f. . . . . PP- 2,313,980
3 Investment income (including dividends, interest, and other similar amounts) . I►
4 Income from investment of tax-exempt bond proceeds pp- 5 Royalties . I►
(i) Real I (ii) Personal
6a Gross rents 6a
b Less: rental
expenses 6b
c Rental income
or (loss) 6c
d Net rental income or (loss) . pp,
(i) Securities (ii) Other
7a Gross amount
from sales of 7a
assets other
than inventory
b Less: cost or 7b
other basis and
sales expenses
c Gain or (loss) 7c
d Net gain or (loss) .
Qa Gross income from fundraising events
(not including $ of
contributions reported on line lc).
See Part IV, line 18 . 8a
CC b Less: direct expenses . 8b
c Net income or (loss) from fundraising events
., Gross income from gaming activities.
See Part IV, line 19 . 9a
b Less: direct expenses . 9b
c Net income or (loss) from gaming activities
10aGross sales of inventory, less
returns and allowances 10a
b Less: cost of goods sold lob
c Net income or (loss) from sales of inventory Ilp-
Miscellaneous Revenue I Business Code
2,313,9801 2,313, 980
b
c
d All other revenue
e Total. Add lines 11a-11d
12 Total revenue. See instructions
Form 990(2021)
13 0
Form 990 (2021)
Part IX Statement of Functional Expenses
Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A).
Check if Schedule O contains a response or note to any line in this Part IX . O Do not include amounts reported on lines 6b,
7b, 8b, 9b, and 10b of Part Vill.
(,a)
Total expenses
(B)
Program service
expenses
(c)
Management and
general expenses
(D)
Fundraising
expenses
1 Grants and other assistance to domestic organizations and domestic governments. See Part IV, line 21 . .
2 Grants and other assistance to domestic individuals. See Part IV, line 22
3 Grants and other assistance to foreign organizations, foreign governments, and foreign individuals. See Part IV, lines 15 and 16.
4 Benefits paid to or for members . .
5 Compensation of current officers, directors, trustees, and key employees
6 Compensation not included above, to disqualified persons (as defined under section 4958(f)(1)) and persons described in section 4958(c)(3)(B) . .
7 Other salaries and wages .
8 Pension plan accruals and contributions (include section 401(k) and 403(b) employer contributions) . .
9 Other employee benefits .
10 Payroll taxes .
11 Fees for services (non -employees):
a Management . .
b Legal . .
c Accounting . .
d Lobbying . .
e Professional fundraising services. See Part IV, line 17 f Investment management fees . .
g Other (If line 11g amount exceeds 10% of line 25, column (A) amount, list line 11g expenses on Schedule O)
12 Advertising and promotion .
13 Office expenses .
14 Information technology . .
15 Royalties . .
16 Occupancy . .
17 Travel .
18 Payments of travel or entertainment expenses for any federal, state, or local public officials .
19 Conferences, conventions, and meetings . .
20 Interest . .
21 Payments to affiliates . .
22 Depreciation, depletion, and amortization
23 Insurance .
24 Other expenses. Itemize expenses not covered above (List miscellaneous expenses in line 24e. If line 24e amount
exceeds 10% of line 25, column (A) amount, list line 24e 964,620
964,620
291,591
291,591
248,036
248,036
81,516
81,516
141,021
141,021
16,878
16,878
20,581
20,581
20,849
20,849
3,564
3,564
expenses on Scneouie v.)
a OFFICE LEASE
270,201
270,201
b EQUIPMENT
67,150
67,150
c REPAIRS & MAINTENANCE
50,504
50,504
d MEETING & EDUCATION
41,654
41,654
e All other expenses
61,138
61,138
25 Total functional expenses. Add lines 1 through 24e
2,279,303
2,279,303
0 0
26 Joint costs. Complete this line only if the organization reported in column (B) joint costs from a combined
educational campaign and fundraising solicitation.
Check here F C) if following SOP 98-2 (ASC 958-720).
Form 990 (2021)
Form 990 (2021) Page it
Part X Balance Sheet
Check if Schedule O contains a response or note to any line in this Part IX . (A)
(B)
Beginning of year
End of year
1 Cash -non -interest -bearing .
140,707
1 47,669
2 Savings and temporary cash investments .
2 3 Pledges and grants receivable, net .
3 4 Accounts receivable, net .
18,822
4 1 211,196
5 Loans and other receivables from any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or 35% controlled entity or family member of any of these persons 5 6 Loans and other receivables from other disqualified persons (as defined under section 4958(f)(1)), and persons described in section 4958(c)(3)(B) . . . 6 7 Notes and loans receivable, net .
8 Inventories for sale or use
9 Prepaid expenses and deferred charges .
7 8
107,575
9 80,238
10a Land, buildings, and equipment: cost or other
basis. Complete Part VI of Schedule D 10a 260,356
b Less: accumulated depreciation 30b 128,483
9,185
10c
131,873
11 Investments —publicly traded securities .
11 12 Investments —other securities. See Part IV, line 11 . 12 13 Investments —program -related. See Part IV, line 11 . 13 14 Intangible assets .
14 15 Other assets. See Part IV, line 11 .
75,000
15 1 2,423,950
16 Total assets. Add lines 1 through 15 (must equal line 33) . 351,289
16 2,894,926
17 Accounts payable and accrued expenses .
12,472
17 13,535
18 Grants payable .
i8
19 Deferred revenue .
19 20 Tax-exempt bond liabilities .
20 21 Escrow or custodial account liability. Complete Part IV of Schedule D 21 y�
M
22 Loans and other payables to any current or former officer, director, trustee, key employee, creator or founder, substantial contributor, or 35% controlled entity or family member of any of these persons
22 J
23 Secured mortgages and notes payable to unrelated third parties 23 24 Unsecured notes and loans payable to unrelated third parties . 24 25 Other liabilities (including federal income tax, payables to related third parties, 297,673
25 2,805,570
and other liabilities not included on lines 17 - 24).
Complete Part X of Schedule D
310,145
26 2,819,105
26 Total liabilities. Add lines 17 through 25
Organizations that follow FASB ASC 958, check here F 0 and complete lines 27, 28, 32, and 33.
27 Net assets without donor restrictions . I
7R Nat accatc with dnnnr ractrirtinnc - - - - - - - - - - - I 41,1441
27 I 75,821
I
7R
I
Organizations that do not follow FASB ASC 958, check here 06 and L6. complete lines 29 through 33.
G 29 Capital stock or trust principal, or current funds I I 29 30 Paid -in or capital surplus, or land, building or equipment fund . I I 30 31 Retained earnings, endowment, accumulated income, or other funds I I 31 .6 32 Total net assets or fund balances . . . . . . . . . . . I 41,1441 32 2 33 Total liabilities and net assets/fund balances . 351,2891 33 Form 990 (2021)
75,821
2,894,926
Form 990 (2021)
cart n Reconcilliation of Net Assets
Check if Schedule O contains a response or note to any line in this Part XI . . . . . . . . . . . . . . 0 1 Total revenue (must equal Part All, column (A), line 12) . . 2 Total expenses (must equal Part IX, column (A), line 25) . . 3 Revenue less expenses. Subtract line 2 from line 1 . . 4 Net assets or fund balances at beginning of year (must equal Part X, line 32, column (A)) . . 5 Net unrealized gains (losses) on investments . .
6 Donated services and use of facilities . .
7 Investment expenses . .
8 Prior period adjustments . .
9 Other changes in net assets or fund balances (explain in Schedule O) . . 10 Net assets or fund balances at end of year. Combine lines 3 through 9 (must equal Part X, line 32, column (B)) 2,313,980
2,279,303
34,677
41,144
0 75,821
Part XI Financial Statements and Reporting
Check if Schedule O contains a response or note to any line in this Part Al Yes I No
1 Accounting method used to prepare the Form 990: 0 Cash 0 Accrual 0 Other If the organization changed its method of accounting from a prior year or checked "Other," explain on Schedule O.
2a Were the organization's financial statements compiled or reviewed by an independent accountant? If `Yes; check a box below to indicate whether the financial statements for the year were compiled or reviewed on a separate basis, consolidated basis, or both:
0 Separate basis 0 Consolidated basis Both consolidated and separate basis b Were the organization's financial statements audited by an independent accountant? If 'Yes,' check a box below to indicate whether the financial statements for the year were audited on a separate basis, consolidated basis, or both:
0 Separate basis 0 Consolidated basis 0 Both consolidated and separate basis 2a
2b I Yes
c If "Yes," to line 2a or 2b, does the organization have a committee that assumes responsibility for oversight of the audit, review, or compilation of its financial statements and selection of an independent accountant? 2c Yes If the organization changed either its oversight process or selection process during the tax year, explain in Schedule O. 3a As a result of a federal award, was the organization required to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133? 3a
b If "Yes," did the organization undergo the required audit or audits? If the organization did not undergo the required audit or audits, explain why in Schedule O and describe any steps taken to undergo such audits. 3b No
No
Form 990 (2021)
Form 990 (2021)
Additional Data Return to Form
Software ID:
Software Version:
Form 990, Special Condition Description:
efile Public Visual Render I Ob'ectIcl: 202343189349309624 - Submission: 2023-11-14 1 TIN: 46-1758405 SCHEDULE D Supplemental Financial Statements OMB No. 1545-0047 (Form 990) 2022
►
Complete if the organization answered "Yes," on Form 990, Part IV, line 6, 7, 8, 9, 10, 11a, 11b, 11c, 11d, 11e, 11f, 12a, or 12b.
Department of the Treasury I~ Attach to Form 990. )pe.
Internal Revenue Service F Go to www.irs.gov/Form990 for instructions and the latest information. r., c.,nrrinn Name of the organization Employer identification number
NEWPORT BEACH & COMPANY
46-1758405
Part I Organizations Maintaining Donor Advised Funds or Other Similar Funds or Accounts.
Complete if the organization answered "Yes" on Form 990 Part IV line 6. (a) Donor advised funds (b) Funds and other accounts
1 Total number at end of year . . . . . . . . .
2 Aggregate value of contributions to (during year)
3 Aggregate value of grants from (during year)
4 Aggregate value at end of year . . . . . . . .
5 Did the organization inform all donors and donor advisors in writing that the assets held in donor advised funds are the organization's property, subject to the organization's exclusive legal control? . . . . . . . . . . . . 0 Yes 0 No 6 Did the organization inform all grantees, donors, and donor advisors in writing that grant funds can be used only for charitable purposes and not for the benefit of the donor or donor advisor, or for any other purpose conferring impermissible private benefit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Yes 0 No Part II Conservation Easements.
Complete if the organization answered "Yes" on Form 990, Part IV, line 7. 1 Purpose(s) of conservation easements held by the organization (check all that apply). 0 Preservation of land for public use (e.g., recreation or education) 0 Preservation of an historically important land area Protection of natural habitat 0 Preservation of a certified historic structure Preservation of open space
2 Complete lines 2a through 2d if the organization held a qualified conservation contribution in the form of a conservation easement on the last day of the tax year. I Held at the End of the Year a Total number of conservation easements . . . . . . . . . . . . . . . . . . . . . . 2a b Total acreage restricted by conservation easements . . . . . . . . . . . . . . . . . . 2b c Number of conservation easements on a certified historic structure included in (a) . . . . . 2c d Number of conservation easements included in (c) acquired after 7/25/06, and not on a historic 2d structure listed in the National Register . . .
3 Number of conservation easements modified, transferred, released, extinguished, or terminated by the organization during the tax year F
4 Number of states where property subject to conservation easement is located F 5 Does the organization have a written policy regarding the periodic monitoring, inspection, handling of violations, and enforcement of the conservation easements it holds? . . . . . . . . . . . . 0 Yes 0 No 6 Staff and volunteer hours devoted to monitoring, inspecting, handling of violations, and enforcing conservation easements during the year F
7 Amount of expenses incurred in monitoring, inspecting, handling of violations, and enforcing conservation easements during the year F$
8 Does each conservation easement reported on line 2(d) above satisfy the requirements of section 170(h)(4)(13)(i) and section 170(h)(4)(13)(ii)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 Yes 0 No 9 In Part XIII, describe how the organization reports conservation easements in its revenue and expense statement, and balance sheet, and include, if applicable, the text of the footnote to the organization's financial statements that describes the organization's accounting for conservation easements.
Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets.
Complete if the organization answered "Yes" on Form 990, Part IV, line 8. la If the organization elected, as permitted under FASB ASC 958, not to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide, in Part XIII, the text of the footnote to its financial statements that describes these items. b If the organization elected, as permitted under FASB ASC 958, to report in its revenue statement and balance sheet works of art, historical treasures, or other similar assets held for public exhibition, education, or research in furtherance of public service, provide the following amounts relating to these items:
(1) Revenue included on Form 990, Part VIII, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . F $ (ii)Assets included in Form 990, Part X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► $ 2 If the organization received or held works of art, historical treasures, or other similar assets for financial gain, provide the following amounts required to be reported under FASB ASC 958 relating to these items:
a Revenue included on Form 990, Part VIII, line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . F $ b Assets included in Form 990, Part X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ► $ For Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 52283D Schedule D (Form 990) 2021
Schedule D (Form 990) 2021 Page 2
Part III Organizations Maintaining Collections of Art, Historical Treasures, or Other Similar Assets (continued) 3 Using the organization's acquisition, accession, and other records, check any of the following that are a significant use of its collection items (check all that apply):
a 0 Public exhibition d 0 Loan or exchange programs
b e
Scholarlyresearch 0 Other_................................................................................................. c Preservation for future generations
4 Provide a description of the organization's collections and explain how they further the organization's exempt purpose in Part XIII.
5 During the year, did the organization solicit or receive donations of art, historical treasures or other similar assets to be sold to raise funds rather than to be maintained as part of the organization's collection?. . . 0 Yes 0 No Part IV Escrow and Custodial Arrangements.
Complete if the organization answered "Yes" on Form 990, Part IV, line 9, or reported an amount on Form 990, Part X, line 21.
la Is the organization an agent, trustee, custodian or other intermediary for contributions or other assets not included on Form 990, Part X? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . • • 0 Yes 0 No b If "Yes," explain the arrangement in Part XIII and complete the following table: Amount c Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . lc d Additions during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . ld e Distributions during the year . . . . . . . . . . . . . . . . . . . . . . . . . . le f Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . if 2a Did the organization include an amount on Form 990, Part X, line 21, for escrow or custodial account liability? ... 0 Yes 0 No b If "Yes," explain the arrangement in Part XIII. Check here if the explanation has been provided in Part XIII . . . . 0 Part V Endowment Funds.
Cmmnlete if the nraani7atinn answered "Yes" nn Fnrm 990_ Part TV_ line 1 n- is Beginning of year balance . .
b Contributions . .
c Net investment earnings, gains, and losses
d Grants or scholarships . .
e Other expenditures for facilities
and programs . .
f Administrative expenses . .
g End of year balance . .
(a) Current year
(b) Prior year
(c) Two years back
(d) Three years back
(e) Four years back
2 Provide the estimated percentage of the current year end balance (line 1g, column (a)) held as:
a Board designated or quasi -endowment F .......................................... b Permanent endowment F
..........................................
c Term endowment F..........................................
The percentages on lines 2a, 2b, and 2c should equal 100%. 3a Are there endowment funds not in the possession of the organization that are held and administered for the organization by:
Yes No
(i) Unrelated organizations .
3a(i)
(ii) Related organizations .
3a(ii)
b If "Yes" on 3a(ii), are the related organizations listed as required on Schedule R? . 3b
4 Describe in Part XIII the intended uses of the organization's endowment funds.
Part VI Land, Buildings, and Equipment.
Complete if the organization answered "Yes" on Form 990 Part IV line lla. See Form 990 Part X line 10.
Description of property
(a) Cost or other basis
(b) Cost or other basis (other)
(c) Accumulated depreciation
(d) Book value
(investment)
la Land . .
b Buildings . .
36,230
9,759
26,471
c Leasehold improvements
d Equipment .
224,126
118,724
105,402
e Other . .
Total. Add lines la through le. (Column (d) must equal Form 990, PartX, column (B), line 10(c).) ► 131,873
Schedule D (Form 990) 2021
Schedule D (Form 990) 2021
Part v11 Investments - Other Securities.
Cmmnlata if tha nrnani7atinn ancwarari "Yac" nn Fnrm ggfl_ Part TV ling 11 h_Saa Fnrm ggfl_ Part X_ ling 1 7_ (a) Description of security or category
(including name of security)
(b)
Book
value
(c) Method of valuation:
Cost or end -of -year market value
(1) Financial derivatives .
(2) Closely -held equity interests .
(3)Other
(A)
(B)
(C)
(D)
(E)
(F)
(G)
(H)
Total. (Column (b) must equal Form 990, Part X, col. (B) line 12.) Part VIII Investments - Program Related.
Complete if the organization answered 'Yes' on Form 990, Part IV, line 11c. See Form 990, Part X, line 13. (a) Description of investment
(b) Book value
(c) Method of valuation:
Cost or end -of -year market value
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(e) line 13.) Other Assets.
Cmmnlete if the ornani72tinn answered 'Yes' nn Form 990. Part TV. line 11 d. see Form q9n. Part X. line 15. (a) Description
(b) Book value
(1)OTHER ASSETS
50,000
(2)OPERATING LEASE RIGHT -OF -USE ASSETS
2,327,598
(3)DEFERED SUBLEASE INCOME
46,352
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col. (B) line 15.) 2,423,950
Fart _ Other Liabilities.
Complete if the organization answered 'Yes' on Form 990 Part IV line 11e or 11f.See Form 990 Part X line 25.
1. (a) Description of liability I (b) Book value
Federal income taxes
(5)
(6)
(7)
(8)
(9)
Total. (Column (b) must equal Form 990, Part X, col.(e) line 25.) 2,805,570
2. Liability for uncertain tax positions. In Part XIII, provide the text of the footnote to the organization's financial statements that reports the organization's liability for uncertain tax positions under FIN 48 (ASC 740). Check here if the text of the footnote has been provided in Part XIII 0 Schedule D (Form 990) 2021
Schedule D (Form 990) 2021 Page 4
Part XI Reconciliation of Revenue per Audited Financial Statements With Revenue per Return.
Complete if the organization answered 'Yes' on Form 990 Part IV line 12a. 1 Total revenue, gains, and other support per audited financial statements . 1 2,313,980 2 Amounts included on line 1 but not on Form 990, Part VIII, line 12:
a Net unrealized gains (losses) on investments . 2a
b Donated services and use of facilities . 2b
c Recoveries of prior year grants . 2c
d Other (Describe in Part XIII.) . 2d
e Add lines 2a through 2d . . . . . . . . . . . . . . . . . . . . . 2e 0 3 Subtract line 2e from line 1 . 3 2,313,980
4 Amounts included on Form 990, Part VIII, line 12, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b 4a b Other (Describe in Part XIII.) . 4b
c Add lines 4a and 4b . 4c 0
5 Total revenue. Add lines 3 and 4c. (This must equal Form 990, Part I, line 12.) . 5 2,313,980 Part XII Reconciliation of Expenses per Audited Financial Statements With Expenses per Return.
Complete if the organization answered 'Yes' on Form 990 Part IV line 12a. 1 Total expenses and losses per audited financial statements . 1 2,279,303 2 Amounts included on line 1 but not on Form 990, Part IX, line 25:
a Donated services and use of facilities . 2a
b Prior year adjustments . 2b
c Other losses . 2c
d Other (Describe in Part XIII.) . 2d
e Add lines 2a through 2d . . . . . . . . . . 2e 0
3 Subtract line 2e from line 1 . 3 2,279,303
4 Amounts included on Form 990, Part IX, line 25, but not on line 1:
a Investment expenses not included on Form 990, Part VIII, line 7b 4a b Other (Describe in Part XIII.) . 4b
c Add lines 4a and 4b . 4c 0
5 Total expenses. Add lines 3 and 4c. (This must equal Form 990, Part I, line 18.) . 5 2,279,303 Part XIII Supplemental Information
Provide the descriptions required for Part II, lines 3, 5, and 9; Part III, lines is and 4; Part IV, lines lb and 2b; Part V, line 4; Part X. line 2; Part XI, lines 2d and 4b; and Part XII, lines 2d and 4b. Also complete this part to provide any additional information. urn Reference Explanation
PART X, LINE 2: THE ORGANIZATION ANNUALLY EVALUATES TAX POSITIONS AS PART OF THE PREPARATION OF ITS EXEMPT TAX RETURN. THIS PROCESS INCLUDES AN ANALYSIS OF WHETHER TAX POSITIONS THE
ORGANIZATION TAKES WITH REGARD TO A PARTICULAR ITEM OF INCOME OR DEDUCTION WOULD
MEET THE DEFINITION OF AN UNCERTAIN TAX POSITION UNDER CURRENT ACCOUNTING GUIDANCE. THE ORGANIZATION BELIEVES ITS TAX POSITIONS ARE APPROPRIATE BASED ON CURRENT FACTS AND CIRCUMSTANCES. THE ORGANIZATION'S POLICY IS TO RECOGNIZE
INTEREST ACCRUED RELATED TO UNRECOGNIZED TAX BENEFITS IN INTEREST EXPENSE AND PENALTIES IN OPERATING EXPENSES. AT JUNE 30, 2023 AND 2022, THE ORGANIZATION DID NOT HAVE ANY UNRECOGNIZED TAX BENEFITS. THE ORGANIZATION IS NO LONGER SUBJECT TO INCOME TAX EXAMINATIONS BY TAX AUTHORITIES FOR YEARS BEFORE 2019.
Schedule D (Form 990) 2021
Additional Data
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erne ruouc Visual rcenuer I uo ecuu: zuza azayswy3uvoz4 - muomrssron: cuts-11-10 I I IN: wo-iioawuo Schedule 7
Compensation Information
OMB No. 1545-0047
(Form 990)
2�22
For certain Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees
F Complete if the organization answered "Yes" on Form 990, Part IV, line 23. ► Attach to Form 990.
Department of the Treasury
F Go to wwwdrs.gov/Form990 for instructions and the latest information.
Open t0 Public
NEWPORT BEACH & COMPANY
46-1758405
Part I Questions Regarding Compensation
Yes
No
1a Check the appropiate box(es) if the organization provided any of the following to or for a person listed on Form 990, Part VII, Section A, line Ia. Complete Part III to provide any relevant information regarding these items. 0 First-class or charter travel 0 Housing allowance or residence for personal use 0 Travel for companions 0 Payments for business use of personal residence 0 Tax idemnification and gross -up payments 0 Health or social club dues or initiation fees 0 Discretionary spending account 0 Personal services (e.g., maid, chauffeur, chef) b If any of the boxes on Line Ia are checked, did the organization follow a written policy regarding payment or reimbursement or provision of all of the expenses described above? If "No," complete Part III to explain . 1b
Yes
2 Did the organization require substantiation prior to reimbursing or allowing expenses incurred by all directors, trustees, officers, including the CEO/Executive Director, regarding the items checked on Line Ia? . 2 Yes
3 Indicate which, if any, of the following the filing organization used to establish the compensation of the organization's CEO/Executive Director. Check all that apply. Do not check any boxes for methods used by a related organization to establish compensation of the CEO/Executive Director, but explain in Part III.
Compensation committee 0 Written employment contract
Independent compensation consultant 0 Compensation survey or study 0 Form 990 of other organizations 0 Approval by the board or compensation committee 4 During the year, did any person listed on Form 990, Part VII, Section A, line Ia, with respect to the filing organization or a related organization:
a Receive a severance payment or change -of -control payment? . 4a
No
4b
No
b Participate in, or receive payment from, a supplemental nonqualified retirement plan? . 4c
No
c Participate in, or receive payment from, an equity -based compensation arrangement? .
If "Yes" to any of lines 4a-c, list the persons and provide the applicable amounts for each item in Part III.
Only 501(c)(3), 501(c)(4), and 501(c)(29) organizations must complete lines 5-9. 5 For persons listed on Form 990, Part VII, Section A, line Ia, did the organization pay or accrue any compensation contingent on the revenues of:
a The organization? .
Sa
5b
b Any related organization? .
If "Yes," on line 5a or 5b, describe in Part III.
6 For persons listed on Form 990, Part VII, Section A, line Ia, did the organization pay or accrue any compensation contingent on the net earnings of:
a The organization? .
6a
b Any related organization? .
6b
If "Yes," on line 6a or 6b, describe in Part III.
7 For persons listed on Form 990, Part VII, Section A, line Ia, did the organization provide any nonfixed payments not described in lines 5 and 6? If "Yes," describe in Part III . 7 8 Were any amounts reported on Form 990, Part VII, paid or accured pursuant to a contract that was subject to the initial contract exception described in Regulations section 53.4958-4(a)(3)? If "Yes," describe in Part III . .
8 9 If "Yes" on line 8, did the organization also follow the rebuttable presumption procedure described in Regulations section
53.4958-6(c)? .
9 :or Paperwork Reduction Act Notice, see the Instructions for Form 990. Cat. No. 50053T Schedule 3 (For
Schedule I (Form 990) 2022 Page 2
Part II Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Use duplicate copies if additional space is needed.
For each individual whose compensation must be reported on Schedule 3, report compensation from the organization on row (i) and from related organizations, described in the instructions, on row (ii). Do not list anv individuals that are not listed on Form 990. Part VII.
Note. The sum of columns B - iii for each listed individual must equal the total amount of Form 990 Part VII Section A line Ia ap licable column D and E amounts
for that individual.
(A) Name and Title
(B) Breakdown of W-2, 1099-MISC compensation,
(C) Retirement
(D) Nontaxable
(E) Total of
(F)
and/or 1099-NEC
and other
benefits
columns
Compensation in
deferred
(B)(i)-(D)
column (B)
(i) Base
(iii)
(Ill) Other
compensation
Bonus &
reportable
compensation
reported as
incentive
compensation
deferred on prior
compensation
Form 990
SGARY SHERWIN
(i)
350,405
0 0
33,357
26,431
410,193
0 PRESIDENT/CEO
- - - - - - - - -
_________
_________
_________
________
______
_________
- - --
-- --
-- --
-- - --
-- - - --
-- --
0 0
0 0
0 -
0 0
2LILY PEARSON
(i)
174,690
0 0
8,688
18,687
202,065
0 VP OF FINANCE
- - - - - - - - -
(ii)
- - - -
- - - -
- - - -
- - - - -
- - - - - -
- - - -
0 0
0 0
0 -
0 0
3DOUG MCCLAIN
0)0
168,520
0 6,685
1-
0 CHIEF MARKETING OFFICER
- - - - - - - - -
--- - - -- --
- -- --- ---
---------
- - -
-----
- - -
-- - - --
--- - - - ---
- - --
- - --
- - --
- - - --
- - - - --
- - --
0 0
0 0
0 -
0 0
Schedule I (Form 990) 2022
Schedule (Form 990) 2022 Page 3
Part III Supplemental Information
Provide the information explanation, or descri tions required for Part I lines la 16 3 4a 4b 4c Sa 5b 6a 6b 7 and 8 and for Part II. Also complete this partforany additional information.
Return Reference Explanation
PART I, LINE 3 ITHE BOARD CHAIRPERSON APPROVES ALL CEO MONTHLY EXPENSES AND COMPENSATION IS APPROVED BY THE COMPENSATION COMMITTEE.
SCHEDULE 3, PART I, LINE lA THE ORGANIZATION PROVIDES ANNUAL REIMBURSEMENT OF UP TO $500 FOR ALL EMPLOYEES RELATED TO HEALTH CLUB DUES.
Additional Data
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Schedule 3 (Form 990) 2022
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efile Public Visual Render I Ob'ectId: 202343189349309624 - Submission: 2023-11-14 1 TIN: 46-1758405 OMB No. 1545-0047
SCHEDULE O Supplemental Information to Form 990 or 990-EZ 2021 (Form 990) Complete to provide information for responses to specific questions on Form 990 or 990-EZ or to provide any additional information.
Department of the Treasury 11- Attach to Form 990 or 990-EZ.
Internal Revenue Service 11,- Go to www.irs.gov/Form990 for the latest information.
Name of the organization
NEWPORT BEACH & COMPANY
Employer identification number
46-1758405
RM 9 00,
F
TAX RETURN PROVIDED TO VP OF FINANCE FOR REVIEWAND IT IS SUBSEQUENTLY APPROVED AT BOARD MEETING T VI,
BEFORE IT IS FILED.
CTION B,
LINE 11B
FORM 990,
AS AN EMPLOYEE OF NEWPORT BEACH & COMPANY, YOU ARE EXPECTED TO USE GOOD JUDGMENT TO AVOID ANY
PART VI,
ACTIVITY, INVESTMENT, OR INTEREST THAT ACTUALLY OR POTENTIALLY CREATES A CONFLICT BETWEEN YOUR
SECTION B,
PERSONAL INTERESTS AND THE INTEREST OF NEWPORT BEACH & COMPANY OR ITS PARTNERS, INCLUDING ANY LINE 12C
BEHAVIOR WHICH GIVES THE APPEARANCE OF TAKING MONEY, MERCHANDISE, OR SERVICES FROM A CUSTOMER OR VENDOR FOR PERSONAL GAIN. IF YOU ARE UNCERTAIN AS TO WHETHER A CERTAIN TRANSACTION, ACTIVITY OR RELATIONSHIP CONSTITUTES A CONFLICT OF INTEREST, YOU SHOULD DISCUSS THE MATTER WITH MANAGEMENT. IF
YOU OR SOMEONE WITH WHOM YOU HAVE A CLOSE RELATIONSHIP (SUCH AS A FAMILY MEMBER OR CLOSE
COMPANION) ENGAGES IN ANY ACTIVITY OR TRANSACTION WHICH MIGHT CAUSE A CONFLICT BETWEEN YOUR
PERSONAL INTEREST AND NEWPORT BEACH & COMPANY'S INTEREST, INFORMATION ABOUT THAT POTENTIAL
CONFLICT MUST BE DISCLOSED IN ADVANCE TO MANAGEMENT, AND ANY EXCEPTION TO THIS GUIDELINE MUST BE APPROVED BY THE PRESIDENT/CEO OF NEWPORT BEACH & COMPANY IN ADVANCE IN WRITING. FAILURE TO ADHERE
TO THIS GUIDELINE, INCLUDING FAILURE TO DISCLOSE ANY CONFLICTS OR TO SEEK AN EXCEPTION, MAY RESULT IN DISCIPLINE, UP TO AND INCLUDING TERMINATION OF EMPLOYMENT." AS PART OF THIS POLICY, EACH YEAR TWO DISCLOSURES ARE PROVIDED TO THE BOARD OF DIRECTORS AND THE EXECUTIVE TEAM OF THE ORGANIZATION.
THE ANNUAL DISCLOSURE REQUESTS INFORMATION REGARDING ANY FAMILY OR BUSINESS RELATIONSHIPS AND ANY POSSIBLE COMPENSATION RECEIVED. THE OTHER DISCLOSURE CONFIRMS THE UNDERSTANDING OF THE CONFLICT OF INTEREST POLICYAND PROVIDES SPACE FORAN EXPLANATION.
FORM 990,
A COMPENSATION COMMITTEE WAS FORMED BY 3 MEMBERS OF THE BOARD. MEMBERS OF THE COMPENSATION
PART VI,
COMMITTEE CONTACTED OTHER BUREAUS, SIMILAR TO NEWPORT BEACH & COMPANY, FOR CEO COMPENSATION
SECTION B,
INFORMATION. THE BUREAUS CONTACTED INCLUDED SANTA BARBARA, SAN DIEGO, AND PALM SPRINGS. THE LINE 15A
PROPOSED COMPENSATION WAS THEN DETERMINED AND AGREED UPON BY THE COMPENSATION COMMITTEE AND PRESENTED TO THE EXECUTIVE COMMITTEE FOR FINAL APPROVAL.
FORM 990,
THE FOLLOWING DOCUMENTS ARE AVAILABLE FOR REVIEW UPON REQUEST: FORM 990, FORM 1024, ARTICLES OF
PART VI,
INCORPORATION, BYLAWS, AND DETERMINATION LETTER. THE FORM 990 IS ALSO AVAILABLE ON GUIDESTAR.COM.
SECTION C,
LINE 19
FORM 990,
PROFESSIONAL FEES: PROGRAM SERVICE EXPENSES 39,901. MANAGEMENT AND GENERAL EXPENSES 0.
PART IX,
FUNDRAISING EXPENSES 0. TOTAL EXPENSES 39,901. POSTAGE & FEES: PROGRAM SERVICE EXPENSES 20,820.
LINE 24E
MANAGEMENT AND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 20,820. LOSS ON ASSETS:
PROGRAM SERVICE EXPENSES 417. MANAGEMENTAND GENERAL EXPENSES 0. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 417.
FORM 990,
NO CHANGES IN THE ORGANIZATION'S PROCESSES FOR OVERSIGHT OF THE AUDIT OR SELECTION OF INDEPENDENT
PART XII,
ACCOUNTANTS DURING THE YEAR ENDED JUNE 30, 2023.
LINE 2C:
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990•EZ. Cat. No. 51056K Additional Data
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Schedule 0 (Form 990) 2021
Return to Form
SCHEDULER OMB No. 1545-0047
Related Organizations and Unrelated Partnerships (Form 990) ► Complete if the organization answered "Yes" on Form 990, Part IV, line 33, 34, 35b, 36, or 37. 2022 F Attach to Form 990.
Department of the Treasury ► Go to www.irs.gov/Form990 for instructions and the latest information. Open to Public oco,.— Inspection
NEWPORT BEACH & COMPANY
46-1758405
Part I Identification of Disregarded Entities. Complete if the organization answered "Yes" on Form 990, Part IV, line 33. nu
(a)
Name, address, and EIN (if applicable) of disregarded entity (b)
Primary activity
(c)
Legal domicile (state
or foreign country)
(d)
Total income
(e)
End -of -year assets
(f)
Direct controlling
entity
Part 11 iaentiticatlon oT Relatea Tax-exempt organizations. complete Ir the organization answered "Yes, on Form yyU, Part IV, line 34 Decause it naa one or more A Sri- the ram....
(a)
Name, address, and EIN of related organization
(b)
Primary activity
(c)
Legal domicile (state
or foreign country)
(d)
Exempt Code section
(e)
Public charity status
(if section 501(c)(3))
(f)
Direct controlling
entity
(g)
Section 512(b)
(13) controlled
entity?
Yes
No
(1)VISIT NEWPORT BEACH INC
1600 NEWPORT CENTER DRIVE SUITE 120
NEWPORT BEACH, CA 92660
51-0225353
NEWPORT BEACH VISITOR
AND CONVENTION SERVICES
CA
501(C)(6)
No
(2)NEWPORT BEACH FOUNDATION
1600 NEWPORT CENTER DRIVE SUITE 120
NEWPORT BEACH, CA 92660
46-2413837
TO PROVIDE SCHOLARSHIPS,
SUPPORT FOR CHARITY
EVENTS, PROMOTE SOCIAL
WELFARE
CA
501(C)(3)
LINE 7
No
For Paperwork Reduction Act Notice, see the Instructions for Form 990.