CE 2018-02 (,7?le (2710 Ark-i0 ?90 (5(3 H. Wood Thrasher, Cabinet Secretary or C0 .u RC1: (304) 558-2234 January 16, 2018 Rebecca L. Stepto an, . . mg; Executive Director West Virginia Ethics Commission 210 Brooks Street, Suite. 300 Charleston, WV 25301 RE: Request for exemption from prohibition against interests in a public contract Dear Ms. Stepto: Please accept this letter as a formal request on behalf of the West Virginia Tourism Of?ce' to receive an exemption from the prohibition against interests in public contracts pursuant to West Virginia Code Speci?cally, the WVTO seeks an exemption from the West Virginia Ethics Act to allow The Greenbrier in White Sulphur Springs, WV to purchase advertising in the newly-created cooperative advertising program. As more fully set forth below, the WVTO believes that the prohibition in this context substantially interferes with the agency's core mission, creates an undue burden. and results in excessive cost to the taxpayer. The mission is to help build and promote a world-class tourism destination that provides jobs, stimulates investment, grows existing businesses, and promotes a positive image of West Virginia as a place to visit, go to college, live, work, and retire. As part of its mission. the WVTO is mandated to develop and implement a comprehensive tourism advertising. promotion and development strategy for West Virginia, including the requirement to "leverage funding from sources other than the state." W. Va. Code To achieve this mandate, the director of the WVTO is directed to administer a cooperative advertising programz See W. Va. Code (directing the 1 During the 2017 regular legislative session, the legislature enacted SB 535, which reorganized the West Virginia Division ofTourism and continued it as the West Virginia Tourism Of?ce. 2 As part ofthe new strategy to improve tourism promotion in the West Virginia. SB 535, among other things. eliminated the Direct Advertising Grants Program (commonly referred to as See 144 CSR I (inactive); W. Va. Code 58-2- 8 9 (repealed)) and created the cooperative advertising program. State Capitol 1900 Kanau'ha Boulevard East. Building 3, Suite 500. Charleston. WV 25305 Fax: (304) 558-1189 executive director of the WVTO to create a ?cooperative advertising program to facilitate and allow participation in the West Virginia Tourism Of?ce?s advertising and marketing campaigns and activities. 5! The WVTO designed and implemented the new program during the past six months. Under CAP, non-state entities can purchase and partner with the state?s tourism funding and branding to promote their individual destinations, attractions and events through a mix of regional and local advertising opportunities. The program provides a dollar-for-dollar match and offers a variety of investment tiers. The goals of CAP3 are to increase awareness of the West Virginia brand, products and partners; create a positive shift in travelers' attitudes and perceptions towards West Virginia; provide measurable advertising outcomes for every dollar spent; and leverage state resources and partner budgets to maximize industry's overall economic impact for West Virginia. The Greenbrier is critical to success because it is one of West Virginia?s strongest and best-funded tourism assets. The exemption would allow The Greenbrier to purchase4 advertising as part ofa statewide advertising c00perative. However, because ofthe prohibition against interests in public contracts, one of the state?s premier destinations will be excluded from the centralized advertising campaign. Moreover, the ability to leverage funding from source?s other than the state is reduced. This prohibition therefore substantially interferes with the agency?s statutory duties. Unlike past programs, where the WVTO subsidized advertising for industry partners. CAP requires partners to buy into the state?s centralized advertising campaign. Under this new program, no money is given to the partners; rather. the partners provide advertising to the state to supplement its overall marketing budget. This framework is fundamentally different as it requires all advertising to align with the state?s branding strategy. In addition, the ?call to actionss? will direct consumers to the website instead ofthe private company?s web site. Furthermore, if the Greenbrier is excluded from CAP, the WVTO will not be able to showcase one of our premier attractions with the highest likelihood to attract a higher?spending demographic. Attracting a high-spending demographic was identified as a key growth opportunity the state's economy 3 More information on CAP is available at htms: This activity may be no different than similar activities which enable an applicant to perform a core business function while remaining subject to oversight from the issuing state entity, such as the purchase of an alcohol and beverage license from the West Virginia Alcohol Beverage Control Administration or a casino license from the West Virginia Lottery Commission. 4:33?42. is war ts-t-v 5 "Call-to-Action? is a term ofart in advertising which refers to a piece ofcontent intended to induce a viewer,,crtzaderlistener to perform a Specific act, such as ?buy now or "chck here . 2 . in the recent WV Forwardf? study and is a key priority in the new advertising campaign. Limiting CAD in this manner further interferes with the mission to create more opportunities for the state. Tourism advertising is important because it results in an return on investment in state and local tax revenues? Research also shows that the more out-of~state visitors who vacation in a state, the more positive image the entire state receivess. This positive association changes the overall perception of West Virginia which helps bring more tourists, retirees, and new business opportunities to West Virginia. To increase the return on investment, and increase competitiveness, the WVTO must increase its advertising revenues without causing an excessive cost to an already overburdened budget. The WVTO can overcome unnecessary costs by maximizing the dollar-for-dollar match under CAP. The Greenbrier is a key partner for this purpose. Without matching dollars from the Greenbrier, the WVTO will be forced to make smaller advertising buys, thus limiting the ability to compete with neighboring states for tourism opportunities. For the reasons articulated above, the WVTO respectfully requests that the West Virginia Ethics Commission grant an exemption pursuant to West Virginia Code from the prohibition against interests in public contracts and allow The Greenbrier to buy into CAP. The CAP began January 1, 2018, and will run through December 31. 2018. The cooperative advertising purchases for the spring/summer are pending and will be ?nalized soon. Therefore. the WVTO further requests that this matter be considered at the next regularly-scheduled commission meeting. Your attention and efforts are greatly appreciated. Very truly yours, 91"g?j192?tu?c Joshua L. Jarrell Deputy Cabinet Secretary/General Counsel West Virginia Forward is a collaboration among the West Virginia Department of Commerce which includes the WVTO, West Virginia University. and Marshall University to identify short-term. larger-scale projects that will boost West Virginia?s economic development efforts. The collaboration was supported by analysis from McKinsey 8; Company. which was focused on how West Virginia?s assets may be aligned with trending business sectors to provide potential avenues forjob growth and economic stability. McKinsey Company is a global management consulting ?rm that serves leading businesses. governments. non?governmental organizations. and not-for-pro?ts. McKinsey Company identi?ed the type of demographic that the WVTO needs to attract to the state to best serve its mission. See pages l8-22 at for more information on WV Forward: ?26- 7 See Longwoods International. 2016 West Virginia image and Advertising Accountability Research. slide 122 (h_ttps: (gotou-vconir "uploads. 30 8-slides l25-l33. (15.: