All My GBAD Children

The latest installment in the soap opera that is the Greater Boise Auditorium District


Depending on your taste for daytime drama, the soap opera that is the Greater Boise Auditorium District board has either been Idaho's most entertaining serial or its most exasperating. Its most recent episode on Nov. 16 was no exception: It featured one board member accusing her colleagues of acting "like children," a budget that a board member said "didn't pass the smell test" and the discovery that an entity pulling in millions of dollars annually had few, if any, documented procedures on disbursement authority.

In fact, GBAD is sitting on nearly $10 million in tax and fee receipts--the proceeds of the district's 5 percent hotel room levy--and has the potential to borrow millions more.

GBAD owns and operates the Boise Centre and a five-acre vacant block bordered by Front, Myrtle, 11th and 13th streets. Those who think the millions should be used to expand the existing Boise Centre and those who think the money should be spent to build a larger facility between 11th and 13th streets are regularly pitted in an ongoing debate.

The stakes are huge. Boise's convention and meeting industry continued to be a major economic engine for the region even at the height of the recession. A study by Boise State University concluded that 28 conventions booked into the Boise Centre over a 12-month period pumped approximately $31 million into the Treasure Valley economy.

But a visitor to the GBAD meetings in the last two years would have heard board members alleging open-meeting and ethics violations, conflict with its own city's convention and visitors bureau, and even one board member attempting to hold office while living and working in Eastern Idaho.

The Nov. 16 meeting stumbled from the starting gate with disagreement over additions, subtractions and changes to the agenda -- but the real tension mounted when it came time to talk about checks, both disbursements and reimbursements.

Board members and acting secretary/treasurer Stephanie Astorquia, a certified public accountant, presented a proposed policy regarding disbursements, "adopted to ensure the safeguard of the assets of the district." The policy outlines disbursement limitations (up to $10,000 for the Boise Centre executive director), the requirement of only a single signature for checks up to $10,000, and that the "person authorizing expenditure of funds must ... be free of criminal activity in their past."

"Might that include illegal use of fireworks or traffic tickets?" asked GBAD Board President Hy Kloc.

GBAD attorney Don Knickrehm of Givens Pursley advised that signors needed to be bondable by an insurance company.

"I don't think discharging fireworks or reckless driving would be a problem," said Knickrehm.

"So what's the difference between this policy and the previous policy?" asked Kloc.

Astorquia explained that the management disbursement authority was being raised from $5,000 to $10,000.

"But the real reason is that we're committing the policy to paper," she said.

An awkward silence blanketed the room.

"This board has never committed a disbursement policy to paper," said Astorquia.

Members of the public in attendance (only about 10) turned slack-jawed to each other as another silence, longer and even more awkward, returned.

"And that includes management of disbursements and authorization of payments," Astorquia said, breaking the silence.

But what followed only elevated the tension. Astorquia wanted a check of her own. She requested the board approve approximately $5,000 be reimbursed to her for what she called legal expenses.

The issue dates back to the summer of 2011, when Astorquia refused to sign a $24,500 check to the Boise Convention and Visitors Bureau. At the height of GBAD's verbal tug-of-war with BCVB, Astorquia said at the time she didn't think the transaction was legal because she thought it skirted Idaho's $25,000 procurement law, which requires a formal bidding process.

"I believed I was in an unreasonable position," Astorquia told the board. "I thought it was a possible misuse of funds at the time and sought outside counsel."

Astorquia explained to the board that she paid the legal bills out of her own pocket and wanted to be reimbursed $5,000 for those expenses.

"We didn't deem that those disbursements were illegal," said GBAD board member Gail May, who vehemently disagreed with Astorquia during last summer's controversy. "Wouldn't it have been possible for the checks to be signed by Mr. Kloc?"

"If you remember, Ms. May, I refused to sign those checks," said Astorquia. "He did sign them."

"Yes, finally," said May who wanted the last word in the debate.

But Rob Perez, GBAD's newest board member, had heard enough. At the zenith of the debate he stood up and walked out of the meeting.

When Boise Weekly later asked Perez why he had walked out (he returned a few minutes later), he said, "No comment."

"On the record ... " said Perez, who then paused for a moment. "Look, there's nothing to be gained. There's already been a board that has been at odds. It hurts me like it hurts a father when he sees his kids fighting."

It wouldn't be the only reference to kids or childlike behavior.

"I would hope that we would act more like statesmen and less like children," said GBAD Board Member Judy Peavey-Derr.

When Perez returned to the room, he took a breath and addressed his colleagues.

"We're simply trying to pay expenses. I would hope that we're getting beyond this," said Perez. "We have much more important things to do here."

When it came time to vote, Astorquia's foes didn't want her to vote on approving a reimbursement to herself.

"In my opinion, you should recuse yourself [from voting]," said May.

When Knickrehm was asked to weigh in with his legal advice, he said Idaho statute indicates that it is necessary to declare a possible conflict of interest.

"But that neither precludes the individual from debating or voting on the matter," said Knickrhem.

The GBAD voted 3-2 to approve the reimbursement to Astorquia, with Perez, Peavey-Derr and Astorquia voting "yes" and Kloc and May voting "no."

"The past is the past," said Peavey-Derr.

But the future, particularly the 2013 budget for the Boise Centre, was the subject of the next tussle.

When Boise Centre Executive Director Pat Rice asked the GBAD board to green light his spending plan for the upcoming year, he met some immediate pushback.

The $3.2 million 2013 budget forecasts flat income but calls for expenses to increase by approximately 12 percent, compared to 2012. It includes an 11 percent increase in labor expenses and a 20 percent increase in marketing and sales expenses.

"I see that your professional fees more than tripled," said May. "What's happening?"

Rice pointed to significant increases in fees, including $130,000 in legal fees, $25,000 to Convention Sports and Leisure consultants and $20,000 to the Urban Land Institute for analysis, weighing options of whether to build a new convention center or expand the existing facility.

But Perez said he didn't like the disproportionate increase in expenses when compared to flat income.

"I see labor expenses up. I see marketing and sales up," said Perez. "In my experience of working with budgets, I'm accustomed to pushing up revenues. This doesn't meet the smell test."

But Perez later told Boise Weekly that he deferred to the finance committee (comprised of Astorquia and Peavey-Derr).

"I asked them if they had looked at it closely and they said they did," said Perez. "I voiced my concerns. I deferred to the finance committee for their scrutiny."

Perez, founder, president and CEO of Boise-based Western Capital Bank, analyzes budgets for a living.

"That is not a budget scenario that my company would find acceptable," Perez told BW.

But the GBAD board approved the 2013 budget, as presented.

Up next, Rice made what most of the board members agreed was a vague request.

"We recently had a meeting with representatives from the Urban Land Institute," said Rice. "And a number of questions, concerns and suggestions were presented."

Rice said he wanted board approval for expenses to embark on what he called "a formal and organized" presentation for the ULI but when pressed, Rice said he didn't know the scope of the project or even how much money he needed.

"I am requesting the board's approval of discretionary use of time and resources," said Rice in his open-ended request. "That may include additional administrative support, legal and others."

But in spite of his asking for what amounted to a blank check, Rice conceded that the project could not be defined and still "needed to be determined."

Again, Perez questioned the lack of focus in the request.

"We're being asked to make a major investment, but we don't have a preconceived notion to what it is," said Perez. "We need to ask ourselves 'Where are we going?'"

Perez later compared the issues that continue to stalemate the GBAD board as a "microcosm of what we see at a national level."

"Think about this for a moment. Here we are in the middle of a rough economy," he said. "And the auditorium district is an entity, with enormous power in its cash flow. And we have the power to do something meaningful."

Perez took his GBAD board seat in March, replacing Mike Fitzgerald, who had resigned after spending the better part of a year balancing his GBAD duties with a job as an Eastern Idaho restaurant manager. Whether Perez decides to run for re-election to hold onto that post remains to be seen.

"If I believe that we're going in a direction that is positive, constructive and reflects the knowledge that we've gleaned, then I think I would continue to enjoy my time on the board," said Perez. "I think my running for re-election for the district board will depend heavily on the actions we take between now and when that time comes. A part of me trusts that we're set to make decisions that are in the best interests of the district. I really do. We have some important decisions to make."