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Accounting For Our Money

Is Paying $3 for $1 in Results the "Optimum" Use of Our Tax Dollars?

This week we’ve been discussing one area of the Hudson city budget that comprises a significant amount of our money (over $100,000), but that does not seem to get a significant amount of city oversight.  That would be the use of tax dollars given to the Hudson Area Chamber of Commerce and Tourism Bureau, to be used in advertising and promoting tourist visits to Hudson.

(It should be noted here that these funds also go to operate the Visitors Bureau, located in the Chamber offices.  Since the Visitors Bureau is set up to dispense informational brochures to Hudson visitors but is closed on weekends, when most of the visitor traffic could be expected, it’s possibly not much of a factor.)

Back to the budget.  When first asked, months ago, about the use of our tax dollars for tourism, the HACCTB president was not forthcoming with satisfactory answers.  Repeated inquiries also got nowhere.  Only after hiring legal counsel and pointing out that state law requires these answers did any internal dollar figures result, and here are some of them:

In 2004, this organization had operating revenue of $434,435.  With the addition of $56,384 of government grants (this is our money) to promote tourism, total revenues were $490,819.  Now, we have to stop here and remind ourselves that we aren’t concerned with the internal workings of the Chamber of Commerce.  The Chamber is a member-owned trade association, whose members by and large are hard-working business people who want the same thing for our city that we want: increased prosperity.  The Chamber members have nothing to do with this discussion.  We’re talking here only of the executive branch of the HACCTB, and only of our tax money.  In line with this, it should be noted that the president of this organization received compensation - salary plus benefits - of $48,727 in 2004.  This was 11% of the operating revenues, which one Hudson business owner (and Chamber member) has reported as being the norm in the industry.

Fast forward to 2011, the last year for which IRS data has been filed.  HACCTB operating revenues had fallen over 30%, no doubt due at least in part to lingering effects of the Great Recession that started in 2008 and is still reverberating to this day.  Even though revenues from operations had fallen, though, the president’s compensation had grown by 88%, to $91,710.  In other words, one person had seen a pay increase to almost one third of the organization’s operating revenues.

 What had happened?  Well, and this may or may not be related, the annual grant from the city of Hudson during this same time had grown to $108,098, bringing total HACCTB revenues for 2011 to $409,875.  So, during the time that the president’s compensation had increased by $42,983, the grant of our tax money had increased by $51,714.

 The question anyone would ask, then, is just where did our money go?  This is the answer that was so hard to get.  We now have a partial answer, and it’s as fresh as this month:

In the first nine months of 2012, the city of Hudson gave $82,661 (that’s our money) to the HACCTB for advertising and promotion of tourism.  According to their own books, the amount spent on advertising, promotion, printing, mailings, meetings, mileage, etc. was $24,857.  An amount of $50,275 was spent on “Allocations” which, according to a handwritten note from the organization, means payroll, rent, etc.  In other words, on themselves.  And the remaining $7,530 was simply declared “Income,” apparently, again, for themselves.

Certainly, someone needs to administer the process by which the advertising and the mailings are produced, and there is a cost associated with that.  But $50,275 to administer $24,857?  And to whom does the $7,530 “Income” go?

On January 14, the Hudson city council just voted to continue this arrangement for another year, this time upping the amount to be given to HACCTB to approximately $115,000 (final amount to be determined later).  This occurred without any council member asking about our $50,275, or our $7,530.  Again, there’s nothing sinister here.  The annual report from the president of HACCTB, required by law, has always been a verbal presentation.  Now the information given by the the president includes actual dollar figures, but they are buried in a packet full of other information.  Anyone could miss them.  The verbal presentation never brings up the subject of our money.

 As a counterpoint to the way this situation has been operating, the city has a written policy dictating the terms of procurement of just these types of services, to “make the maximum use of...local tax dollars by paying the optimum price...”  So here’s a reasonable question: is giving a private organization $3 of our tax dollars for every $1 spent on tourism an optimum arrangement?

If you are inclined to be upset over this situation, please don’t be, because you can’t change the past.  You can, however, influence the future, and we’ll discuss that tomorrow.  This situation can be changed, and changed right now.

 

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

mary yacoub January 25, 2013 at 04:49 AM
Gosh I don't even know where to begin with this one. I mean let's see first off. You fail to account for overhead costs when blogging. But since we all know your frustration is with the President of the Chamber for reasons I will not share, let me hit on that point. Yes her salary went up. The visitor center closed in April of 2009. So our Chamber went from being just that to a visitor center also. Yes one that is closed on Saturday. (If you would like to volunteer your time to staff it on Saturdays then I suggest you do so). None the less. The responsibilities of the Chamber increased when the Visitor center closed. Our President salary for doing her job plus taking on the visitor center responsibilities was 92,821. The only other salary lower than hers was Eden Prairies at 87,493. The other areas with higher salaries (just for being chamber president without a visitor center) were in Eau Claire 148,657; St. Paul 172,593; St. Cloud 140,920; Twin West 117,100; Metro North 245,216; Apple Valley 104,653; Rochester 176,498; Madison 171,295; Milwaukee 273,373; Duluth 173,971; Door County 126,140; LaCrosse 110,858; Minneapolis 198,453; Green Bay 190, 741. Now if you want to compare her with those Chambers that also handle a vistor center like ours is doing now then Eau Claire is 121,092; Bloomingtons President make 186,205 and their Vice President make 109,621 and Wisconsin Dells makes 142,326. Wait....need to conitinue in a new post......
mary yacoub January 25, 2013 at 05:03 AM
The Heads/Directors/Presidents of the non profits in Hudson all make more than our Chamber President. For example the Hospital Foundation, 106,714; Phipps Director 133, 492, Christian Community Home 197, 232, YMCA 118, 978 and St. Croix Community Foundation 104,653. Our School Superintendent just gave herself a raise and is making somewhere around 150,000. Our Mayor (part time gig yeah not really) makes 12,000 a year. So really Scot, our business are thriving and restaurants are always busy no matter what night of the week. I contribute that not only to good food and service form our restaurants but also to the work of our Chamber. You spoke about turning every stone and we missed this one well you know I think we have seen Hudson's downtown thrive through the recession relative to what could have happened. Kuddos to those business and Kuddos to our Chamber. Money well spent. Here is a number for you...in 2011 travel in St, Croix County increased by 2.2 million dollars. Gosh we really must be doing something wrong!
mary yacoub January 25, 2013 at 05:05 AM
Let me save everyone some reading time. In an email sent to council on Sept 29,2011. Mr. Omalley has made some suggestion for us to consider regarding how chamber funds are spent. Here is one of his suggestions: "The council has several options open: an RFP to outside organizations to handle Hudson’s tourism advertising and promotion might be a place to start. The Twin Cities area is nationally known for its number and quality of advertising and promotional agencies. Certainly a budget of $90,000 or so would draw interest. It should be noted also that the tourism events make a profit, and this could be a source of income in addition to grant funds."
Paine Reliever January 25, 2013 at 06:20 AM
Holy cow, Mary comes out guns a blazin. Scot does bring up some valid questions. I also enjoyed her attempt to say he has an ax to grind, yet won't share with us the ax. Mary Yacoub has a habit of doing that when trying to avoid taking a reasonable look at citizen concerns. I noticed all the communities she listed are larger than ours. I also have to laugh at her excuse that the salary doubled in part because of the info center closing. The info center was pretty much useless to the Hudson economy. And what about Mary Yacoub's ax? She challenges Mr. O'Malley to man up and volunteer service? Is that how she treats other citizens asking questions of our city leaders?
Scot O'Malley January 25, 2013 at 06:35 AM
Mary, please stop. Just stop, and read over what you have written here. Nothing you say relates to your principal task as a Hudson city council member, which is to look after the best interests of the citizens of this city. You swore an oath to do so when you took office. Realize that this isn't about you, and it isn't about me. It's about protecting the people of Hudson, which you swore to do, and that includes their tax dollars. There are legitimate questions being raised here, and you need to get on board to find a solution. That's what you're paid to do as a council member, and it should be your only concern. There isn't any other issue as important as that.
Paine Reliever January 25, 2013 at 06:46 AM
By the way, just what added responsibilities did the closing of the visitor center put on our local chamber? It was basically a rest stop with a map kiosk with the occasional out of town sports parent looking for the hockey rink or soccer fields.
mary yacoub January 25, 2013 at 09:26 AM
I work very hard to find solutions to every problem and turn every stone to do so. To blog on patch things we are neglecting to see when as am ex city council member of 10 years didn't decide to do anything until off the board is too much. And as far as those tax dollars. State statue is specific as to how that money is spent. Bottom line.....beds in heads does not use the tax payers of the city of Hudson's money. It is a tax which is built into the bill of hotel guests. That total tax fluctuates yearly based on how much our hotels are occupied. The council for years has consciously not raised that specific tax so as to not lock us in at a mandatory rate for beds in heads. That is being responsible to the city taxpayer. Whether we give them the 70 percent or less won't matter to the general budget because the state statue all ready requires that the money raised from that tax must be spent on tourism. Last I checked road maintenance for example is not tourism. By the way painereliever good to see you back on patch expressing your negativity towards me I so miss that from you.
mary yacoub January 25, 2013 at 09:52 AM
http://hosted.verticalresponse.com/245772/3da2afa981/1365000015/9b7015bf4c/
Paine Reliever January 25, 2013 at 11:54 AM
Come on Mrs. Yacoub, I am not negative just because I do not agree with your reasoning from time to time. Nowhere in your vast data dumping do you answer my question. Show some data about the chamber president being over-burdened and needing a doubling of salary due to the added responsibilities of the tourist info center closing. Is the downtown chamber office now swamped with weary travelers looking to use the bathroom, take a nap, get a free map, let their dogs crap or dump trash? Especially when the chamber office is closed on weekends, is not by the freeway and has no parking. Hudson businesses would thrive whether we had a chamber or not. We enjoy the second most highly traveled corridor in the state with close proximity to a major metro area. That and the river is what drives our economy and we are fortunate to have it. I don't think you or the chamber should get too much credit for our geographic location. I am sick of hearing how hard it is to make Hudson run. Any community would love to have our problems.
mary yacoub January 25, 2013 at 12:22 PM
Never gave myself credit. Gave credit to the business and the chamber for their advertising of Hudson. The Council is not responsible for the salaries of the chamber the chamber board is. This has been my point.
mary yacoub January 25, 2013 at 12:27 PM
Sorry hit return too fast. We vote on beds in heads budget not their salaries. Their is a separate board that determines that. My point is that her salary is not over the top. It is within normal limits if other chamber presidents. The second lowest as I explained. This is my point. My other point is there is a different salary scale when the chamber and visitor center are combined. That is all. She is not being over paid relative to others in that same position. Ans please the chamber most definitely aides in keeping Hudson a thriving city.
yomammy January 25, 2013 at 01:25 PM
Crank the music Scot!
Paine Reliever January 25, 2013 at 02:37 PM
Mary, forgive me for reading what you type and holding you accountable for it. You stated the following regarding O'Malley's concerns, "You fail to account for overhead costs when blogging." Then you go on to immediately state "Yes her salary went up. The visitor center closed in April of 2009. So our Chamber went from being just that to a visitor center also." So I am assuming that the closing of the visitor center created a lot of extra work and was one of your major justifications for your point that doubling chamber presidents salary was justified. So your point was actually about increased responsibility first. I disagree with that reasoning since the Tourist center was hardly visited and had little impact on local business. If you have data that shows otherwise, please provide it. This should be easy enough since you researched salaries of other unrelated non profit directors and chamber presidents from other much larger cities. Eden Prairie? Not a good example. They pay less than Hudson, have a city population of 61,000 and compete with bordering cities tooth and nail. You give many examples, I just don't know how relevant they are. How about giving us the chamber presidents salaries from River Falls, New Richmond, or Menomonie? I honestly don't know what that data would show but it may be a little more helpful in getting a true picture of the situation. If you find these questions to be too negative then we have bigger problems.
Paine Reliever January 25, 2013 at 02:44 PM
That is funny. He will never live that down.
David R Hale January 25, 2013 at 03:25 PM
Bottom line is shut HACCTB down. We don't need it!
yomammy January 25, 2013 at 03:47 PM
lets shut the docks down on first street!!!! they are harming me somehow!!!! If I cant have it...nobody can!!!
ThingsThatMakeYouGo-Hmmmm January 25, 2013 at 04:36 PM
Have you ever noticed that when you point your finger, there are three pointing back at you? A lot of finger pointing going on here. Just sayin'
Concerned Citizen #1 January 25, 2013 at 05:39 PM
settle down....
Frank McGruber January 25, 2013 at 06:29 PM
Scot, please go away. You badly lost the Mayoral election for a reason. As Paine said, you will never live down your deplorable and infantile actions disrupting a wedding at the Octagon house. Your true character was evident in those actions. You should not be a public servant, and your voice, no matter how sweet and resonant, is forever tainted.
mary yacoub January 25, 2013 at 06:56 PM
Paine your knowledge on every subject is quite noted. Why don't you take a look at the books. The original salary was in part that it was not a full years pay. We don't handle the chamber salaries. The chamber board does. I don't have an ax to grind. I never have and never will. Paine I work very hard for our City and will meet anyone who would like to meet. You email our city accounts and I respond you comment everywhere under a fake name. Maybe it is time to come out from behind the bushes and actually make an attempt to have a conversation with me vs.constantly stating that I am unwilling. It is kind of hard to hold a serious discussion with a fake personality Oh and asking Scot to volunteer his time was not meant to be disrespectful in any way. I was being serious. After all Paine it takes a village. Let me know when you are willing to come out of hiding and have an adult conversation..
Concerned Citizen #1 January 25, 2013 at 07:35 PM
so are you suggesting Mary that you have never come on any of these forums, chat boards, etc (patch, hudson star observer, etc) under a "false" or assumed name? You, at no point prior or during your tenure as a City Council member, have done this?
Paine Reliever January 25, 2013 at 08:36 PM
That is ok concerned citizen #1, no need to defend me. Mary Yacoub shows once again how thin skinned she is by not answering any of my questions and resorting to challenges of identity instead. This is funny because with all the anonymous bloggers that have agreed with her, she has yet to call out any of those people. That says a lot.
bblair January 25, 2013 at 09:27 PM
P.R. Do us all a favor and drink the Kool-Aide.
Phiddy1 January 25, 2013 at 10:15 PM
In response to your question as to how Yacoub treats citizens who question ANYTHING that the Council does, it tracks exactly on the way she reacts to Mr. O'Malley. The tone and bias of many Council members is very obvious at many Council and Committee meetings. I am often amazed at the disregard and even distain that is shown to anyone who questions or states a different opinion. In years past this was not the case. Civility is disappearing fast.
Peg January 26, 2013 at 05:28 PM
Holy cow! I followed a link and came here to comment about my concerns about far too much of our city's money being spent to pay someone for a job promoting Hudson. In this economy salaries out of proportion seem so wrong. But there is a lot of venom in the comments here. Understandably so considering how much it costs to run this city and where our tax dollars are going. I think it best that I do some further reading and research before saying any more.
Concerned Citizen #1 January 27, 2013 at 02:34 AM
Interesting Mary has yet to respond to a very pointed question. Her silence speaks volumes.
mary yacoub January 27, 2013 at 02:47 AM
Geez sorry CC1 I have been working and spending time with my family. I am at pier 500 and before that I was at agave kitchen. Both great restaurants that are chamber members. Anyways you can come on down and talk to me face to face.. and we can discuss anything and everything you want.
mary yacoub January 27, 2013 at 03:26 AM
Peg the City receives 24 cents of every dollar you spend on taxes. Which means the rest goes to schools, County, State, and Tech College. Our budget to work with this year was around 7 million dollars. I think we are doing a good job as we receive under $200,000 in State aide compared to River Falls for example who receives 2 million plus in State Aide. I really believe the chamber is a critical part of making Hudson the vibrant City that it is. Thus i believe that we are receiving a pretty good return for our Buck. I apologize if any of my comment went out of line but it is very frustrating when you are trying hard in a downward economy to keep taxes down while the other entities that make up our tax bill continually rise. It is even more frustrating when someone that respectfully served our City for 10 years decides now to bring up an issue and won't acknowledge that he had every opportunity while serving on the Council to discuss this. As I mentioned earlier, I do feel that our Chamber is important and that we are getting good results with the money spent.
yomammy January 27, 2013 at 05:05 PM
I post under my real name. Its MR. Mammy to you...
Concerned Citizen #1 January 28, 2013 at 03:33 PM
So that's a "Yes". Its fine if you have...as you can see most do for a variety of reasons, some you may agree with, others you may not. Don't call others out for something you've done yourself many times.

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