Accounting For Our Money

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.