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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.

 

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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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