Locally Grown

Brilliant analysis and presentation, Griff. Quite a few citizens over the years have asked questions about the Chamber and the CVB and the exclusive and inscrutable link between them - to no avail. Perhaps now with this window on the world and your dogged determination to get some answers…answers may be at last forthcoming.

#1

Maybe my banjo has only one string since I brought this up in an earlier discussion of Chamber politics.

But isn’t this CVB-Chamber issue typical of the kind of insider politics that needs the exposure offered by authentic transparency in government? What public interest is served by hiding the issue from public scrutiny? The documents about the CVB’s budget and governance ought to be public and on the city’s web site.

My other questions are: Who on the council is going to pursue this? and What other quasi-public bodies are sitting on pots of money while the city needs cash for things like new hockey boards?

#3

Great post, Griff. As a publicly funded entity, I would think that the CVB would be empowered through its policies to collaborate with other local community organizations so long as the directive was to increase Northfield’s exposure as an evening or weekend destination. The Northfield Entertainment Guide is hands-down the best resource for a visitor or a local who is looking for something to do/see/buy. They deserve at least a link. I assume that the Guide is funded by its advertisers? If so, let’s give these local businesses additional exposure from the CVB itself.

I’d like to see some competition for the city’s contract with the CVB, in order to raise the bar on the services that we’ve come to expect. There’s so much that could be done to increase our exposure and bring people in. We could bus in groups for a Third Thursday walking tour of downtown shops, and top it off with a musical event or pub crawl or art show. We could work with the colleges to offer their visiting guests a package of “to do” stuff in Northfield, specifically tailored to their interests and the timing of their visits. There are a TON of visitors to the colleges who are taken out to eat in the cities or the southern suburbs, and their entire exposure to the downtown is a stop at Blue Mondays or Hogan Brothers.

The 2008 CVB balance sheet is a little troubling. Perhaps 75% of the CVB’s total cash assets are in savings rather than CD’s because they need the available cash flow? First National Bank’s website says that the interest on a 6 month CD right now is 1.99% and a 12 month is at 2.18%. Fransden Bank doesn’t have their current rates on their savings accounts on-line, but they can’t be that high when First National’s is at .50%, can they?

If CVB put about half of the money from savings ($67,000.00)j into a 12 month CD at First National, they’d earn almost $1,500 in interest. Assuming the interest rate at Fransden on savings is .50%, they’d earn only $336.

But even assuming that they don’t want to tie these funds up for 3 or 6 or 12 months in CDs, I’m disappointed that there isn’t at least one CD from First National, yet our other local banks are patronized.

#5

Given that, according to Chamber member comments submitted on other threads, the Chamber exists to serve the interests of Chamber businesses, how is this public money being claimed by an organization that does not advocate for non-Chamber businesses? Shouldn’t it be for the benefit of all businesses in town?

I find the secrecy difficult to understand. I see no output from the CVB. What are they producing for all those printing costs? When I see displays of brochures at hotels, etc… I never see one for Northfield. What have they brought to town? These figures and detailed accounting of their activities and minutes must be available. This is public money. We should see tangible, measurable goals and results, and these goals and results should be very public.

Ms. Feldbrugge talks about the increased arts and cultural events and increased tourism activity since the creation of the CVB (in 1987) as if they wouldn’t have come about with the involvement of the CVB? I didn’t hear a lot of evidence in her speech for that claim.

Their 1987 agreement specifies “staff and facilities” to carry out the objectives of the agreement, yet they got rid of their staff person in 1992, and now have a $133,000 savings account and claim they can’t hire a dedicated person to handle CVB (not Chamber) business?

If it is so tangled up with the Chamber, how do they tease out their “5,000 requests” that come in each year between Chamber and CVB requests?

Ms. Feldbrugge ends her presentation with a plea for help with promoting Northfield. Perhaps more people would help if they knew what was going on. The CVB’s - I’m not talking about the Chamber’s - activities must be visible and clear. I gladly and proudly support Northfield tourism and businesses, but it’s hard to collaborate with an invisible organization.

I agree that the City Council should be holding the group to a much higher, much more open and public, standard.

#7

One suggestion: Every 4th of July weekend we have an excellent cycling event in town that draws more than 100 riders and their families (maybe substantially more than 100 riders) to the heart of downtown. Yet, Northfield has never done anything to promote this event as a reason to visit Northfield!

We’re usually in town that weekend and always go down for the races. The crowds are getting a little bigger each year, but imagine if we invested $20,000 into promoting this event regionally? Or, what if we added $5,000 to the prize money for the pro race and drew some national talent to the event?

This has always seemed to me a great opportunity missed. Maybe we could open this up for suggestions on how to better put CVB money to bring the “V’s” and “C’s” to town.

#9

Some commentators are confusing their own ignorance for CVB secrecy.

The CVB does not have “public” money. It has private money raised through a lodging tax. The money can only be spent on certain items, i.e. convention and visitors bureau information. It is not off-limits. Any one of you could ask to be on the Board. The CVB Board, not the Chamber, runs it. The Chamber provides a number of administrative benefits. It is not secret. If it were, you wouldn’t be able to see the budget.

Lastly, having money in the bank is usually a sign of being well-managed. Spending the money on hockey rink boards? How about hockey parents spending money on hockey rink boards? The CVB is running a business, not a charity.

#11

David L.,

It stipulates that Chamber membership is a requirement to be on the board of advisors for the CVB, excepting the 2 mayor / council - appointed members.

So, 7 out of 9 members of the CVB board must be Chamber members.

Additionally, there are no staff dedicated to the CVB, although the 1987 agreement calls for it. The only “staff” on the CVB appear to be, also, Chamber employees, leaving one with the distinct impression that it is, indeed, being run by the Chamber.

Please explain to me how a lodging tax levied by the city, collected by the city and disbursed by the city according to State law is not public money.

Perhaps the public wouldn’t display such “ignorance,” as you called it, if things were made a whole lot clearer. I think Northfield would be much better served if the workings of this organization were open. I never hear about CVB events or see CVB publications among those from other communities.

If it is a “business”, what is the product? Can we see some results? I think that’s what people are asking, and that’s what the CVB is not answering. Even if it were a charity, we still should be able to see the benefits.

Lastly, David L., the defensive tone of your reply speaks loudly about what I and others find troubling with this issue. To draw in from a topic in another thread, it sounds to me as if there’s a touch of elitist entitlement mentality to your reply. Like you’re saying, “You guys don’t know anything. This is our money, not yours. The community has no right to it.” Usually, I like your direct take on things, but this does sound an awful lot like a sweetheart deal that is finally being opened to some real scrutiny. You obviously don’t think so.

Educate us. Relieve our ignorance.

#13

David L,

Only government has the ability to tax…..is the CVB a government agency or an agent of the City?

Who put the lodging tax in place? That was there before I got on the council.

If it is a tax, then taxpayers should enjoy control and transparency. Do you not agree?

#15

David L.,

One more aspect of your comment #11 troubles me. You said:

The CVB does not have “public” money. It has private money raised through a lodging tax. The money can only be spent on certain items, i.e. convention and visitors bureau information.

The money may be allocated to only certain items or functions, but it is still raised and sourced publicly. You are calling money that is reserved for limited functions “private”. Either that is an intentional conflation designed to confuse the issue, or you don’t understand the distinction. Either possibility is bothersome to me.

By all accounts, you appear to be a fiscal conservative. I would guess then that you want accountability for spending of government funds. Do you not want accountability for this money? Has the CVB ever been audited? If so, what were the results? Where are those results kept?

People aren’t asking to banish the CVB or to take its money, they seem to be saying that the Chamber is running it like a “private” fund with little accountability, transparency or tangible results.

Maybe another organization would do a better job of handling this public money on all three counts. That’s what I’m hearing. Why shouldn’t another organization be given that chance?

#17

Folks, the financial/legal structure of a CVB in Minnesota is a very weird duck so it’s not whacky for David L. to refer to the lodging tax as ‘private’ money, nor for Kathy to refer to it as a ‘user fee.’

It’s just not Chamber money by default/in perpetuity.

The state says that lodging tax collected on hotel room stays has to be collected by the local municipality and then handed over to a local CVB, to be designated by the local municipality.

It’s my understanding that, if the City Council wanted, it could say to the Nfld Historical Society or NAG or ArtOrg or NDDC or other non-profit,

“If you form a CVB advisory board, we’ll consider handing over the lodging tax money to you for X years to do the tourism bit for the town.”

I think it’s fine for David L to argue for keeping the money flowing to the Chamber for CVB activities because that’s where his allegiance is as a former Chamber board president.

My argument is with A) the CVB advisory board and B) Northfield City Council.

#19

I started a comment and had to do some research and lost it, so apologies if it turns up twice! Griff, and everyone — you can look up non-profits’ “financials” at http://www. guidestar.org, i.e., the Northfield Chamber of Commerce is listed, but only 2005 and 2006 990s are there. The Chamber 990 for 2006 reports $101,627 taken in, and there’s no breakdown how that was spent. Go knock on the Chamber door and have a look-see. You could also do Data Practices Act request to City for whatever they’ve got. The info is there for the asking.

#21

David L.,

It’s natural that you should defend the Chamber, much as it’s natural for me to defend myself and others with whom I agree from charges of “ignorance”.

As I stated before, I usually like and appreciate your direct take on issues presented in this forum. They provide some nice balance to the typically more-leftward or idealistic slant of many comments, and I say this as a fairly liberal guy.

I also applaud your courage in jumping into the fray and taking flak from all sides. Your service and pride in your organization should be commended, but, as you point out, you might not be the one to best answer these questions. I think it would be in the CVB’s best interest, therefore, to have someone answering them, lest they fester and resurface in the future in a more virulent manner.

I think many of the questions asked in this thread have been fair, and since this money - although collected from private businesses for a predefined, reserved use - is most definitely public funding for Northfield’s betterment, we should be asking these questions. The City Council should, as our representatives, be asking these questions.

It may be true that it has been ignored for twenty years, but that doesn’t mean it should continue to be ignored. Regarding your comment #20 when you said:

5. I’m not sure if the Chamber makes money on the deal or not.

I would hope not. I can’t imagine that’s the purpose of the tax - to increase the reserves of another organization.

Griff,

Regarding your comment that your complaint is more with the CVB Advisory Board and the City Council, I agree. However, as I pointed out, the CVB Advisory Board is set up by its own policies to have 7 of 9 advisors be Chamber members. It is staffed by Chamber staff. As you stated in your comments before the City Council, there is a distinct lack of separation between the two organizations, making it very difficult to look at one without the other.

As for the City Council, obviously they should be overseeing this matter. Although, as David Koenig pointed out in comment #8, answers to City Council questions about the CVB are not always forthcoming.

I hope that changes, and we are better served by the CVB in the future as a result - no matter what organization is shepherding it.

#23

I think that after ignoring this for 20 years or so, it behooves everyone to go lightly on the outrage and dismay.
It is time, however, to bring the system into line with generally accepted policies.
As usual, Northfield isn’t breaking new ground in this area, so checking out the systems that work in some successful communities should help clear things up rather quickly. Of course, if the point is to continue to beat up on each other, go for it.
Grand Rapids, MN, has an excellent collaboration, a great website and very progressive attitudes. The chamber has its own website, but I believe it has the contract for the CVB. http://www.visitgrandrapids.com/ and http://www.grandmn.com
Duluth is larger, but also has a successful CVB and a successful chamber.
It would seem that the NDDC, northfield.org, the Entertainment Guide, the paper, the colleges, the chamber, the NAG and the city should share in at least advisory board status for a CVB. And there should be a bidding process for running the website/promotions.
I’m sure there are several successful models. Does anyone else have a favorite?

#25

Anne. This subject has by no means been ignored for the last twenty years. However, what has been ignored by the CVB, Chamber and powers-that-be are the many and sundry questioners over these years. And this may continue to be the case if current form in City Hall continues, and is allowed to continue.

#27

David L.,

Pat Vincent and Jeff Hasse are both Chamber board members and that appears to be a violation of the 2004 Policies and Procedures, Section C. Guidelines, which states in subsection 1 that the “CVB Board of Advisors shall be nine (9) and include:”

c) one (1) Northfield Area Chamber of Commerce Board Member appointed by the Northfield Area Chamber of Commerce Board of Directors to serve a one (1) year term;

Plus, Joe Grundhoefer is a recent Chamber board member so that, together with the fact that Kathy as Executive Director of the Chamber is also on the Advisory Board, gives the appearance of an Advisory Board ’stacked’ with Chamber board.

#29

While it appears that many CVB’s are part of the local chambers, in other cities, they’re separate. For example, the Red Wing Visitors & Convention Bureau (VCB) is a totally separate organization from the Red Wing Chamber of Commerce.

The Red Wing Chamber of Commerce staff includes a Member Services Coordinator and an office assistant. 

According to the May 2007 Red Wing city newsletter, the VCB staff “… currently consists of a full-time Executive Director, Kathy Silverthorn, and a handful of part-time employees and volunteers…”

On the Red Wing City Council website, there’s this PDF indicating that the By-Laws for the Red Wing VCB were just revamped in April of this year. It’s interesting that the City appoints one member, the VCB board can appoint up to 6, and the “lodging tax collecting members” can appoint 4. The VCB executive director is a non-voting, ex-officio member.

#31

OK, now you’re hitting close to home with Red Wing comparisons. While you’re digging around Red Wing, and its promotional organizations, check out the “Port Authority” which to the best of my understands functions as an EDA with a budget. http://www.redwingportauthority.org/

#33

Can we elect a mayor on a write in campaign?

#35

When comparing anything with Red Wing, keep in mind that the Prairie Island plant pays incredible amounts into city coffers, city, county and school district, in the form of utility personal property taxes. They rate has been cut dramatically from 4.6% to 2 or 2.1%, and they’ve been hit hard by that, and they’re also now trying to administratively change the assessment methodology, but in short, Red Wing has lots of bucks. Less, but still lots, and that’s why there’s been so much investment in the community. If you’re interested in utility tax, here’s a few posts on it, including one with the Prairie Island taxes all laid out in a spread sheet straight from the tax guy in Goodhue County. http://legalectric.org/weblog/category/utility-personal-property-tax-for-local-governments/
Oh, NEARLY ALL local governments receive utility personal property tax, because it’s tax on generation, transmission and distribution equipment, and most communities don’t have a clue what this means to them, and I think the tax rate cuts are part of why local governments are hurting so much (in addition to the LGA mess). Anyway, Red Wing is a really different animal.
Oh, and Prairie Island Indian Community IS building a hotel expansion, HUGE, and that will have an impact, as it is, they’re pretty much full all the time, although casinos hurt in a recession/depression as much as any other business.

#37

Not a direct benefit, unless city gives them some $$. I was referring to the “Red Wing has garnered national recognition for their amenities” which cost money that many communities may not have. I checked for a IRS 990 and nothing turns up, and they aren’t listed under the RW Chamber (which DOES show “program expenses” unlike Northfield’s, which takes in $$ and does what?). But yes, they wouldn’t benefit DIRECTLY from utility personal property tax, and could benefit indirectly if given money by the City but I can’t find anything on it.

#39

David L.,

You’re entirely welcome for the nice comments. I always respect intelligence, even if I don’t agree with what is being said.

I will clarify what I’ve said about the 7 of 9 CVB Advisory Board members being Chamber members. You dispute that claim in your comment #28:

It would appear that only 2 of the positions are Chamber positions. 2 come from the Mayor and 5 are from the CVB Advisory Board.

This is true in terms of how they are selected, but in the 2004 policies and procedures document that Griff posted, section C (3) states:

Membership in the Northfield Area Chamber of Commerce shall be an eligibility requirement for participation on the CVB Advisory Board except for those persons appointed by the Mayor and City Council.

So it would seem that 7 of 9 have to be Chamber members, as I asserted previously. I didn’t say Chamber Board members, just Chamber members. If Griff, for example, wanted to be on the CVB Advisory Board, he would have to be one of the two people appointed by the Mayor and City Council, since I don’t think he’s a Chamber member.

#41

David L,

I don’t think we agree on your sense about whose money this is.

First, we all have “skin in the game” when it comes to how Northfield is marketed. Retailers stand to benefit the most from money spent in Northfield, but our homes, schools, attractiveness of our town, etc are all affected by how we are marketed and how desireable people find Northfield.

Second, this is public money, not Chamber money. The city government authorizes the tax, paid not by the hotel owners, but by those who lodge there. The hotel owners are among the prime beneficiaries of better marketing of Northfield, but they transfer the tax, they don’t pay it. As a tax established by the City, it is public money.

Third, the Chamber speaks for a small subset of the community and one that has more of a focus on the retail business prosperity of Northfield than on a broader “quality of life”. The City Council is authorized by the voters to be our representatives on such matters in so much as City government decisions affect our quality of life. The Council should have every right to take away the CVB funding from the Chamber, if it chooses to, and to offer it out to others who will be more creative and more effective with the money, should they feel that such would better serve the community.

I was uncomfortable with the CVB/Chamber arrangement when I was on the Council, but it was only one of many things that made me uncomfortable about how we operated as a City. It remains a minor issue, but is an exemplar in terms of the results that governance structures that are substandard provide. So, let’s fix its governance and perhaps you’ll see a better result.

You advocate competition….let the marketers compete for CVB money.

#43

David L -

“… performance is troubling.” I think that is best demonstrated by the IRS 990 of the Chamber, linked above. There was $101k taken in for 2006, and there were ZERO program expenses for CVB. 1) ZERO program expenses. That’s a problem. What exactly are they doing? 2) If the reality is different than that reported to the IRS on the 990, if they are spending money on CVB and not reporting it, then that’s another problem. 3) The money taken in is for this purpose specifically, yet none was spent on that purpose, so is it being spent on something else? Yet another problem.

Carol

#45

David L, as for performance, I cited problems related to the web site in my post. But beyond that, I can’t point to other negatives.

But what’s troubling, is that Kathy couldn’t point to specific measurable accomplishments.

The 2008 Goals aren’t goals at all and I’m assuming that that was the case for previous years.

So when Lansing asked Kathy about yardsticks/measurement, she had nothing to say and argued that performance couldn’t really be measured and then made a vague reference to an increase in requests for mailings and a higher level of lodging (25:45 minute mark of the audio).

#47

Griff: I don’t know if the changes were approved.

Regarding your list of “complaints”, it may be more fair to call them a list of questions. There were several good complaints which the CVB board should consider, regardless of your lack of standing. You also had some good questions (and most of them were questions), which the CVB board could choose to address, if they so wished.

But, it really is not a very productive use of the CVB’s nor Kathy’s time to address every individual who doesn’t understand how the CVB works. It’s not her job, nor anyone else’s to “educate” the public. That’s why I suggested that ignorance was probably a greater factor in the mystery of the CVB, than was secrecy.

The CVB is a weird duck. Having some organization be the fudiciary is not possible under the current documents. However, it would still be a good idea to have some idea of the costs that the CVB pays to the Chamber, and see if the CVB and the Chamber are getting a good deal from the arrangement.

It may be that the Chamber is losing money on the CVB by dedicating too many resources without receiving adequate compensation. You have to remember that if another organization took over the management that they shouldn’t be asking for public funds to support their efforts. Further, their mission should not conflict with the CVB’s purpose. For example, the NDDC has a mission dedicated to the downtown and not the whole city. The Arts Guild, Historical Society, and others have the same problem.

#49

David L writes in #44:

Third, I am not sure why you and Griff think that the performance is “troubling.” What are guys basing this upon, your personal opinion? What are the performance measures that the CVB is failing?

In addition to Carol’s comment (#45), I can cite my own experience. I lived in Rochester for three years before moving to Northfield. I was an East Coaster who was brand new to the area. During those three years, not once did I hear about Northfield in any way.

When I knew we were moving to Northfield, I researched the city (online, as virtually all research is done now). I found the city website, Northfield.org, this website, and a variety of businesses. I never saw a CVB website promoting the town. I also never saw the entertainment guide website.

On visiting in person, I ran across the Chamber. It wasn’t open when I popped in on a Saturday, but their foyer did have some info on Northfield. The only item I remember finding interesting was a street map of the town. I later determined that the pdf map on the city’s website was far superior.

If the CVB is doing its job, shouldn’t this story sound different?

#51

Here’s a question for David Koenig: you have started down a fruitful path with your posts on governance, transparency and accountability. The initial posts were focused on leadership issues. What does good governance look like from the grassroots up?

If we expect elected officials and appointed leaders to embrace the sorts of principles you have described — which seem both reasonable and effective — what are the corollary obligations on citizens? How much self-discipline must we exert in channeling our energy through our elected representatives, as opposed to going directly to whatever point/person/office we perceive to be the source of an annoyance?

Using this CVB thing as an example, you mentioned that you were uncomfortable with the arrangement back when you served on the Council. What inhibited your ability to lead a change? Was there no citizen interest to back you up? Why has this question not resurfaced for so many years?

How does this sort of spontaneous, impassioned public conversation fit in a good governance structure? How do we separate the important public issues from the specific concerns of an individual (or several individual) citizens? Does a series of me-to posts carry the same weight as a vote in an election?

I remember sitting in a congressperson’s office once, being told by the chief of staff that as few as three letters on a given issue was enough to get their attention and motivate action. That was certainly not true for every issue, but the point was that relatively few loud voices could dominate their attention. How does a governance structure insulate the public business from that sort of lobbying?

#53

Randy J,

In post #53, you asked “Using this CVB thing as an example, you mentioned that you were uncomfortable with the arrangement back when you served on the Council. What inhibited your ability to lead a change? Was there no citizen interest to back you up? Why has this question not resurfaced for so many years?”

I must confess that there were so many issues with how the City was being governed at that time, and still now it seems, that this issue was just one among many and not the biggest. Even at my most polite and pursuasive times, though, there was a group of 4 who would vote down any suggestion that I made (like looking to a larger law firm for a new City Attorney). Simple math made it quite difficult to challenge the status quo, even on small items.

My single vote, though, did force the Charter Commission to send its recommendation to move to a City Manager form of government to the public…which the voters (correctly) rejected. That, and being a hard-liner on growth in city expenses were about the only areas in which I was able to have much impact (other than making some people mad at me).

Challenging the status quo is not something people take lightly, especially from “an outsider”, which I believe I was perceived to be as I was very new to town.

#55