Committee Minutes

MINUTES/Finance-Development Standby Committee
Tuesday, March 2, 2003 - 12:00 Noon______________

Members present: Christensen, chair; Hamerlik.

Others present: Council Member Gershman, Rick Duquette, John Schmisek, Keith Lund, Charlie Bunce, Julie Rygg.

1. Matter of CVB funding.
Julie Rygg, executive director, Convention & Visitor Bureau, stated they were asking the City for an increase in their budget for the remainder of this year and into 2004 for $250,000; and can't put anything permanent into place as this would not be a permanent source of funding. She reviewed the plan and budget request for the revenue increase and that a strong focus is sports - can see a benefit from the economic impact of the World Jrs. coming to town, the Grand Forks Hockey Classic coming up, a regional gymnastics tourna-ment and with the facilities we have here, we need to position ourselves in that market, and commented on attending various religious management shows, advertising, equipment (phone system), etc. She reviewed comparison figures re. annual budgets with other cities in our region (Bismarck - $831,000, Fargo - $800,000, Sioux Falls - $720,000 , St. Cloud, $675,000, and Rapid City - $650,000), Grand Forks' budget between $450,000 and $500,000.

Gershman asked what conversations with Alerus Center of leveraging their marketing dollars with CVB's. Ms. Rygg stated when she started with this Alerus provided their marketing plan to her, and is trying with CVB's budget on more of the meeting side through Religious Conf. Mgmt Assn. and Sports Travel, they knew she was putting this together and that any type of advertising that CVB does, Alerus would be consulted for information as well. Gershman stated in looking at the overall picture of advertising dollars in Grand Forks - Airport Authority has marketing dollars; CVB has marketing dollars, Alerus Center, Economic Development Corporation, and Info Center that has some marketing dollars - have the Engelstad Arena, Park District - and if we could find out what all that is and have a way to evolve where people are focusing together on certain things - needs to be coordinated - and asked if could get those numbers to see how much Grand Forks is promoting itself at all those levels and get people together to design a longer plan - that if this request is approved it moves CVB with lot more money temporarily - key is to find permanent solution - that we need to maximize the limited amount of resources. Ms. Rygg stated what she is submitting, trying to cover areas that aren't being covered in sales and marketing efforts but does need to be more coordination - Ralph Engelstad Arena is going to be doing extensive advertising for the World Jrs. and CVB won't do what they are doing, and they are part of that committee and group and are working towards more partnerships with these organizations; and that she can get that information on amount of marketing dollars.

Ms. Rygg stated that they are not involved with any of the organizations, etc. listed in the plan. Hamerlik stated a good share is with attending conferences, training and marketing, how much money is CVB now spending at these kinds of thing. Ms. Rygg stated on travel and trade show their projected budget for 2003 is $16,000, only couple small meetings, trade shows they are attending, budget includes cost to travel etc. Hamerlik he heard that we don't land some things because we don't have the buy downs, and sees $50,000 with some flexibility with both REA and the Alerus. Ms. Rygg stated part of it is bringing these people to town to come to see what we have, and need to be able to pick up those costs to get those people here and that's part of the sales process. - to bring in meeting planners to do familiarization tours of the community and our facilities, half battle is getting people here showing them what we have.

Hamerlik asked where is Board with a more permanent source of funding; Ms. Rygg stated they have backed off of that at this point and have not pursued - that they need a permanent source of increased funding and that is something they need to continue to pursue.

Hamerlik stated that they were backing off of local memberships, and asked if most businesses build a budget based on that and a letter out to them to collect bulk of it. Ms. Rygg stated it collects $20,000 annually, to make a membership program would be much more costly than the $20,000 they receive because having to take sales people to sell those memberships, going to have to increase their program then they become in competition with other membership organizations that are here creating these programs for the local businesses. Hamerlik stated to drop it and lose $20,000 is little tough. Ms. Rygg stated expenses are minimal because actively not selling that program, send out annual membership letter and they renew but need to become more active with it because if want to represent all of those communities, there are members that should be there that are not. Christensen stated send it out and see how many get back.

Christensen stated when comparing to other cities in region, how many religious conferences have been scheduled in those towns in the last three years, and asked how many AAU (Amateur Athletic Union) sponsored events have been scheduled in Fargo, Bismarck, etc. and curious if there is a venue in our region for those things. He stated that this is short-term fix for an on-going long term problem, once we start, hard to go back and if raise the level from $500,000 to $750,000, easy to consume because you have it - this money would come out of Fund 2163; Mr. Schmisek stated if approved fund balance at $420,000. Ms. Rygg stated this being temporary is part of the concern because you can attend a trade show and not book something off of it the first year, many times takes 2 or 3 times and could have a year where attend and do advertising and then have to stop, that would be very detrimental to them because creating that presence and then stop. Gershman stated he does an extensive amount of advertising and that he can' tell that it's going to be effective and need to do some testing - and when do advertising and promotions is consistency.

Gershman stated two events in the last two weeks, one was billiard tournament with 800 people, and last week there was a dart convention in Fargo - 1200 people, and asked if CVB involvement in that; Ms. Rygg stated that was bid out couple years ago and involved through planning stages - did media work for them, did welcome signs, banners, sponsor-ship, hospitality packets, table set up during their event to welcome their attendees. Hamerlik stated there were approx. 1,000 participants out there, started on Friday and finished Sunday afternoon.

Christensen asked how many religious conventions have been scheduled in this area and what is the payback for advertising in Sports Travel magazine, etc., that CVB is independent organization and web redesign and maintenance, and wondering if that couldn't be integrated with the City's IS department.

Mr. Duquette stated he has listing of conventions of religious events in 2003: March 14-16 Faith Evangelical Free Church Youth District, 600 attendees at Alerus; April 24-26 Mn. North District Lutheran Missouri group, 500 people at Alerus Center; May 1-3 Eastern ND Lutheran group, 700 attendees at the Alerus Center; June 22-23 ND Lutheran Church Missouri Synod 300 attendees. and this is partial list of things going on - and brief time he was involved with the city auditorium there was enormous amount of time and money spent by them to come into that small auditorium to have events. Ms. Rygg stated she spoke to the people at the Alerus Center re. that and putting plan together and is this an area that you would find beneficial - and received a strong yes because of these upcoming conferences; and when attend these on a national level you're not promoting to the national association, as national assns. have smaller regional assns.

Christensen stated they are talking about a 50% increase in revenues and don't know how do that will all the other wants that exist, and asked if they were to give them $150,000 what would be cut; Rygg suggested membership; cushion for additional opportunities; cut some of the Canadian advertising - need to be attending shows and advertising in publications; and recommend not cutting any of it.

Gershman stated one of the reasons Grand Forks' hotels are suffering that the mid-week business is horrendous, weekends are pretty good - there is nothing coming and assessor may be doing some re-assessing of the hotels in Grand Forks because of the market condition over the long period of time.

Christensen stated Gershman's suggestion good when saying it would be nice to know how much is being spent by everybody for advertising and then have some coordination - doesn't know where the next $250,000 is going to come from except 2163 and lot of other areas of community that require promotion. He stated they asked at one time that the Alerus and CVB work together and thinks that is happening, doesn't know how much they have in their budget ($239,000) and that $1 million with those two entities if we approve this request, and shouldn't there be some melding here and maybe should think about this and maybe require consolidated marketing effort between CVB and Alerus. Gershman stated what we need to do concurrently is figure out a way to get in some permanence into next year's budget; Gershman stated that with Ms. Rygg and others need to do the planning to start to consolidate to see how we can work together to promote.

Hamerlik asked how Ms. Rygg in her role can go to the Alerus, Park District or REA and ask for information - Gershman stated with Affordable Housing, that he and Mr. Kreun are chairing that, and they invited people and other day had 40 people (bankers, realtors, builders, landowners, policy makers, etc.) and started conversation and now developers who are seeing how we can make it work and another meeting this afternoon - but just having the conversation and if got everyone to the room and said $223,000, $750,000 and Airport has at least $35,000 and added it up and asked if we are doing the best with this - get the conversation going if have people who are truly interested in promoting the city and thinks we do and need first meeting rather than developing a plan and bringing those people in - and everybody going to have better ideas. Christensen stated we can control the Alerus Commission and CVB - and have some control over Airport Authority, EDC and redirect that money and same with Airport Authority - knows there's turf but more concerned about consolidating. Ms. Rygg stated she would certainly welcome meeting with them, and the Alerus and CVB are working closer and closer together - that their sales staff are going on sales calls together at the end of March, and Alerus has share with her their marketing plan. Christensen stated that Mr. Gershman brought the fact that there's a lot of money spent to market the community and his understanding and intention on working on Board membership to have a focal point to market the community and hopes that it evolves into the CVB.
Mr. Schmisek reported in Fund 2163 there is $670,000 in contingency line item and nothing has been used for that this year and that is area to be used for these things and also for economic development project, and if use $250,000 here, $420,000 left in there. He stated in this fund they had projected about $1.3 million carry over coming in but also projected to expend that because they budget all the money in case there are deals to be made. He stated they have $160,000 that was budgeted for a couple years for the special event services and not using anywhere near that, and there's anywhere from $120,000 to $140,000 of that money that we can free up, and can transfer what's left in that line item and easily $100,000 available. Christensen stated that whatever we do this year is going to be there next year and for the next two years - and we do not know if there would be an election where we'd raise the sale tax - when started this came up asked for 1% tax increase on restaurants to fund this, and its coming up with a source going forward because we will have depleted our economic development funds unless certain things give way, like the arts, events, etc. Ms. Rygg stated they need to investigate further the additional 1% lodging tax that is being collected in Grand Forks to pay the bonds on the building - it was noted that doesn't come off until 2007.

Hamerlik recommended $250,000 for one year from passage and include conditions for long term planning and suggestion in finding out what is available in the community and have that back in time to make the necessary adjustments. Christensen suggested going with $225,000 because there's no real reason to discontinue membership programming, send out letters and not chase it, and then seconded the motion. Motion carried.

2. Matter of using buses for moving people from hotels to Alerus.
Chairman Christensen asked what they need to get done to help with buses, and would like a plan as to how the City can give you buses. Christensen stated that until we get a hotel, when we get a hotel, that they will need something to get the people back and forth from the Holiday Inn and Ramada, etc. and have to get that going now. Hamerlik stated that Todd Feland and Roger Foster have been working on this and there are some problems because of the funding of some of the buses - at one time some of the hotel owners were willing to put in some money to do it and need to get that group together and get it done. Christensen asked Mr. Duquette to work with Ms. Rygg ad Roger Foster and have a meeting in the next 7 days just to see what the issues are. as need to get those buses moving back and forth when we have events here.

The meeting adjourned.

Alice Fontaine
City Clerk