The Albert Lea/Freeborn County Convention and Visitors Bureau needs money fast, but found the city council reluctant to authorize emergency funds before it addresses long-term budget problems.

Tuesday, April 10, 2001

The Albert Lea/Freeborn County Convention and Visitors Bureau needs money fast, but found the city council reluctant to authorize emergency funds before it addresses long-term budget problems.

&uot;As of last Friday, April 6, the CVB literally had to close its operation due to lack of funding,&uot; President Don Malinsky told the council Monday. &uot;The CVB was essentially out of business.&uot;

Malinsky asked the council for more than $29,000 in excess lodging tax money held by the city last year when the tax generated more revenue than anticipated.

Malinsky said the CVB had to get a loan last week just to make their payroll. To continue operating, money is needed as quickly as possible, he said.

The CVB’s goal is to promote Freeborn County to potential visitors.

The excess lodging tax, a 3 percent tax on hotel and motel rooms, is levied by the city to raise money for tourism promotion. Most of it, 95 percent by state law, is used for funding city, chamber and CVB activities, said City Manager Paul Sparks.

CVB Executive Director Jim Pilgrim said the tax is the main source of funding for his organization, not only for operational expenses but also for purchasing advertising and other projects. The city issues the money to the CVB in monthly checks. It relies on the tax for everything from paying the bills to getting projects off the ground, Pilgrim said.

According to Sparks, the CVB had a surplus in excess of about $35,000 less than a year ago. He asked Malinsky what happened to the surplus. Malinsky told the council the surplus was used for day-to-day operation of the CVB when the city withheld two lodging tax payments last year.

But Sparks said the organization is chronically running over budget.

&uot;Over the last 16 months, your expenditures have exceeded your revenues,&uot; Sparks said. &uot;Even if we give you the excess money, you will run out of money and end up back here in 12 months.&uot;

In addition to the budget problems, Sparks said the city hasn’t received the monthly activity reports outlining projects with their costs. The reports are required by the CVB’s contract with the city, Sparks said.

&uot;The monthly reports are what we’re looking for,&uot; Sparks said.

Pilgrim promised the expenditure reports by this morning, saying he wanted to open a better line of communication with the city. He acknowledged the city for making its 2001 payments to the CVB, but said the lodging tax money hasn’t been sufficient.

Pilgrim said the CVB’s promotional expenses are usually higher the first few months of the year as the tourist season approaches.

Sparks said he also noticed the lodging tax revenue is down, but said the winter months never generate as much. He told Pilgrim the April lodging tax payment of $8,900 would be issued Tuesday.

Haukoos said he planned to appoint someone from the city to attend CVB meetings to keep him updated and help improve communication.

The council arranged to meet this week with CVB representatives to iron out budget needs and clarify contractual obligations.