Board members want openness in Visit Duluth hiring plansLast year, a task force criticized Visit Duluth for what it called inadequate financial controls, and the organization responded by agreeing to additional fiscal oversights.
By: Peter Passi, Duluth News Tribune
Last year, a task force criticized Visit Duluth for what it called inadequate financial controls, and the organization responded by agreeing to additional fiscal oversights.
But Visit Duluth’s practices are attracting renewed scrutiny as executive board members last week learned about a local promoter hired to assist with the 2013 Tall Ships Festival without a contract and without a competitive hiring process.
Craig Samborski has been working as an independent contractor to promote the festival and to solicit sponsors for the event since November, according to Terry Mattson, president and CEO of Visit Duluth.
Visit Duluth has been paying Craig Samborski $3,500 per month. Mattson said Samborski has worked not only on the tall ships event but also has provided grant-writing and online marketing services.
Samborski has provided promotion and oversight for a previous tall ships event in 2010 and has helped Visit Duluth in a number of capacities in recent years. In his latest assignment, Samborski has so far earned $31,500, and is on pace to collect $70,000 in total compensation by the time of next July’s tall ships event.
Yet Visit Duluth never engaged in any competitive selection process before hiring him as a promoter. The organization issued neither a request for proposals nor a request for qualifications, Mattson said.
Though Mattson said Samborski worked under a written contract for the 2010 Tall Ships Festival, no contract has been drawn up for the 2013 event.
“We hadn’t gotten to that this time around,” Mattson said. “We’ve had a lot on our plates.”
Mattson said there were several structural changes in the organization and a recent marketing effort to assure would-be tourists that Duluth is “open for business” despite the June floods that garnered national headlines.
Samborski said he wasn’t concerned about working with Visit Duluth without a contract, noting that he’s done that before with other clients.
“Working with Terry, as I have in the past, we have a tacit trust. I felt comfortable, but I understand the push to formalize the agreement, which I think is a good thing,” he said. “If I were working with a new client, I probably would have been more concerned. Visit Duluth has been extremely trustworthy.”
Out of the loop
David Montgomery, Duluth’s chief administrative officer and a member of Visit Duluth’s recently restructured board of directors, said he was concerned with the lack of a formal contract with Samborski.
“I was not aware of this arrangement, and I don’t think the board as a whole was really aware,” he said.
Duluth City Council President Dan Hartman also serves on Visit Duluth and said: “As a board member, this was never brought to my attention.”
Hartman said he would have liked to have known about the agreement with Samborski and would have preferred to have considered other promoters before hiring anyone.
“I’m generally always the one pushing for more RFPs and RFQs,” Hartman said. “I tend to think it’s better to have a competitive bid process.”
Linda Krug, a Duluth city councilor who served on the task force that recommended changes at Visit Duluth last year, said she was disappointed Mattson didn’t involve his board of directors to a greater extent.
“As an executive director, Terry should have some latitude,” she said, “but it’s cleaner and more transparent and you make better decisions when your board is on board.”
“Change is hard, but I would have hoped something like this would go to the board,” Krug said. “Visit Duluth is a great organization, and it does great things for the city. I want it to be around and continue. But if you’re spending $70,000, your board ought to know about it.”
Karen Pionk, chairwoman of Visit Duluth’s board of directors, said the organization is in transition and is re-examining many of its past practices. Because of the period of change, she didn’t fault Mattson.
“There’s really not anyone to blame so much as a lot of years of past practice to blame,” Pionk said.
In keeping with task force recommendations, Pionk said the size of Visit Duluth’s board of directors has been reduced from 25 to 18 members.
Montgomery pointed out that Visit Duluth recently restructured in an effort to improve its public accountability.
“That’s the reason we reconfigured the board, so we could address issues in a way that instills confidence, because tax dollars are Visit Duluth’s primary source of funding, and we want the public to have confidence that money is being spent appropriately,“ Montgomery said.
In all, Visit Duluth will receive $1.6 million from the proceeds of a local tourist tax this year, which is derived from taxes on hotel room rentals and restaurant food and beverage sales.
But Mattson pointed out that the tall ships festival does not rely exclusively on tax dollars for its funding. He noted that Samborski has been selling sponsorships that will provide about $65,000 of support. And gate revenues from the event should easily exceed $200,000, he said.
If the board desires, Mattson said he would gladly draw up a formalized written contract for its review.
“As president and CEO, I’m open to going through that process. But whether we are hiring an independent contractor or a new employee, those have been management decisions,” he said.
Mattson said funding for Samborski’s position was included in Visit Duluth’s special events budget, which had already been reviewed and approved by the board.
But Montgomery said the expense in the context of Visit Duluth’s total budget drew little notice from most board members and, to his knowledge, was never called out.
Visit Duluth requires that any expenditure of $25,000 or more be approved by its board of directors, but the monthly $3,500 checks paid to Samborski fell well below that threshold.
Montgomery contends that a long-term financial obligation — such as Visit Duluth’s agreement to pay Samborski’s fees as a promoter for the Tall Ships Festival — is generally best reviewed as an aggregate versus a monthly expense.
Pionk said Visit Duluth welcomes scrutiny of its operations, and the board is willing to consider adopting new policies.
“If something could be subject to questions, let’s fix it,” she said.
The amount of compensation being provided to Samborski doesn’t seem out of line for the promoter of an event as large and complex as Duluth’s Tall Ships Festival, said Ken Buehler, vice chairman of Visit Duluth’s board of directors.
As executive director of the Lake Superior Railroad Museum, Buehler noted that his organization recently paid $18,000, plus expenses, for a promoter to oversee its recent Thomas the Tank Engine visit. That event drew nearly 11,500 people this year and proved profitable for the museum, Buehler said. He said that in his experience, hiring an experienced promoter has offered a good return on investment.
Mattson said he believes the 2013 Tall Ships Festival (July 24-30), featuring at least 10 vessels, will be an unrivaled attraction.
“By far, this will be the biggest event that Northeast Minnesota has ever seen,” he predicted.
Mattson said he expects the ships to draw more than 100,000 people and noted the estimated economic impact has been pegged at about $15 million.
Mattson predicts Samborski’s unique experience putting together tall ship festivals in Duluth will serve Visit Duluth well.
“Craig has a great track record with these kinds of event,” he said.
Mattson said preparing for the festival requires orchestration of ships, vendors, security, medical care and entertainment, not to mention contingency planning for foul weather.
After the 2010 Tall Ships Festival, Samborski was invited to speak on what it takes to put together such an event at a January gathering in Newport, R.I.
“Not to sound egotistical, but after 2010, Duluth almost became the poster child of how to do a tall ships event.”
Positive word of mouth has led to other gigs for Samborski. In addition to the Duluth festival, Samborski also is putting together a 15-ship event commemorating the War of 1812 on Lake Erie at Put-in-Bay, Ohio, next year.