• 12Jun

    Today I will propose a change to how the City of Rochester oversees $7 million dollars in support for outside agencies. I am frustrated with the status quo and am pursuing corrective action.

    The memo that I prepared for the council can be found here.

    Recent events have shown a persistent weakness in our oversight of public funds. This proposal would create professional oversight and decrease the influence of political connections in the allocation of public funds. I view this as a needed step to restore public faith in our management public funds going to partner organizations. While not every organizations has had issues, every taxpayer dollar deserves meaningful public oversight.

    Here is the approximate amount of taxpayer funds being issued to outside organizations in 2017.

     photo 2017 City Outside Contributions_zps10d0huev.jpg

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  • 28Feb

    We don’t know because staff is not doing as directed.

    My intention is to stop all activity and funding aimed at building new stadiums in Rochester. This types of exchanges are why in 2017, I will seek to have public oversight of the RCVB, their budget, and expenditures. The amount of money they are spending without oversight is well into the millions.

    Even though the city council explicitly directed staff to gather information on how much money the RCVB has spend on stadium consultants. Here is a series of notes.

    At a recent Council meeting a request was made to seek information from the RCVB on expenditures and staff hours that they might be undertaking relating to any “arena” proposals.  I previously contacted Brad Jones of the RCVB and  received the attached response and information.  It is provided for your information pursuant to the request made at the February 6 Council meeting for information from the RCVB.

    Thanks

    Gary

    FYI, this was not a “request” it was an official action of the Rochester City Council.

    Hi Gary,

    Thanks for the email and information – great to hear on the bond election allowing the collection of naming rights and sponsorship revenue in the future.

    In terms of the update to City Council – we are in process of the work to provide a recommendation for a possible new entertainment, sports and multi-purpose arena. In our planning timeline, we are poised to bring the recommendation to the Mayo Civic Center Commission sometime in May or June depending on the progress of work. We are working with two separate consultants, an investment group, and three possible long-term arena tenants. If you would rather have the recommendation come direct to the City Council please advise.

    In terms of staff time – I am the only staff member at the RCVB currently working on the arena project. I am coordinating all of the partners, consultants and work. We are doing this to insure that our normal work flow and responsibilities are not affected. On average, I attribute around 15 hours a week (or about 30% of my ongoing time from my own schedule for this work). If you have any further questions please let me know.

    Thanks,

    BRAD JONES// Executive Director

    Rochester MN Convention and Visitors Bureau

    This response did not provide the data we need. Here is my response today.

    We directed staff by way of a motion, I would like to see the dollars spent on Hammas and other. There is no need for a second motion. Staff has their direction. Proceed with the direction you were given. Please no more delays.

     

     

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  • 25Jun

    Breweries, Food Trucks, soon Uber, and now Airbnb…

    Here is a series of note regarding Airbnb in the city. I am comfortable sharing as none of this was marked attorney-client privilege so these are probably public anyway. It has been going on for some time and probably contributes to a scarcity of affordable housing options. I don’t really have an opinion on this since I am not sure what the city is legally authorized to do.

    If we are going to have Airbnb here, we need some language to ensure that people are getting safe, sanitary housing, I don’t think that is currently always happening.

    Letter of concern from Serenity House

    Mayor/Council: There have been complaints about the number of Airbnb rentals that are occurring in the city. This is for your information. Steve

    From Randy Johnson:
    From: Johnson, Randy
    Sent: Thursday, June 23, 2016 12:45 PM
    To: Adkins, Terry <tadkins@rochestermn.gov>
    Cc: Alfredson, Pat <palfredson@rochestermn.gov>; Kvenvold, Steve <skvenvold@rochestermn.gov>
    Subject: RE: Serenity House Network concerns regarding Airbnb

    Hello Terry,

    It is my opinion that Mr. Brad Jones comments are not completely accurate.

    I was involved in a meeting on May 16, 2016, with Brad Jones, Dawn Beck from Olmsted County Public Health, and David Dunn from the Planning Department. (I never met with Mr. Jones and Pete Giesen to discuss this issue). During this meeting we discussed the various housing and lodging situations and the roles and responsibilities of each of the various departments. I explained that the Building Safety Department is responsible for the administration and enforcement of the Rental Housing Licensing program which is geared toward housing where the occupants are primarily permanent in nature and are not considered transient (less than 30 days). Dawn Beck explained that Olmsted County Public Health mainly deals with lodging facilities where the occupants are transient in nature. David Dunn explained that the Planning Department enforces the Land Development Manual which contains regulations where these various housing and lodging situations may exist within the given zoning district.

    The main discussion surrounding the Airbnb facilities is the fact that these tend to fall between the cracks and currently there does not appear to be any enforcement process available other than possibly the Planning Department and this depends on whether or not this a permitted use within the zoning district. I indicated that the Building Safety Department does not have any enforcement authority because these are transient in nature and it is my understanding that these are usually rented out by the day or week. Dawn Beck indicated that even though these are transient in nature, her department does not have any enforcement authority because State Statute does not allow them to issue a lodging license for a facility with less than 5 bedrooms with the exception of the new Medical Lodging Facilities. She also indicated that even though some of these Airbnb facilities may advertise and be used as Medical Lodging Facility, they usually do not fall into the definition of being used “exclusively” as a Medical Lodging Facility.

    I am not really sure how Mr. Jones can make the statement that “there are clear violations” because you need to be able to point to a specific ordinance, statute or law to make the declaration that a violation exists. We were not able to come up with any during our meeting so it seems strange that he walked away with the understanding that these are clear violations. It is also my understanding that after our meeting that Mr. Jones has met with various lodging groups and has informed them that it is my responsibility for the enforcement of these Airbnb facilities and that these exist because if my lack of enforcement.

    It is my option that if the City wishes to somehow regulation these type of facilities that the City will need to lobby the State to create a new regulation or create an ordinance themselves. Along with this comes the question as to the purpose of the regulation. Is the desire to band them or to allow them to exist and regulate them. I believe Mr. Jones and Jodie Hook from the Serenity House Network are interested in banning them because it takes away from their interests. It is my understanding that the City of Duluth tried to regulate these type of facilities and they are still trying to recover from this attempt.

    Hope this helps and please let me know if you have any further questions or concerns.

    Thank you
    Randy

    —–Original Message—–
    From: Adkins, Terry
    Sent: Wednesday, June 22, 2016 1:43 PM
    To: Johnson, Randy <RJohnson@rochestermn.gov>
    Cc: Alfredson, Pat <palfredson@rochestermn.gov>; Kvenvold, Steve <skvenvold@rochestermn.gov>
    Subject: FW: Serenity House Network concerns regarding Airbnb

    Randy, could you help me understand the status of Airbnb from the perspective of the City’s Rental Code. The message below from Brad Jones indicates he met with you and Pete Giesen, that there are clear violations, and there is a need for joint city/county enforcement against the violators. Yet, in her April 1, 2016, memo to me, the Mayor, and the Council, Assistant City Attorney Pat Alfredson indicated she met with you regarding this subject and you indicated the following:

    “Randy Johnson, Director of Building Safety, is aware that short term rental activity is occurring in the community. Mr. Johnson stated the facilities are usually being rented out by the day or by the week, therefore, he does not believe a rental registration certificate is required. He explained that regulations address properties that are rented out on a more permanent basis; usually 30 days or more. It was his opinion that rental for anything less than 30 days is usually considered a lodging facility and would involve the Health Department.”

    I just need some clarification as to where you stand on this issue and whether Brad Jones’ message is indeed accurate.

    Thank you,

    Terry

    —–Original Message—–
    From: Kvenvold, Steve
    Sent: Wednesday, June 22, 2016 1:15 PM
    To: Adkins, Terry <tadkins@rochestermn.gov>
    Subject: FW: Serenity House Network concerns regarding Airbnb

    Terry, you may be asked about how to go about enforcing the matter addressed below. Steve

    —–Original Message—–
    From: Brad Jones [mailto:bjonesmn@rochestercvb.org]
    Sent: Wednesday, June 22, 2016 1:10 PM
    To: Brede, Ardell <abrede@rochestermn.gov>; Kvenvold, Steve <skvenvold@rochestermn.gov>; Staver, Randy <rstaver@rochestermn.gov>
    Cc: Clarke, Lisa M. <Clarke.Lisa@mayo.edu>; Rob Miller <RMiller@rochestermnchamber.com>
    Subject: FW: Serenity House Network concerns regarding Airbnb

    Thanks Mayor,

    I am hearing this complaint almost every day now from our business community. We are preparing a ‘Traveler Warning’ that we will post on our website and we will request that Mayo Clinic, the Chamber & The City post it on theirs as well. That warning will inform visitors that we highly recommend booking accommodations who have a lodging license (as you know we only list those on the website). I believe that is a good start to informing our visitors that we have a process for licensing and inspecting properties to ensure their safety, sanitation, proper insurance etc.

    These are clear violations and need to be addressed. Otherwise, the issue will only get bigger. We have met with Randy Johnson & Pete Giesen regarding this and the need for enforcement. I have a printout of most of the properties that are in violation.
    My suggestion is that we send a joint (City & County) letter to these non-licensed properties pointing out the violation. If they wish to do this business, we have a simple process and inspection to become licensed.

    I’m not sure what the penalty is for this violation? BTW…I have several other nightmare stories that I could share. This is why we all worked so hard for the lodging licensure and zoning changes last year.

    Thanks,
    BRAD JONES // Executive Director
    Rochester MN Convention and Visitors Bureau
    (D) 507.424.0821 // bjones@rochestercvb.org

    Have you heard? Rochester, Minnesota is in the midst of a $84 million expansion to the Mayo Civic Center #Opening2017.

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  • 29Jan

    Goal: Address Rochester Convention and Visitors Bureau

    Grade: B

    Comments: To quote Tom Petty, “You can stand me up at the gates of hell, but I won’t back down.” Read more…

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  • 07Mar

    In this environment where all city employees are sacrificing for the good of the community, I am disappointed that certain organizations are above sharing in that sacrifice or even above oversight for that matter. I won’t temper my words when I say the City Council and City Administration have failed miserably in its oversight of the Rochester Convention and Visitors Bureau (RCVB). The purpose of this note is to specifically point out where we have failed and problems that have arisen, and what we should do to address these issues. I believe the RCVB has done many good things for the community however, I don’t believe this makes them immune to oversight or fiscal responsibility. If we are to go forward with an expanded Mayo Civic Center (MCC), I need to be able, in good faith, to tell our citizens that we have a well run organization. To achieve this, the issues below must be addressed.

    Issue 1: City Administration has failed to enforce the City-RCVB contract

    In the 11 months that I have been on the City Council, the RCVB has failed to honor the contract with the City dated 12/11/2007. As highlighted in the following points, clearly we need to enforce the contract and provide some taxpayer oversight.

    Section 2A: The current financial arrangement does not incent the RCVB to prioritize booking the MCC over some other site.

    Section 3: The contract specifies that a member of the city council should be on the board, however Brad Jones indicated that this is the City Council President, which runs contrary to the guidance set forth in the City Charter for council appointments. Further, we have not been offered the ability to review the make-up of that group. Because this is a self-appointing group, our ability to ensure the board has the interest of the whole community in mind, and not a few special interests is key.

    Section 4: We should have received the 2010 RCVB  budget by August 1, 2009.  We did not. We also must approve this budget. We have not. The RCVB does not have the authority under this contract to spend City money in 2010 until we approve their budget. That said, I seriously doubt the City Council approved their budget in 2009 either. Note this power was denied when Brad Jones came before us. At the end of the day, the City Council is in complete control of the RCVB according to this contract.

    Section 5E: I do not believe the RCVB is sufficiently inegrating their mission with that of the MCC.

    Section 6-A, B, E1-E8, F: I suspect many, if not all of these, are not being done, but this would be for the City Administrator to determine.

    Issue 2: The City of Rochester is not providing sufficient oversight of the RCVB.

    At this point we are in the situation where the fox is guarding the hen house. Essentially, we have abdicated our budget and board of directors oversight. Even City Council representation is not being done in compliance with the City Charter. We have created a dynamic where there is a self appointing board with no real oversight. This may or may not have an interest in using some of their funding to provide subsidy in the operations of MCC where as that may be the appropriate decision for the city. Any board member with a self interest in the hospitality industry would have no incentive other than to spend the full sum of the allocated monies regardless of the return on that investment. As such, there needs to be some oversight and attention to the appointees on the board however, we have failed to do both.

    Issue 3: The current funding structure does not align RCVB interests with the interests of the City.

    We as a city should not operate under the assumption that the way we have always funded things is good enough for the future. There was a belief when LGA was cut, some groups would be immune to the pain. I don’t believe that should be true however, our proposed budget does just that. We as a city fund both the MCC and the RCVB however, we expect the MCC to comply with City funding constraints while the RCVB has no such expectation.

    Currently and RCVB board member that owns or manages a hotel would have an incentive to have a small convention hosted at their hotel. This decision may hurt our citizens if that event could have been held at the MCC. The net result would be that the MCC would see a decrease in revenue that directly translates to an increase in taxpayer assistance to the MCC. This is a fundamental issue because we artificially take money from different pots for these different organizations. We have made a conscious decision to not reward or punish the RCVB budget based on the success of the MCC. Financial incentives are the strongest form of incentives and I don’t think we can continue with the current disconnect between these to entities. The budget of the RCVB needs to be tied to the budget of the MCC.

    Issue 4: Without oversight, the RCVB has operated as a rogue element. The director of the RCVB knowingly provided false information to the City of Rochester during budget reviews.

    I will be clear that as I have investigated this matter, I find the information below to be particularily infuriating. I had been provided some information as to what might be going on from a source that I will continue to keep anonymous. Based on what I heard, I made a request to local legislators for information exchanges between themselves and the RCVB. The note below was a response to my inquiry to one of the legislators. I am including the entire note below and will identify four issues I have with this note.

    1) False Statement: The City of Rochester took no position on this bill. Further, if we had, I suspect we would not have made a decision that, in theory, would not be in our best interest. I did confirm with the City Administrator that no such policy exists.

    2) Contradiction: I had a number of questions for Mr. Jones at the COW meeting, but essentially stopped my questioning when it became clear we were not going to receive truthful answers. If you recall, I specifically asked if he had indicated the City opposed HR 2077. He lied and stated he had not. The note below offers the needed evidence that Mr. Jones knowingly lied to us. When I stated, “I stand corrected”, I knew I was being lied to, but decided not to proceed. I had a number of additional questions, but decided it would not be fruitful to proceed.

    3) Thinly veiled threat: When we pay 100% of a salary, I don’t think it is appropriate to make political threats and, at the same time, misrepresenting the position of the City. I think everyone with a pulse understands the meaning of the following: “ I don’t think that you (or any of us) want to wage this battle in your own district if it becomes more public.” Completely unacceptable.

    4) Policy Recommendation: I also take exception to the notion that Mr. Jones is in a place to be offering policy recomendations behind the back of the City. In this note, Mr. Jones suggests we raise local sales taxes if we have funding concerns. Regardless of how I feel about this, he is completely out of line in having this discussion. If Mr. Jones is interested in setting public policy, I suggest he should run for office, or at least discuss his ideas with those of us that do set policy.

    *********************************************BEGIN NOTE*****************************************************

    From: “Jones, Brad” <bjones@rochestercvb.org>
    To: “Tina Liebling” <
    rep.tina.liebling@house.mn>
    Date: Wed, 8 Apr 2009 15:35:39 -0500
    Subject: HF 2077 Lodging Tax

    Good Afternoon Rep Leibling,

    To say the least, your comments yesterday regarding HF 2077 section #4 were extremely disheartening when you said that you “do not like the idea of dedicated lodging taxes that must be spent in one certain way (tourism) whether it is spent well or poorly. We cannot afford to have dollars spent without knowing the outcome. And that you applaud Chair Lenczewski!” In other words you do not support dedicated funding to the CVB but rather would like to see the funds go directly to the Cities to use as they see fit.

    At Monday’s Government affairs committee the City of Rochester and Mayo Clinic both made it known that they oppose section #4 of HF 2077, not to mention the many business owners and workers in Rochester’s Hospitality Industry.

    I thank you for your continued hard work but I would encourage you to take a second look at this issue and how it would affect your district and the State of Minnesota, I don’t think that you (or any of us) want to wage this battle in your own district if it becomes more public.

    Most everyone who attended was extremely frustrated at Chair Lenczewski and the committee. The hearing began at 10:30AM, our bill was number 8 on the list, however the Chair did not take them in order. The committee broke at 12 to go to the floor for a session. They reconvened at 2PM in another room, Representative Lenczewski introduced her bill around 4PM then took another break to move to another room. Public testimony for HF2077 started around 4:45PM and by that time as you know half of the tax committee members were already gone.  The impression that everyone walked away with after public testimony was that the most of the committee members there simply did not care about what was said.

    Comments from Chair Lenczewski were also very disheartening: Although I agree that these are difficult times and the committee is attempting to give cities some flexibility to help them fill their budget deficits. She does not understand how our industry works and simply is wrong when she states that The dedicated hotel lodging tax money (which is paid by visitors) should be used for services for local individuals over visitors. She acknowledged that she had received a lot of emails on this issue as she was sure other committee members had but stated that cities COULD use the money. If they are happy with the services their CVB’s provide then they also can choose NOT to use that money.

    A major question that Chair Lenczewski seems to elude very well is: Why should hotels have to pay more than other businesses in a community to fund local services? This is an unfair tax on the service sector and in her own words a blatant money grab for local governments. Let’s just allow them to raise the local option sales tax if they so choose – which the chair is opposed to. Interesting train of thought.

    Brad M. Jones, Executive Director, Rochester Convention and Visitors Bureau

    ****************************************END NOTE*********************************************

    Issue 5: The RCVB spending is out of control.

    As I pointed out in the budget hearing, the growth at the RCVB far exceeds that of the City. While we have struggled with our own funding, we have ignored this organization that drinks from the same well. I have any number of facts that I am willing and able to share. If you remember only one thing, it  is if the City was to have grown at the same rate as the RCVB (since 2001) we would have to increase property taxes by 67%.

    At the same time, about a half million has been paid out in employee  bonuses since 2001. I question the structure of these bonuses (based on projections vs. actual) as well as the notion that one City organization would be paying out bonuses while we issue furlough days and pay freezes to other organizations.

    I have heard some wild claims of economic impact, but wanted to share with you a reality. By Brad Jones’ own numbers, we have moved from 50,000 room night stays to 100,000. Let’s just assume that each stay translates to $100 for hotel and $100 in other spending per day. In this case our $735,000 direct investment in 2001 yielded about $225,000 in direct local tax revenue. In 2009, our $1,750,000 yielded $450,000 based on 100,000 nights. All of this while the MCC still requires a huge subsity. To be clear, this is good for our lodging industry however, the fact we have prioritized these funds over everything else is unwise. I also wonder how many of those 100,000 nights would we have regardless.

    One thing I understand about the nature of groups is any group will spend all of the funds at their disposal. Thus, in order to prevent waste, we need strong oversight. We have an epic failure in that regard.

    Proposed Solutions

    Take corrective budgetary action: The RCVB budget requires council approval, we should only approve it if it has been reviewed and is in line with the sacrifices of other groups. I would suggest we add the MCC operating subsidy as a line item in the RCVB budget. This amount would bring their budget growth approximately in line with the growth of the city.  I think this would also set a precedent of limiting our spending on convention/event related activities to 2% of Hotel/Motel revenues. Remember that 2/3 of this revenue is Mayo related.

    Board of Oversight: We need real oversight, not pretend oversight. I propose we create an Events Board to oversee the MCC, RCVB, and other related civic groups like Rochesterfest. Right now the RCVB is run by a self appointing board that no elected official has control over. We would create a board of 5 similar to the RPU board, consisting of 1 council member, 4 at large members appointed like our other boards, and staff serving as ex-officio members. Unlike the current situation, we now can oversee and control the taxpayer funds.

    This group would over see the integration of the MCC and the RCVB, and provide budgetary oversight of their 2% Hotel/Motel Funds. They would also be tasked in ensuring the conduct described above is addressed and never repeated.

    The MCC would no longer be under the auspices of Parks and Recreation Department, which was never a good fit. This will allow them to focus more directly on their mission and leave the MCC to a group that is more specialized for that institution.

    Unified MCC – RCVB funding and budget: As explained above, the current fund mechanism has a disconnect between the performance of the MCC and the group that is charged with filling it (RCVB). This will eliminate that disconnect. Currently, there is no concern for the RCVB if the MCC requires a large operating subsidy, with the funding coming from the same 2% the RCVB’s funding will be related to their effectiveness. Both of these groups would also be under the umbrella of the newly created board.

    Independent Operating Audit: I think we need a new audit, not necessarily of financial statements, but rather of the conduct and performance of the RCVB. There has been behavior that should be viewed by this council as not in the interests of the city.  I want to understand that if an event is being held in a private venue instead of the MCC, that every effort was made to ensure the event was held in the MCC. I also want to see increases in staffing where appropriate and providing benefit.  I am also interested in ensuring the compensation for officials in this non-profit is in line with that of other Rochester non-profits, including those funded by the city, such as RNeighbors. I specified I want an independent audit because, based on the issues detailed above, I don’t trust the Council, City Administration, or the RCVB Board will show the independence or diligence to get a true feel for the status of the RCVB. I would request an audit be performed by a group not affiliated with Rochester or the RCVB.

    Michael Wojcik
    Rochester City Council – Ward 2

    email:              votewojcik@gmail.com
    website:          www.votewojcik.org
    phone:            507-206-4544
    mail:                984 Fox Knoll Dr. SW, Rochester, MN 55902
    facebook:       Michael Wojcik
    Public time:    3rd Wednesdays,  4-6 PM, Beetles
    I Follow:          http://www.seeclickfix.com/rochester (report issues)
    2010 Resolution:  Be less afraid to say what I think…

     

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