Position Statement on:

The City of Sun Valley and Marketing Funding

Addressed to the City of Sun Valley City Council and the citizens of Sun Valley

 

 

RA Youngman

21 September 2010

 

 

The recent press release authored by an organization now calling itself  “The Sun Valley Marketing Alliance” has significantly altered my posture with respect to funding of marketing initiatives by the City of Sun Valley for FY2011. As you well know, over the first six months of this year a committee of qualified citizens earnestly completed a program of comprehensive research, data analysis, and interviewing of experts and local businesspersons. Based upon this substantial work, a reasoned, fact-based set of recommendations was developed and communicated to the community at-large. The primary focus of the committee’s recommendations was identification of near-term opportunities for marketing and product enhancement of the Sun Valley resort area. The aggregate body of this work indicated that there exist substantial opportunities for near-term actions that will directly affect the success of the local resort economy. Initiatives such as a focus on the Boise airport as the primary air-travel portal and associated luxury bus service, establishing a single brand for the resort area, and a third-party condominium rating program are examples of what these efforts have identified. The committee also proposed the creation of and structure for a new, lean, entity, Sun Valley Resort Area Marketing, Inc. (SVRAMI), a 501c6 non-profit corporation to focus upon local area marketing only. As proposed, the structure of this organization was substantially dependent upon the identification and hiring of a Chief Executive/Chief Marketing Officer (CEO/CMO) who would provide both strategic and operational focus for the local area marketing efforts. Local event development and promotion, visitor services, customer satisfaction, and business support was to be the focus of the Chamber and Visitors Bureau.

 

Ensuing discussions led to some modification of this structure, specifically that SVRAMI take “umbrella” responsibility for the visitor center, event development/promotion, and customer satisfaction working via a contract or other arrangement with the Chamber and Visitors Bureau. Although not ideal, such an arrangement was likely workable.

 

In our FY2011 budget deliberations we considered funding of SVRAMI and approved an amount of $400,000 for future consideration when the organization hired a CEO/CMO and presented a strategic plan with associated operative initiatives. We also tentatively discussed additional FY2010 funding to assist in a search for the CEO/CMO to ensure that the new organization could leverage the needed direction, professionalism, and strategy from this key person as soon as possible. Unfortunately, SVRAMI never pursued this funding nor did they communicate in any way with the Sun Valley City Council.

 

The structure of SVRAMI was intentionally lean and included a maximum of five board members (three “core” members and two “at large” members chosen by the core members) and, as outlined above, a CEO/CMO. One core board member was to be appointed by the City of Sun Valley, one by the City of Ketchum, and one by the Sun Valley Company. As stated in the press release announcing the formation of SVRAMI, in all cases the board members were to “possess significant business skills, experience, and a track record of success in their respective fields. Board members should also have direct marketing experience, preferably in the resort and tourism industry.”  This criterion was not followed, except by the city of Sun Valley (both Jim Knight and Scott Montgomery have significant marketing experience) and the Sun Valley Company, and as a result the five-member board was deficient from a qualifications standpoint. This alone represents a departure from what we, as a council, agreed to potentially fund.

 

According to the press release of 14 September, SVRAMI has now been dissolved and an unacceptable replacement organization, the Sun Valley Marketing Alliance (SVMA), has emerged. The replacement organization is unacceptable for at least five reasons:

 

1.     The new organization has no plans to hire a CEO/CMO in the near term. As I have stated on numerous occasions, the identification and hiring of the CEO/CMO is essential and required as the injection of experience, knowledge, and professionalism into the organization is critical to its success.

 

2.     SVMA has increased the board to nine members, including four members from the Chamber and Visitors Bureau, none of who qualify for board membership based on the fundamental criterion noted above (since SVRAMI no longer exists, we no longer officially have an appointed board member to the new organization (SVMA) although it appears that Mr. Montgomery has been incorporated into the new organization).  As of 21 September I have been informed by Jake Peters, spokesperson for the new organization, that the press release was misleading with respect to the voting rights of the additional four board members from the Chamber and Visitors Bureau; he states that the four members have no voting rights with respect to the marketing activities; they do have voting rights concerning the Chamber activities.  The remaining five members (which comprise an Executive Board) do have voting rights pursuant to both marketing and Chamber activities. With due consideration of this information, I still contend that:

 

a.     Large boards (boards greater than 5 members) are cumbersome, inefficient, ineffective, and yield little or no productive work.

b.     Qualified board members, whether voting members or not, are crucial to an efficient and effective board.

 

3.     The new structure has diluted the representation of the city from 20% (or, arguably, 40% if one includes the vote of the Sun Valley Company representative) to 11% even though we are potentially providing 50% of the funding for marketing. This is not equitable.

 

4.     According to the press release “The (SVMA) Marketing Board will oversee a new national marketing initiative” and “We are moving forward, currently interviewing major marketing agencies to help us create a comprehensive and sensible strategic marketing plan.” This is unacceptable as it ignores the importance of the CEO/CMO position, and is particularly egregious given the deficient nature of the new board membership. It is imperative that the CEO/CMO be engaged in any strategic planning as the commitment and focus of this person is critical to the long-term success of the organization.

 

5.     No plan for (or even realization of the need for) the strategic development of alternate funding sources has been considered. As I have repeatedly stated, I stand firm on the position that funding for such marketing efforts is an inappropriate use of tax dollars. It is my intention that funding for such marketing efforts is reduced to zero in less than three years.

 

I cannot support the funding of this organization, as I would be derelict in my duties to the citizens of Sun Valley to most efficiently, effectively, and equitably appropriate tax dollars for their benefit.

 

With respect to longer-term aspects on the general subject of funding of marketing efforts by the City, I have consistently reiterated that I am not in favor of such funding. I contend that it is inappropriate for tax dollars to be spent on resort area marketing to the primary benefit of commercial entities. Such marketing should be a fundamental part of the business plan of any business in the resort area and these businesses should be funding any and all marketing initiatives. The city should concentrate on providing an optimal level of infrastructure, maintenance, improvements, and services for our citizens and resort visitors.

 

In realization that the local cities have historically provided funding for marketing, I have reluctantly consented to a transition period of no more than three years (but preferably one year), to wean the local business community off of city funding and to appropriate business-based funding. In the meantime, any marketing or event funding should require demonstration of a direct and substantial benefit to the revenue stream of the city of Sun Valley and/or a direct and substantial benefit to the quality of life in Sun Valley. With this in mind, I am proposing that the council consider a “transition period” policy to fund such initiatives on a “project-by-project” basis. As such, we (as many other cities have done) should develop a comprehensive application for funding that includes, but is not limited to, sub-sections describing, in detail, the nature of the project or event, the requested funding level, the benefit to the city, the benefit to the citizens of the city, the economic benefit to the city (including demonstrable estimates of the impact on city LOT revenue), and a description of exactly what the Sun Valley funding will be spent on. Institution of a follow-up audit to ensure that the funds were properly spent is also recommended. This approach offers the greatest amount of control and accountability on the part of the council, allows for complete transparency to our citizens, and imparts associated accountability on the part of the organizations pursuing the funding.

 

As I indicated in our council meeting of 16 September, at this juncture, I see no benefit to the city with the current proposal of hiring an interim marketing consultant. It is fundamentally a transition proposal; a transition to a new marketing entity that I have argued above is not worthy of support. Therefore I do not support entering into such a contract. The city should not be in the business of marketing.

 

I offer this position statement in writing in the spirit of objective discourse and to ensure that each of you have an understanding of the basis for my position and, importantly, provide you with the opportunity to bring forth alternative views, offer constructive criticism, add additional data and analysis, and summarize positions of your own as we construct a path forward on the issue of marketing funding.

Bob Youngman