CVB offers few details about how it spends tax money

Doug Price, CEO of the Colorado Springs Convention and Visitors Bureau, calls tourism the “invisible industry,” and based on his policy for sharing how the CVB spends public money, he intends to keep it that way.

Despite the fact that taxpayers provide the CVB its money, Price has declined to release information about his own salary, and he also won’t say how much his organization is paying an out-of-state consultant to help draft its three-year strategic plan.

Price

The city budget shows how much tax money the CVB gets, but only Price and other CVB officials know how and where it’s spent. And they aren’t offering any details.

The CVB gets about 80 percent of its budget — roughly $2.4 million this year — from the city’s lodging and automobile tax, also known as LART. Membership fees generate about $582,000, and El Paso County contributes about $24,000.

Salaries are the CVB’s biggest expense, an estimated $882,000 this year, which includes a 4.5 percent pay increase for employees. The next largest budget item is $838,000 for advertising — $364,000 for online ads and $474,500 for other media.

The amount spent on travel and trade shows is $173,385 for this year, an increase from last year’s amount of $123,320.

But exactly where that money is going is unknown.

Price says he’s justified in withholding those details because of the CVB’s tax designation, 501(c)(6), does not require him to open his budget under the Colorado Open Records Act.

The Internal Revenue Service allows the 501(c)(6) designation to organizations that promote the common economic interests of all enterprises in a trade or community. It’s usually assigned to chambers of commerce, real estate boards and business trade associations.

“Simply stated, we’re not a city agency, we’re independent from the city,” he said. “We choose to put the information out there that we put out there. I think we’ve given plenty of information about what we’re doing.”

This nonprofit status was part of the creation of the CVB when it split from the Colorado Springs Chamber of Commerce in 1980. As a nonprofit, it provides both an annual report and files a form 990 with the IRS. Neither report breaks down specific expenditures.

Legal exclusion aside, Price called details about spending an “internal” matter.

“All businesses have internal issues,” he said.

He also said he has no moral obligation to explain how he spends taxpayer money.

His moral obligation, he said, is to the CVB’s private contractors, who don’t want their prices released to the public.

“We enter signed agreements not to reveal this information, the cost of the work done for us. That’s as plain as I can make it,” he said.

The mayor and city council approve the CVB’s annual budget but city Budget Manager Lisa Bigelow said the CVB isn’t required to notify the city about budget changes or specific line item expenditures.

Outgoing Mayor Lionel Rivera is aware that the CVB is not legally bound to open its budget.

“I can’t imagine why they wouldn’t (release the information),” he said. “But they don’t have to.”

Chris Beall, a lawyer who consults with the Colorado Press Association, also said Price isn’t required to reveal budget information because the group is not necessarily fulfilling a governmental function, one of the deciding factors for which organizations are exempt from the Colorado Open Records Act requirements.

“The bottom line is that every situation is a case-by-case analysis on the very fact-intensive question of whether the private entity is performing a function that would otherwise be performed by the government,” he said. “The analysis of whether a private entity is subject to the CORA focuses on a variety of factors.”

Government and community leaders offered varied responses to Price’s stance.

Paige

Sean Paige, a former city council member and small-government advocate who lobbied last year for an audit of the Colorado Springs Economic Development Corp., said the new council should consider policies requiring more transparency from the CVB.

“I didn’t realize they didn’t fall under the open records act,” he said. “I am a stickler for transparency. This isn’t the CIA; it’s the CVB. Everything they do should be open information.”

Price isn’t always tight-lipped about many of the CVB’s marketing strategies or about how much money is being spent.

He readily told city council the amount of money, $80,000, the CVB paid Stone Mantel, a local company, to help create a brand for Colorado Springs.

But Price said he doesn’t believe all expenditures should be made public, even as he touts the new initiatives and marketing plans created during his five months on the job.

He is willing to talk about the CVB’s new smart-phone application that allows tourists to download information about the city, but won’t say how much he spent on it.

CVB spokeswoman Chelsy Murphy said only that the cost of the app “came in within budgeted numbers.”

“That’s not an acceptable answer,” Paige said. “They’re not doing anything to be ashamed of, so why not lay it all out on the table?”

Edmundson

CVB board member Susan Edmundson, executive director of the Bee Vradenburg Foundation, believes the bureau is “pretty darn transparent.”

“We know we’re working with taxpayer money, and I think they’re pretty open,” she said. “It’s not the board’s place to question that. And really, it’s the staff’s function to communicate with the media — that’s not the board’s role.”

Councilwoman Jan Martin seemed to feel differently.

She said she has been contacted about the lack of transparency at the CVB in the past.

“Certainly, I am comfortable with more transparency when government money is being used,” she said. “And the LART that’s used to fund the CVB is a tax. I’ve spoken with them about this in the past, and they’re supposed to be releasing more information.”

Martin later spoke to Price and said she felt the CVB had “an exciting and wonderful message” that shouldn’t be dampened by concern about their line-item budgets.

Martin

“They put out an annual report,” she said. “And they are responsible to the IRS — all nonprofits are, but these inquiries take away from their message. They can’t spend time answering every inquiry about every line-item on their budget.”

Martin said as a nonprofit, the CVB wasn’t required to be more transparent — but she admitted that few nonprofits receive millions of dollars in taxpayer money.

Newly elected Councilman Tim Leigh said he trusts and respects the staff of the CVB and is comfortable leaving the spending up to them.

“I can’t say that about all the entities in Colorado Springs,” he said. “But they’re professional marketers. I guess I don’t see why we have to know minutiae. They are accountable to the city, and they’re within budget. We should let them do their jobs.”

Leigh said “it’s a tough line” for officials dealing with public money.

Leigh

“There are only 864,000 seconds in the day,” he said. “How many do you spend responding to every request for information? They can’t divulge confidences. I have a tremendous amount of respect for Doug Price.”

Still, even Leigh is curious.

“I don’t know why he can’t send the information,” he said. “But we need to trust the people in power to do their jobs. If he’s within the budget, that’s good enough.”