How 71% of Elgin tourism bureau's costs went to salaries, travel

Every time someone spends the night at an Elgin hotel, half the taxes paid on that room are intended to help fund local tourism initiatives.

But a Daily Herald analysis of the Elgin Area Convention and Visitors Bureau financial reports shows those tax dollars mainly go to pay salaries and travel for the three-person operation.

Those costs, totaling $306,455, made up 71 percent of the visitors bureau's expenses last year, according to an analysis of the bureau's federal tax filings. By comparison, seven similar tax-funded suburban tourism agencies spent between 31 percent and 59 percent on those expenses.

The Elgin bureau's figures include $41,339 spent on trips to conferences, conventions and meetings, at a time when the agency was running $50,000 in the red, according to financial reports.

“The economy has been tough,” said Kimberly Bless, the $118,196-a-year executive director of the Elgin tourism bureau. “The good thing is with tourism, we're an investment because we return those dollars.”

Bless said the bureau has cut costs and that its expenses pay off in luring events that bring tourism dollars. Those visitors help fund the bureau's operations, not local property taxpayers, she pointed out.

Bless said the trips to conferences helped attract events and programs to the area, such as sports tournaments.

But with local funding dropping as the Grand Victoria Casino's fortunes decline, and with the threat of reduced state funding, some are looking for more concrete results.

“I have not seen any evidence of their successfulness, but that's doesn't mean it's not there,” said Elgin City Councilman John Prigge. “I have questioned what they get from us in the past or asked to at least get them to illustrate to us how the money they get comes back.”

Elgin distributes half its hotel/motel tax revenue to the visitors bureau, which amounts to close to $200,000 a year, according to city records.

The bureau received another $178,347 from the state's hotel/motel tax haul last year, according to Illinois Comptroller Leslie Munger's website.

The Elgin tourism bureau outspent revenue, which Bless attributed to a lag in payments from the state. She said the agency is solvent now, but not without a struggle.

“We have not had any raises or bonuses in two years,” she said.

Bless said she recently laid off an employee, which saved about $70,000.

Sean Stegall is Elgin's city manager and also secretary of the Elgin Area Convention and Visitors Bureau board of trustees. He said the bureau is valuable, but says its finances will be up for scrutiny, especially with the state budget stalemate between Gov. Bruce Rauner and Democratic legislative leaders.

“It is reasonable to think there are gong to be cuts, permanent cuts, for nonprofits” like the tourism bureau, Stegall said. “Our funding for the convention and visitors bureau is something that is going to be discussed.”

Similar discussions will likely occur among boards at other suburban tourism agencies that received a combined $4.1 million in state funding last year.

In the suburbs, the DuPage Convention and Visitors Bureau received the most from the state with nearly $1.2 million in hotel/motel taxes. Aurora, St. Charles, Lake County, Lisle, McHenry County and Schaumburg's Meet Chicago Northwest tourism agencies received a combined $2.9 million, according to state financial records.

The Illinois Policy Institute, a conservative organization that tracks and analyzes government spending, commissioned the report on salaries of leaders at nonprofit organizations around the state that receive tax subsidies. Emily Rose, the institute's vice president of development, said it's important to analyze and track this type of spending, especially when state funding is becoming increasingly limited.

“In private nonprofits, if a donor feels the organization isn't doing their job well, they can decline to donate anymore,” she said. “Taxpayers aren't given that choice. It's good practice for nonprofits to release reports and be able to show the results they've gotten for the public money they've spent.”

Despite a recent major overhaul to northernfoxrivervalley.com, the Elgin tourism bureau's website does not provide access to its annual report or progress reports on spending initiatives.

While 10 other communities are associated with the Elgin Area Convention and Visitor's Bureau, the majority of the local funding comes from Elgin. That's even after the city pulled a $200,000 annual grant from riverboat casino receipts about six years ago, city officials said.

Bless suggested one way to track the success of her agency is the growth of hotel/motel tax revenue the city is reporting, which was up 7 percent to $437,272 from 2012 to 2013. But that's less than the $490,029 in hotel/motel tax revenue the city received in 2007, just before the Great Recession hit.

Stegall said he's seen “the value in the CVB like the value in all things the city has funded.”

“When it comes to evaluating the convention and visitor's bureau activities, there are a lot of things you can look at,” Stegall said. “It is always a challenge to prove the value of those things that aren't directly tangible.”

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Contact Jake at jgriffin@dailyherald.com or (847) 427-4602.