Mt. Crested Butte council wants accountability from chamber

Support with strings attached

The Crested Butte-Mt. Crested Butte Chamber of Commerce went to the mountain on Tuesday, March 6 looking for support moving ahead after a shaky 2011. Ann Johnston, who took a seat on the chamber board just a few weeks ago, got up to speed and then stepped into the line of fire, fielding questions from a supportive, if skeptical, Mt. Crested Butte Town Council.

Mayor William Buck commented that Johnston “must be a quick study” to feel comfortable taking the microphone for the troubled institution. He also later expressed some deep concerns about the organization and its future, indicating there was a lack of confidence on his part in the organizational structure of the chamber.
“What we wanted to do was go over our plan for moving forward,” Johnston responded. “We’ve had some issues in the last couple of years and we’re working together to improve the chamber, both for the benefit of the towns and for our membership.”
Some of the issues that caused the greatest concern came to a head last year, resulting in an over expenditure of funds from the chamber’s account, an inflated line of credit that couldn’t be paid back, the termination of the chamber’s executive director and broad turnover among the non-profit’s board of directors.
With renewed focus from the board and an almost entirely new executive staff that’s yet to be hired, Johnston said the chamber is looking at the “three different legs of the stool” that hold up the chamber: events, the visitor’s centers in town and on the mountain and chamber member benefits.
Bringing more coordination and exposure to the chamber-sponsored events, maintaining staffing and appearances at both visitor’s centers and rebuilding a relationship with its members are all part of plan to put the chamber’s budget back on track.
“In 2011, the budget wasn’t met by almost $50,000,” Johnston said. “The 2012 budget line at the bottom shows a significant difference from 2011, with a $9,000 surplus.”
Over the last couple of years, Johnston said, the chamber had made some changes that were turning out to be very expensive. One choice was to collect membership dues entirely in the month of October, putting another cost to members at a time of the year when revenues are generally low. It also caused the chamber to look for a line of credit that could cover expenses while membership renewals trickled in.
“Previously, the membership renewal was scattered through the calendar year, so that produced a steady revenue stream for the chamber,” Johnston said. “There was a proposal to move that to a single month and there were some advantages to doing so in terms of streamlining operations and increasing efficiency for the staff. But it created a couple of problems.”
The problems stemming from the timing of the membership renewals were only made worse by the chamber’s decision to increase the executive director’s position from half-time to full-time and to give the remaining staff a raise.
“Some of the increases to the staff were so that programs could be created and money could be generated, and that didn’t happen,” Johnston said. “But also the percentage of the staff increases weren’t in line with what you would more prudently do in this economic climate.”
Councilman David Clayton said he was on the chamber board when the decision was made to boost staff pay. “Basically [staff salaries] were brought more into line with what those positions would pay in other communities of similar size,” he said. “But they were larger increases than were offset by additional income.”
Making matters worse, the chamber’s 2011 was artificially inflated with an estimate that 100 percent of chamber members would renew their memberships. Clayton said last year, after all the upheaval at the chamber, the number was closer to 75 percent.
The result is a $50,000 line of credit at a local bank that came due in early March that the chamber cannot readily pay back; four out of nine new board members; a mostly new staff; and a budget for 2012 that shows a $9,000 surplus. That surplus will be built up over several years to repay the chamber’s debt.
“The 2012 budget line … shows a significant difference from 2011, with a $9,000 profit,” Johnston said. “This year, the budget is very conservative and it’s kind of a worst-case scenario. It’s probable that we’ll earn more income than what is listed.”
The chamber is also trimming its ranks from 3.5 staff members to 2.5, as well as budgeting for a 75 percent renewal rate when they’ve traditionally had renewal rates of more than 80 percent.
Johnston said she thought replacing the chamber’s executive director would help the chamber meet its budgeting goals. Already the chamber’s executive search committee has received more than a dozen applications, about half of which are from people living locally, and hope to fill to position by April. The chamber board also plans to hire a third party to plan Crested Butte Bike Week, so the events don’t lose any momentum from years past.
“The interests of the town and the chamber are too dissimilar,” Buck said. “Both towns have supported the chamber with BOLT funds and we definitely have been contributing. But there has been reluctance to sign an agreement with no structure.”
Buck continued, “The proposed structure is a structure. Obviously there are questions and concerns. Are you going to get rid of that line of credit once it gets paid down or are you going to draw on that again? That would be a concern. There’s bad direction and it’s not your fault. It’s just the way things have broken down.”
Without speaking for the council, Buck told Johnston that the chamber’s organizational structure would be key to any future agreement with the town of Mt. Crested Butte. “There definitely needs to be a structure in place.”
Councilman Andrew Gitin said, “The biggest thing is, how did we get to where we are today and why weren’t there any of the checks and balances there? How do we keep from falling so far down the hole?”
Johnston, who is also the executive director of the Crested Butte Land Trust, answered, “Knowing the structure of non-profits and being the executive director for a non-profit, it’s really important for a lot of transparency on the part of the executive director, it’s really important for the right kind of engagement on the part of the board. If you have a very confident executive director then maybe the board felt like it didn’t need to dig into the details as much. I’ve seen that happen in other organizations. So it highlights issues we really need to be aware of. But I do believe it’s very solvable.”
Buck acknowledged the efforts being made and the mistakes of the past, saying, “Part of the discussion I think we need to be considering is how will these funds be managed. Not speaking for the council, but moving forward, I think our concerns are pretty much in line.”
Staff was asked to draft an agreement between the town and the chamber to be considered at the next council meeting March 20.