CEDAR RAPIDS — Cedar Rapids will explore additional protections and oversight of organizations receiving public money, but such protections would not have prevented the “newbo evolve” debacle, Cedar Rapids Mayor Brad Hart said Tuesday.
“We will certainly look at whether we will require if an organization gets hotel-motel tax money and has a large enough budget, then they should have an audit, and we should see that audit,” Hart said during a council meeting. “Getting some type of report each year before they get the next allocation, yes, that makes perfect sense, and we can institute those changes.”
However, he added, “It’s tragic, but none of them would have prevented this. The hole was too deep to dig out of.”
Hart spoke in the moments before the nine-member City Council unanimously approved forming a new Cedar Rapids Tourism Office based at VenuWorks, the contractor housed at the DoubleTree Hotel Cedar Rapids Convention Center complex that books events in the city’s performance spaces.
The city and VenuWorks inked a one-year agreement for VenuWorks to continue the city’s tourism efforts, including booking conventions, sports events, meetings and entertainment events.
The city will provide $545,000 in hotel-motel tax money to fund the office through June, which includes a $6,000 per month management fee.
Casey Drew, the city’s finance director, will oversee the operation. He said the city will not know until the next budgeting cycle how much would be provided for the remaining months of the agreement.
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An unspecified number of the former GO Cedar Rapids staff will continue with the new tourism office to maintain continuity with upcoming events and to tap into their contacts.
The small staff was largely viewed as effective, but the president and community events director were fired after August’s “newbo evolve” festival posted a $2.3 million loss.
Drew noted some details still must be sorted out. Meetings will be scheduled with hotels about how to handle a destination marketing fee, which some charge, and they are considering waiving membership tourism bureau dues and finding ways to promote groups that already paid.
Drew said it appears VenuWorks will not be able to collect $50,000 for a regional sports authority certification from the Iowa Economic Development Authority.
In a tense, long meeting, several of the council members spoke about “newbo evolve” and GO Cedar Rapids with some, like Hart, calling for changes and others defending themselves and the city.
While the city and GO Cedar Rapids are separate organizations, council members faced criticism from community members for not doing more to prevent the substantial loss and urged them to pay repay local and non-local vendors owed some $800,000.
“I really think you failed our vendors, both our local ones and the regional and national ones, who I could see avoid us in the future,” said Pat Meier, 70, of Cedar Rapids. “Morally, I think we are responsible.”
Scott Anderson, during a public comment period, urged the council to not award any hotel-motel tax money to VenuWorks until “all vendors are paid.”
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Hart shot down the idea, which several others also suggested, saying there is no way to undo the damage, and it would be difficult to try to repay all the vendors.
Among other ideas for changes were requiring annual reports from organizations receiving money from the city and also creating restrictions on organizations having names that closely align with the city to alleviate confusion.
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