Councilman concerned city isn’t receiving return on
investment
Morgan Hill – The 2005 Taste of Morgan Hill festival is being hailed as a big success, but the true financial gain from the Morgan Hill Chamber of Commerce’s largest fundraiser is a mystery because no one will say how much it cost to hold the event. And the chamber’s reticence is frustrating some city leaders.
Dan Ehrler, the chamber’s executive director, said this week the event grossed $225,000, up from $190,000 in 2004, but he wouldn’t release any additional financial information.
“That information is proprietary, nobody has ever asked before,” Ehrler said Thursday. “It’s something the organizers feel [should remain confidential]. I don’t really have an answer.”
But Ehrler is under pressure from city leaders to provide one soon or risk endangering a contract with the city that nets the chamber $125,000 each year, including $20,000 for the annual September Taste event.
Councilman Mark Grzan said Friday he wants to see detailed financial information that proves whether the chamber’s economic development activities are worth the investment of public funds.
“People tell me it does a lot of good and I’m looking for that,” Grzan said. “I’m trying to quantify the return on investment. How many business have come in? How many jobs have come to Morgan Hill?”
The chamber has received $125,000 a year from the city since 2003, the first year of an expanded economic redevelopment partnership between Morgan Hill and the chamber. It previously received 90,000 a year.
In contrast, Grzan noted that the city spends about $75,000 on services for senior citizens.
He said the chamber, like all city beneficiaries, needs to show how the money is used and that it really needs the funding.
“I’m trying to evaluate if these dollars are better spent for other programs,” Grzan said. “Can we use those dollars some place else? Does the chamber make enough money that it really doesn’t need $125,000 from the city?”
The public money is intended to promote economic development by bringing travel writers to the city, through programs such as Shop Morgan Hill and various other marketing activities.
Ehrler said the chamber uses about $20,000 of city money to support Taste of Morgan Hill. That event costs the city another $8,603.90 in police and public works department charges, which has been reimbursed by the Chamber.
The Gilroy Garlic Festival, South County’s biggest charity event, makes all of its revenue and expenses public, including a detailed listing of how much money it donates to particular charities. Hollister’s annual Independence Day rally also discloses its net revenue.
City Manager Ed Tewes said that the chamber provides a detailed accounting of its activities each year when it renegotiates its contract, and has to provide invoices to get reimbursed by the city.
But Grzan said he doesn’t believe the council has ever made a concerted effort to understand just what services the chamber provides.
The chamber’s most recent quarterly activity report, presented to the council in October, was a half page of bullet points describing the such chamber activities as:
- Implement business retention and attraction programs
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Prepare and maintain marketing materials
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Maintain real estate property database on Web site
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Work with tourism advisory committee
It contained no figures or funding information and the chamber has resisted providing more comprehensive information on how those services benefit Morgan Hill businesses.
Councilman Larry Carr attributed the chamber’s reluctance to divulge financial information to concerns that it won’t be interpreted properly.
“I have sensed a concern about what we’re looking for, and what we’re comparing is a fair thing for us to look at and making sure we’re doing it the right way,” Carr said. “I think the way they tell us how it’s paying off needs to improve. It’s not just sales tax growth.”
Ehrler was not available for further comment on Friday. He has not informed the council when the financial revenue will be available. Grzan said he plans to ask again.
“I’ll inquire and see what I get,” he said.
