Category Archives: Maple Leaf

Maple Leaf: Election Issues and Update

Summary of responses to my article published July 25, 2018. GUEST OPINION: Tim J. Clark. Maple Leaf: Will more money be a recurring theme?  
Talking Points

Non-Supporters: The “Talking Points” from non-supporters of the process used to fast-track this project can be characterized by three Cs: Crony capitalism, Corruption, and Contempt for the citizens:

  • Crony capitalism is an economy in which businesses thrive not as a result of risks they take, but rather as a return on money amassed through a nexus between a business class and the political class.”
  • Corruption is when a person’s conscience no longer registers right and wrong. – Pope Francis
  • Contempt for the citizens.  “If you have contempt for someone or something, you have no respect for them or think that they are unimportant.”

2018 and 2020 Elections. The ends do not justify the means. It was evident last June/July that the decision to approve Maple Leaf had already been made and citizens would only have a voice in the 2018 and 2020 elections. This observation led me to develop the Independent Voters of Brown County IN blog and Facebook Page.  

  • Brown County Matters is another Facebook Group that citizens can join that covers “Matters that Matter” to Brown County Citizens.

Acceptance or Rejection by the Community?  Just because a venue is built and “might be” successful, does not mean that it will be accepted by the community at large. The fast-track process for this government-owned music venue will always be part of the legacy.

  • The county is funded by income taxes and property taxes.  The revenue from the innkeeper’s tax can only be used to promote tourism.  An economic analysis by students from IU’s SPEA/MPA program identified that tourism-related wages are among the lowest in the state.

Maple Leaf Options – Are we  (county citizens) stuck with a government-owned music venue forever?  FOR SALE BY OWNER — ACCEPTING OFFERS   🙂

  • The venue can always be sold. The sales price would be determined by the success of the venue.
  • I would never want to see an attempt to transfer the debt on to taxpayers or use general funds to subsidize the venue in any way.
  • The president of the county council at the time – Dave Critser at the council meeting to approve funding, stated that in a worse case scenario, the county would allow for a default and a transfer of the asset to the bank.

Social Media – Voice of the Citizens

There can be many emerging issues (electronic sign for example) that can increase risk and lead to divisiveness and polarization within the county that can be expressed on social media. This can contribute to a reputation that Brown County is a place to be avoided.

Maple Leaf: Will “more money” be a recurring theme?   

Published in the July 25, 2018 edition of the Brown County Democrat.

The July 18, 2018 article in the Democrat, “New ‘Leaf’ Turned: Work begins on performing arts center,” provided the highlights from the groundbreaking ceremony for the Maple Leaf Performing Arts Center (MLPAC).

The same edition of the paper also included the article “Additional loan sought for Maple Leaf project.” The request for additional monies is because construction bids exceeded the project budget by $743,167. In addition to the new $200,000 loan, Convention Visitors Commission (CVC) Board member Mike Patrick suggested soliciting donations for $600,000. This amount would include covering the money needed to pave the parking lot. Another requirement that was recently identified by the Maple Leaf Management Group is the need to develop a strategic plan.

At the groundbreaking, President of the County Commissioner Dave Anderson was quoted with stating the following: “No process was missed, not one thing was overlooked and I looked closely. It was done right.”  

This may be an accurate statement from a legal standpoint if not somewhat overstated. The county attorneys – Barnes and Thornburg did oversee the project to ensure compliance with appropriate laws and regulations.  Similar sentiments were expressed by Council President Keith Baker. Baker remarked that government officials performed their due diligence and he was complimentary of the Maple Leaf business plan — referred to on the Maple Leaf website as “The Plan.”

It’s unfortunate that both Anderson and Baker referenced opposition and obstacles to the project which could likely have been prevented through a more deliberate planning process, transparency and by conducting open meetings. Citizen input at public meetings would have helped to identify risks and may have also led to suggestions for other options other than a music venue. This information would have allowed the commissioners and council members to make more informed and balanced decisions.

A little history. Commissioner Diana Biddle led this project on behalf of the commissioners, Councilman Baker on behalf of the council and innkeeper Barry Herring on behalf of the CVC. Only the commissioners and council are authorized by law, to approve the funding for this venture.

Barnes and Thornburg, at the direction of Commissioner Biddle in July of 2017, designed a process for fast-tracking this project. The initial plan by the attorneys would have included public meetings and the active involvement of all affected government entities. The county Redevelopment Commission (RDC) volunteered to facilitate this process. The RDC was not asked to be involved in the fast-track process.

The fast-track process included a refusal by the commissioners and council to hold public meetings to solicit input from citizens on the desirability of this project. At the public meetings, which were held to approve zoning and funding, commissioners and council members declined to respond to written questions, many of which were provided in advance of the meetings.

The Maple Leaf project team included members with an inherent conflict of interest.  Doug Harden is credited with developing the idea for this project that he refers to as his ‘dream.”  Harden is identified as the designer and architect who has a direct financial interest in this project. The innkeepers who led this project will indirectly benefit from increased overnight stays in their respective establishments.  Individuals that served on the team to promote this project did not include anyone that identified expertise or experience in owning and managing a music venue.

Is a 2000-seat music venue feasible? Assuming that what worked in the past (the Little Opry) will work in the future is a significant risk. Given the conflict of interest, the lack of music venue experience among project leaders and the inexperience of commissioners and council in reviewing a “business plan” for what is generally considered a private sector venture, contracting for an independent feasibility study was needed to identify and manage the risks associated with the project. The council refused to delay the project to contract for the needed study.

The collateral for the Maple Leaf loan is future profits from the venue and revenue from the innkeeper’s tax.  Initially, profits were to be shared with the county.  A bank or other lender without collateral from tax revenue would require a private sector venture of this type to develop a more thorough business plan.  The requirements for business plans are available from the Small Business Administration. An example of a Music Theatre Business Plan is available at bplans.com.

Consequently, since the bank was not relying solely on a business plan to help assess the risks associated with this project, it was up to our commissioners and council to educate themselves to ensure they were performing their due diligence before voting to approve this project.

Citizens were not informed through an announcement in the Democrat of any public meetings where the business plan was to be reviewed and discussed by the commissioners and council before their vote to approve this project. Due diligence would have required several public meetings.

The decisions that have already been made by the Commissioners, Council and CVC will determine the success or failure of this government-owned music venue.  At this point, my suggestion for voters is to elect representatives that will oppose any future effort to transfer all or part of the $12.5 million or more Maple Leaf debt onto county taxpayers or use general funds to subsidize the venue in any way.

This project was sold as “too good to fail” – let’s hope that’s true.   The public and voters will determine if the decisions and process used to fast-track this project are in the best interests of all county citizens.

Residents scrutinize Maple Leaf processes

Excellent article in today’s Democrat:  “Residents scrutinize Maple Leaf processes.”  Thank you, Sherrie Mitchell, for representing us and asking the tough questions on behalf of county citizens!  And thank you Bill Austin for providing your observations and recommendations on the process!

A few of the many quotes that caught my attention:

About the project:

“… having an independent review of the county-owned concert hall project before bids to build it are opened makes sense. There is insufficient transparency, and too much dependence on one person, and lack of oversight. I don’t want my name to be included as being the oversight when I am not. … I was supportive, and am supportive if it’s done right.” – Bill Austin, who resigned as a member of the Maple Leaf Building Corp and is a former County Commissioner.

About responsibility:

The “position” of the commissioners and council is that “they do not view the innkeeper’s tax as local taxpayer dollars.” Per president of the County Council, Keith Baker – “ The county doesn’t control those dollars; the CVC controls those dollars. … Those are dollars collected by the tourists for use by the CVC to market tourism and Brown County. … It’s not a county deal, or I would be grabbing it and using it for roads.

By statute, the county DOES control those dollars!  Maple Leaf couyld not have been approved withough the vote by commissioners and council.

The FACTS:

Indiana Code – IC 6-9-14 Chapter 14. Brown County Innkeeper’s Tax, allows for the collection of revenue from the innkeeper’s tax.   The county auditor is responsible for managing the funds and providing financial oversight as required by the State Board of Accounts.

The statute establishes a Convention Visitors Commission (CVC).  The commissioners and council appoint CVC members and can remove them at any time.  The council by statute is responsible for “reviewing and approving ” the CVC budget.  (The CVC contracts with the Convention Visitors Bureau (CVB) to market tourism).

If we had an effective comprehensive plan, the priorities for investments with revenue from the innkeeper’s tax to promote tourism would be included in the plan. Development of the comprehensive plan – by statute, requires the input from citizens at public meetings.  CVC members should be appointed based on their support for the plan. The Council is responsible for reviewing and approving the budget to ensure compliance with the plan.

The commissioners and council are elected officials. Per the U.S Constitution, they serve the citizenry.

The “status quo” has been that the expenditures of revenue from the innkeeper’s tax is being done without alignment with the county comprehensive plan.  Further, financial oversight by the council has been inadequate. For instance, they do not hold the CVC to the same standards they expect from county departments during the annual budget review and approval process.

Citizens have the responsibility to provide the needed oversight and to elect representatives that take action that results in benefitting all citizens and not just special interests.

The CVB was chartered in 1984. There has been no savings and the CVC/CVB still rents space for a visitor’s center.  Again, the CVB reports to the CVC who reports to the Commissioners and Council who work for “We the People.”

In summary, who controls the expenditure of revenues from the innkeeper’s tax? Correct answer? The citizens!

Questions to ask candidates for County Council about the CVC.

 

Council Meeting – April 16, 2018

At the county council meeting tonight, the council received a general update from Kevin Ault of the Convention Visitors Commission (CVC). Questions to ask candidates that are running for election/re-election to the council:

Are you aware that Indiana Code (IC 6-9-14-4) requires the CVC to “annually prepare a budget … and to submit it to the county council for its review and approval”? Please explain the process to include identifying how citizens can obtain copies of the approved budget.

Are you aware that the CVB has an annual audit conducted by Blue and Company and the CVB also files an annual information report (990) to the IRS? Should these reports be reviewed as part of the annual review and approval process? If not, why not?

Are you aware that the improper transfer of funds would be considered a class D felony? Does the scope of the annual audit of the CVB include a review of internal controls?

Has a new CVC budget been prepared that includes the impact of Maple Leaf on the CVC/CVB budget? If not, why not? If so, where can citizens obtain a copy of the budget?

Maple Leaf – Fast-Track Process

The Maple Leaf Music Venue and Performing Arts Center is to be a Brown County, IN government-owned and managed venue.  It is a 12.5 million dollar facility. The money is borrowed by the county.  Any profits plus revenue from the Brown County innkeepers tax is used as collateral.  Taxpayers are paying for start-up costs that have included an initial  $30K legal bill.

Fast-Track Process

April 9. 2017. Commissioner Diana Biddle and Councilman Keith Baker attend a presentation conducted by innkeeper and CVC Member Barry Herring that introduces a concept for the Maple Leaf Performing Arts Center.  Both Biddle and Baker embrace the project and lead efforts to get the support of their colleagues on the commission and council.

June 20, 2017. A group led by local innkeepers propose a government-owned and managed performing arts center (music venue) at the Brown County Playhouse.

August 22, 2017. Request for Zoning Change, Area Plan Commission, Recommend approval by the Commissioners.

September 6, 2017.  9:00 am Commissioner Meeting. Zoning approved. It was stated that the approval was for zoning and not the project and that public meetings would be held regarding the desirability of the project.

The only official public meetings that our commissioners and council held on this $12.5 million county owned and managed music venue were to approve the project. 

November 15, 2017. Commissioners approve the project.

November 20, 2017. Council approves project.

Dec 20, 2017. Commissioners pass a final resolution approving the project.

SUMMARY –  Extracted from the following article: Dec 27, 2017. GUEST OPINION: The role of process in the future of Brown County. The Maple Leaf Performing Arts Center (MLPAC) project and the process used to fast-track approval may represent a turning point for the future of the county.  

  • In April 2017, owners of hotels and inns, who are also appointed to the Convention and Visitors Commission (CVC) and Convention and Visitors Bureau (CVB) decide to use the revenue collected from the innkeeper’s tax to invest in an asset that will promote tourism. The Innkeeper’s Tax is a pass-through tax paid by the party renting the overnight accommodations.
  • CVC members are appointed by the county commissioners and council. The CVB is a non-profit organization established to manage tourism related promotion on behalf of the CVC.
  • CVC/CVB members decided on a music venue and performing arts center and also determined the size, location, scope, cost (12.5 million), and overall governance plan for the facility. Given that this investment is expected to result in overnight stays, their businesses will directly benefit from the investment, and the asset values of their establishments will likely increase.
  • Initially, county citizens were told that revenue from the innkeeper’s tax would be used to pay the principal and interest on the mortgage for the venue. Any profits were to be used for community and county infrastructure priorities.  The final terms of the deal are that profits would be used to make the mortgage payment and the revenue from the innkeeper’s tax would only be used if profits were not sufficient to make the payment.
  • A common perception in the county that was reinforced by the president of the county council, may be that the revenue from the innkeeper’s tax is “their (CVC) money.” This inaccurate perception may have contributed to a lack of transparency over the years regarding the management and expenditure of these funds.  This revenue, per statute, is a county asset. Commissioners and Council (elected by citizens) appoint CVC members who are subordinate to the citizens and their elected officials.
  • The approval of a 12.5 million dollar loan using the revenue from the innkeeper’s tax as collateral was approved by the commissioners on Nov 15 and the county council on Nov 20. The commissioners approved another resolution approving the project on Dec 20. In case of default, the venue would become the property of the bank, and per the county council president and the county financial consultant, county taxpayers would not be obligated to assume the liability.
  • No public meetings expressly focused on this important project were scheduled by the commissioners or council before their meetings to approve the project. The League of Women Voters of Brown County offered to facilitate a public meeting to address citizen questions, concerns, and issues regarding the project. Members of the CVC, the CVB and the informal team working on the Maple Leaf project declined to participate, as did several key elected officials.
  • The editor of the only newspaper in the county – The Brown County Democrat, did recuse herself from being the primary reporter because of a conflict of interest — her husband serves on the CVC. The Democrat welcomed opposing opinions in Guest Columns and Letters to the Editor.

More information and references: Maple Leaf Project – For The Record

Does the County function as an oligarchy?

Professors from Princeton University and Northwestern University respectively looked at more than 20 years worth of data to answer a simple question: Does the government represent the people?  Their conclusions identified that “The opinions of 90% of Americans have essentially no impact at all.” This study led to headlines in the international and national media that either suggested or declared that the U.S. was an oligarchy.

Oligarchy is a form of power structure in which power rests with a small number of people.” (Wikipedia)

If you review the fast-track process that was applied to approve the Brown County government owned and managed $12.5 million Maple Leaf Performing Arts Center (MLPAC), what would you conclude:

Does this approach model the actions of a representative democracy or an oligarchy?

More Information and Context:

Photo OP of the Maple Leaf Project Team with Congressman Trey Hollingsworth (R). The photo was taken in the Salmon Room, County Office Building.

Specific Maple Leaf team members include: Diana Biddle (R) – County Commissioner and Maple Leaf Management Group); Keith Baker (R) – President County Council; Darren Byrd – County Council,  Maple Leaf Management Group; Barry Herring –  Maple Leaf Management Group, Conventions Visitors Commission (CVC); Bruce Gould – Maple Leaf Management Group, Convention Visitors Bureau (CVB);  Susanne Gaudin (R) – Maple Leaf Building Corporation, Republican Board Member, Brown County Election Board;  Mark Bowman, Chair, County Republican Party;  Robyn Rosenberg Bowman (R) – President, Maple Leaf Building Corporation.

* CVC members appointed by the commissioners and council. The CVB is contracted by the CVC to market tourism.

Maple Leaf – Stop Digging

Letter to the Editor – Brown County Democrat – “Maple Leaf – Stop Digging” – Publication date moved to May 2, 2018. Letter titled: ‘Stop Digging’ on performance venue.

There is wisdom in the metaphor that states that if you find yourself in a hole, stop digging. The Democrat’s article published April 18, 2018, “Maple Leaf bid opening pushed back” continues to reinforce the challenges, consequences, and issues regarding the process and decisions that were made regarding this project.

The fast-track process applied to develop a government-owned and managed venue lacked transparency and the needed checks and balances to ensure citizens that the Commissioners and Council performed their due diligence.  Project originators and leaders who proposed this project included innkeepers that have a conflict of interest. An independent feasibility study was not done on their behalf to provide objectivity and to validate the concept, financial projections, and risks.

Further, Commissioner and Council approved the project and refused to hold public meetings to obtain citizen input regarding the desirability and concerns with this project. The Commissioner and Council also did not review the complete business plan at a public meeting before voting to approve this project. Representatives from the commissioners, council and the Maple Leaf project also refused the League of Women Voters offer to facilitate a community conversation to address citizen’s concerns and questions.

It’s not too late to stop this project. Identify lessons learned and market the project to the private sector. Brown County has the third highest debt per person in Indiana. We do not need more risk and more debt.

This project was forced on the community. If this venue is built and does not live up to expectations, it will likely lead to more conflict and divisiveness. It may also motivate action towards selling this venue at any cost with innkeeper revenue being used to cover any outstanding liabilities.

The county’s application for a State Stellar grant included a series of new projects that were identified without wide-scale community involvement. Community opposition led to the county’s non-selection for the grant. The hard feelings slowly faded away but are not forgotten locally or within the state.

If Maple Leaf is not reconsidered, the opposition could likely grow, and social media campaigns may discourage any company from wanting their name associated with this venue.

Ongoing opposition and conflict may also discourage visitors from attending events and visiting Brown County which can lead to a reputation that the county is a place to avoid. Advocates of this project have the option of raising private capital and financing this venue with their resources.

Tim Clark
Brown County