Council debates how much authority, at how much cost an independent marketing entity should have

The Front Royal Town Council had questions about the cost of a Destination Marketing Organization (DMO) to oversee the joint Town-County Tourism promotional effort underway. But even more questions arose about the power of a planned 501c6 non-profit to be created to eventually take the operational lead from the existing Joint Town-County Tourism Committee, and it would appear the DMO. This discussion took up much of the first half of a three-plus hour “Special Work Session” focused on budgetary and operational issues Wednesday evening, February 2nd. With the Town Planning Commission booked for a 6 p.m. work session in the Town Hall second-floor main meeting room, council’s more recently scheduled 6:30 p.m. special work session was held in the community room of the Front Royal Police Station.

With its planning commission scheduled in the Town Hall meeting room Wed. evening, the Front Royal Town Council moved to the community meeting room of the new town police headquarters for its special work session on operational and budget matters.

The tourism operational discussion escalated following a remotely presented “Discover Front Royal FY-2023 Budget and Joint Tourism” PowerPoint by Town tourism marketing contractor JLL’s Bethany DeRose. And while DeRose fielded a number of questions before signing off, council was just getting revved up on the topic. More questions, as well as some basic philosophical observations on the nature of governmental functions, surfaced when council began reviewing the follow-up topic of a Memorandum of Agreement (MOA) between the Town and County regarding their joint tourism effort. And those questions and observation revolved, not so much around Town-County aspects of the MOA, but rather around the “Nature of the Beast” of the 501c6 non-profit organization called “Discover Front Royal” being created to oversee future joint tourism marketing efforts.

As was pointed out, that creation involved the ability of a 501c6 non-profit being able to access funding unavailable directly to the involved municipal governments. However, how much autonomy, including event decision authority and ownership of the marketing slogan “Discover Front Royal” that non-profit would maintain, was a sore point for some on council. The serious concern contingent was led by Amber Morris and Scott Lloyd, with some concern shared by Vice-Mayor Lori Cockrell. Defending the concept and reliance on an outside contractor’s expertise, including the planned non-profit’s, were Joe McFadden and Letasha Thompson, with Gary Gillespie showing some concern, but not wanting to give up on the DMO-501c6 plan and the supposed additional marketing expertise promised from the private sector side.

Under the watchful eye of the Royal Examiner camera manned by Mark Williams, upper right, the Front Royal Town Council and staff prepare for a lively budget and tourism operational discussion. Below, early page in the JLL FY23 tourism budget presentation.

During DeRose’s JLL PowerPoint presentation, a proposed FY23 budget of $582,500 was presented. That follows initial funding of $600,000 for the first year-and-a-half of the private-sector and Joint Tourism Committee-led tourism marketing effort. However, it was noted that $182,500 was to be encumbered from the FY22 budget, with a more complicated carryover funding scenario described deeper into the power point. It was also noted in the JLL presentation that in the RFP (Request for Proposals) issued for the DMO contract, an average base annual funding expectation of $400,000 was set.

As to tourism marketing funds remaining as the final five months of FY22 approach, those were cited at $408,457 “Funds remaining January-June” versus “Remaining FY22 January-June expenditures” of $317,428, leaving $91,000 (actually $91,029) in “Proposed funds to roll forward into FY23”. But while money and how it is to be spent regarding staffing, advertising and marketing, putting on events and festivals, and Visitor Center services and programming were a concern, as noted above, things escalated when the draft Town-County MOA review began.

That draft document set the groundwork for the coming debate over a path forward. It traces the municipal desire for a joint tourism effort, leading to the creation of the Joint Tourism Committee (heretofore referenced “Committee”), and in turn a competitive bidding process for the recruitment of the Destination Marketing Organization (DMO) which became JLL. “The procurement method was competitive negotiation, pursuant to the Virginia Public Procurement Act, where the Town solicited and subsequently publicly contracted with the DMO. While the County was assigned fiscal responsibility, both Parties equally appropriated and contributed to the payment upon Committee approval.”

Okay, everything in line, by code, and agreed upon – what could go wrong?

Page one of the Joint Tourism MOA – everything seems in place. Uh oh, from the top of page 2, below, with the advent of a 501c6 non-profit to essentially take over all tourism authority and operational decisions, not to mention the “Discover Front Royal” brand, the discussion got interesting and lively.

The following paragraph of the MOA states: “Presently, all appropriations, roles, and responsibilities of the Committee and Parties shall remain until a 501c6 non-profit organization titled Discover Front Royal is established by the Committee.” – It would seem the passage: all appropriations, roles, and responsibilities of the Committee and Parties shall remain until a 501c6 non-profit organization titled Discover Front Royal is established followed shortly by “Once the non-profit is created, the Committee shall dissolve” unleased the “what will we have created” debate, with the intensity of a discussion with Dr. Frankenstein just before he directed the electricity through his “Big T” – I mean “Big Boy” creation. However, “Big T” versus “Little T” tourism events, Big T being the larger events seen as the province of the outside contractors, versus smaller, local community events geared toward the local population was viewed as a potential battleground of authority and emphasis of future tourism efforts.

“Bad governance, BAD GOVERNANCE – You do not give away power that belongs to the people to somebody you can’t fire!” Scott Lloyd said loudly as voices began rising at the same time. – “You don’t do that. It’s a bad idea,” Lloyd offered.

“It sounds like you want to run tourism still,” McFadden injected, leading Lloyd to disagree: “NO, I want to hire a contractor whom we can fire when they’re doing a bad job,” he countered. “We did hire a contractor,” McFadden pointed out of JLL, whose efforts coupled with the Joint Tourism Committee’s, currently leads a path to the creation of the non-profit 501c6 that will according to the top of page 2 of the MOA, lead to the dissolution of “all appropriations, roles, and responsibilities of the Committee and Parties (the Town and County).

Letasha Thompson, top right center, makes a point about the chosen path of future joint tourism promotion being contracted out of the town and county municipal governments’ hands. Below, Interim Town Attorney Jim Cornwell, masked and hatted in foreground, was an interested observer to Scott Lloyd and Amber Morris’s collective left, in his first public council meeting appearance. Cornwell offered some legal observations over points of concern in some documents reviewed, as at the 1:10:40 to 1:11:30 mark.

However, Letasha Thompson had countered that ending municipal control of tourism was the path chosen when the current system was chosen over the in-house Town operation during the tenure of Interim Town Manager Matt Tederick’s “right-sizing”/downsizing of the town government departmental apparatus. “That’s how we got here. So, we were told essentially that we don’t want government doing the tourism … that shouldn’t be our thing. Okay, we get out of it; we should outsource it because then we’re taking … government out of it. Then we outsource it, now you’re like, ‘No, no, no … We’re not getting (expert) people in here for less than a hundred-and-eighty-thousand dollars,” Thompson countered of Lloyd’s stance.

This escalating and emotional discussion begins around the 50-minute mark of video with exploration of financial variables; but begins to pick up steam about 58 to 60 minutes in, adding additional steam at the 1:08:25 mark when in reaction to McFadden’s suggestion that “While I hate to say it – we need to find some compromise on it or just kill the whole thing,” Morris responds, “Kill it, kill it.”

See this stirring discussion in the wake of the JLL PowerPoint presentation, along with staff presentations on the proposed $48-million Town FY23 Budget proposal in this exclusive Royal Examiner video.