Mayor Larson’s Email Answering Questions Critical Of Outsourcing Duluth’s Marketing
Thank you for your service and dedication to Duluth.
CAO Schuchman and I will be in attendance tonight at agenda session to answer questions on the tourisms action before you and we will be with Bellmont Partners on Monday to present as a Committee of the Whole.
Because this is new terrain it has understandably created a significant response. I thought this email might help address a few things before the council agenda session. Here are some of the questions you have asked me offline this week, in regards to the issue before you of recommendation of tourism advertising and promotional services:
Why go to RFQ /RFP:
· When we’re spending public dollars, it’s is in the best interest of good governance to have a public process for its allocation. You expect me and my administration to demonstrate value, competition and efficiency with every expenditure we bring to you. How we spend $2.2million in public dollars for professional services of this level of importance and expected impact merits this as well.
· No other expenditure of this size and importance is spent without competitive bid or with oversight outsourced to a private board
· It’s in the public’s best interest to pick the best candidate for any job, whether that’s a singular position or a professional service. Promoting competition through RFP versus selecting a pre-determined vendor is how the City achieves this – there is a specific city purchasing process that is consistent, governs this and was followed. The recommendation we are bringing forward does this for our city.
· The three-year contract for this service expired in 2020. 2021 is contracted for a single year and expires at the end of this year. For 2022 and beyond, the choice was either extend the existing direct vendor process or engage in the RFP. The City chose to RFP and in December of 2020 we informed Visit Duluth of the intent to RFP for 2022 and beyond.
What was “wrong” to begin with:
· Allocating millions of dollars in public funds without a competitive process is wrong. That’s on us as a city. We notified this intent to Visit Duluth eight months ago and publicly announced the process in May, five months later.
But what else? Was anything else going on behind the scenes?
· Yes and No. The relationship between the City and Visit Duluth is long, somewhat complicated and has periods of tension between the two partners. That is in and of itself a bit par for the course and absolutely no reason to engage in an RFP. However, professionalizing and de-personalizing the allocation process through an RFP sets an important emotional distance by which professional determinations get reviewed valued on their merits and compared with other vendors, rather than relying solely on channels of informality or personal relationship.
· The membership model of the organization is self-serving. That’s ok – that’s what member-based organizations do – serve their members. And a membership organization is very fair game. However, our tourism industry is bigger than a private membership and should be able to have access to the promotional and marketing possibilities made possible by public funds. In the past 18 months many entities who are not members have shared that they do not feel served and supported by the member model and do not get access to publicly funded promotional opportunities as a result. Public funds should be accessible to all entities, not just the ones who pay to access.
· On a regular basis, and out of contract cycle, we are approached by staff, and separately lobbied by board members, to invest more in marketing without a detailed plan to back up the request; several times we have requested information about marketing impact and were provided with a list of media buys, not a dashboard of metrics or KPI’s (which, to be fair to Visit, was not a contractual obligation, but still merits questioning in terms of customer communication and service).
· Each time we have requested additions through contract for new ideas to expand reach and vendors (tear off hotel maps, western corridor promotion, shared attraction pass) while they may have been implemented in practice, in theory were met with resistance and, we believe, under-prioritized. Again, while it makes sense that this relationship has some tension and there is back and forth, the City of Duluth is the client. Some of these concerns may have been able to be addressed through contract had Visit had won the award, but they did not.
Did you communicate with Visit Duluth in advance?
· Yes. The City and Visit meet somewhat regularly. Definitely more often at the start and end of each year. The City has a board member who attends all meetings, with the exception of this window of time of the RFQ and RFP process, when our attendance seemed not appropriate to me. General communication is regular although, I have learned, as many of you have to, that while one party feels there has been good communication, the other may not.
· Very specifically, CAO Schuchman and I met with Visit Duluth on February 27, 2020 to talk through our concerns.
· CAO Schuchman led a lengthy and time-intensive merger discussion with the Visit Duluth and DECC executive boards from September 22, 2020 to December 18, 2020. That discussion was specifically focused on the possible cost savings and efficiencies that could be found in a merger, as well as shared outcomes and measurements, and was initiated by me after discussions with the then-board chairs of each organization.
· I notified Visit Duluth on December 21, 2020 – nearly eight months ago – of my intent to issue an RFP for these services.
What about local:
· We do not RFQ or RFP by locality, we simply open the opportunity. Of 28 initial responses, 5 were from Duluth. Of the final 5 entities, 2 were from Duluth. The ability for this contract to stay local was made available and over-represented in the finalists. We chose the highest performer in the process.
· The recommended entity, Bellmont Partners, is a strategic, multi-platform communications team that has an impeccable track record of collaboration. They are eager to demonstrate that by partnering through paid relationships with talented, local creative vendors in a variety of ways and they are prepared to discuss this on Monday.
RFQ and RFP Process timeline:
· Public notice of intent to issue an RFP for these services on 12/21/20
· The request for qualifications was issued on RFQ was issued on 5/17/21
· Responses were due on 6/4/21
· First round of presentations for the short list of 8 candidates were held the week of 6/21
· The request for proposals was issued on 7/13/21 to 6 firms.
· Responses were due on 7/23. 5 firms responded.
· Final interviews conducted on 7/29 & 7/29.
· Decision announced on Tuesday, August 10
Legal requirements of tourism tax spending:
· There is no legal requirement (except for the current Visit Duluth contract for 2021) that mandates to whom the marketing and promotion funds must go. There are requirements for a portion of the tourism collection be spent on marketing – a requirement which would be met and exceeded with the proposed vendor.