A few residents, taxpayers, and even a couple Lansdale Council members, wanted to know what nonprofit Discover Lansdale has done, thus far, with its $275,000 in contributions from Lansdale Borough since 2012.
Instead of providing details, board member and secretary Richard Strahm rather reported last week at the Administration and Finance Committee meeting on what the nonprofit has done for Lansdale so far and what it plans to do in 2014, including hiring a part-time administrative staff member and developing a new website.
"We were invited to present to the administration and finance committee to give a State of Discover Lansdale talk, which is what we did. We were asked to justify the borough’s 2014 contribution and I feel we did so with our explanation of our expanding role with diminishing borough contributions," Strahm told Patch in an email. "This was not meant to be a budget presentation or any kind of audit report. It was a recap of our last year’s efforts and a look to the future regarding our events, initiatives and goals."
Discover Lansdale FinancesIn looking at the 2014 proposed Lansdale budget, the nonprofit spent $107,935 in 2012 out of a $150,000 startup contribution from Lansdale Borough. However, that figure, according to The Reporter, also came with expenses from the 2011 Founders Day billed by the borough to the nonprofit.
In 2013, Lansdale decreased its contribution to Discover Lansdale by $25,000 to $125,000. According to the 2014 proposed budget, Discover Lansdale spent more than that contribution, about 104 percent, ending up with a deficit, as of Oct. 31, of $5,777.
According to Strahm, Discover Lansdale spends, on average, $10,000 per event, like First Friday and Founders Day, for bands, staging, lighting, sound systems, promotion and the like.
However, borough finance director Brian Shapiro told The Reporter that that figure of $130,777 is incorrect, citing a journal entry error. Shapiro said the correct figure will show up in the final budget numbers, to be adopted by council Dec. 18.
When residents like Ed Scheuring and Nancy Frei asked about where their money went, Strahm and Discover Lansdale treasurer Charles Booz directed them to find the answers online in the organization's 2012 Form 990 filing with the IRS.
Strahm provided the form to Patch last weekend.
The form showed $127,912 in revenues in 2012, with $106,774 coming from contributions, $18,703 coming from program service revenue and $2,435 from membership dues from its seven members: at-large board member and Lansdale Borough Manager Timi Kirchner, council Vice President and nonprofit President Mary Fuller, at-large member and Green Street Luxuries owner Candy St. Martine-Pack, at-large member Mary Thompson, board Vice President and Minuteman Press owner Doug DiPasquale, Strahm, and Booz.
"Although the borough gave Discover Lansdale $150,000 in 2012, the figure on the Form 990 is net of funds we never received–charges for the 2011 Founders Day and other fees the borough had already paid," Strahm told Patch in an email.
According to Form 990, Discover Lansdale expensed $78,915 for "underprivileged children and elderly in the Lansdale community."
Of that figure, $11,886 went to professional fees for independent contractors, $4,200 to printing, publications, postage and shipping and $62,829 in other expenses.
Those other expenses include $57,953 in event expenses for 2012, $4,698 in insurance costs, $158 in office expenses and $10 in bank fees, per the form.
The overall deficit Discover Lansdale reported was $48,997. Add a net asset and fund balance of $15,100 and Discover Lansdale totaled $64,097 in net assets for the end of 2012, per the form. Those assets included $64,262 in investments, $125 in contributions owed and $290 in accounts payable liabilities.
Discover Lansdale listed no public support in its Form 990 filing. As a general rule, Discover Lansdale must list $5,000 or more received from any one contributor.
Lansdale Borough is listed as the sole contributor of more than $5,000 in 2012 with a contribution of $79,101.
Discover Lansdale Successes
In his report to committee last week, Strahm said Discover Lansdale was started to "galvanize and connect all sectors of our community by creating a unified movement that promotes, produces and maintains a clean, healthy, safe borough for our family, friends and guests."
"We are grateful for the support the borough has given us," Strahm said.
He said the borough supplied the nonprofit with $150,000 with the understanding that contributions would diminish over time.
"For 2013, we were given the challenge by borough council to raise our own funds in order to obtain the diminished borough contribution. In the presentation of October 2012, Discover Lansdale not only raised what it was challenged, but doubled that," Strahm said. "It shows just how far we have come in a short period toward being self-sufficient."
Discover Lansdale, he said, was started with an idea that energized Lansdale.
"Our First Friday events, Founders Day and other borough events that we assist with, like Bike Night, Lansdale Day and the International Spring Festival, we have brought thousands of visitors, consumers, vendors and media interest to the borough," Strahm said.
The $10,000 expense for every First Friday shows that it takes a lot to bring people to town and keep them coming back, he said.
"It produces thousands of dollars of revenue for local businesses and cements the idea that Lansdale is a destination, not just a town to drive through," Strahm said.
While the Founders Day fireworks display costs $45,000 to produce--which comes each year in the form of a donation--the money that Lansdale supplied did not begin to cover expenses. Discover Lansdale has raised money through donations, merchandise sales, and vendor and sponsor fees, he said.
"I want to point out that everything Discover Lansdale has done to this point was done with 100 percent volunteer help and work," Strahm said. "Volunteerism goes so far. As we grow and add new events, we understand the need for paid staff, and we will look at adding a paid support staff position in 2014."
He said the volunteers have worked tirelessly to put together events and a business plan to guide the nonprofit through 2013 and into 2014.
"Our business plan is set up in a similar fashion to many small businesses," he said. "We understand the necessity to have cash reserves. A business that spends its last dime is a business that is setting itself up for failure."
Strahm said the public can expect a new, robust, professional website in the first quarter 2014.
"We will undertake initiatives to expand advertising opportunities to decrease the need for borough support," he said.
Since Discover Lansdale's inception, Strahm said Lansdale has seen an improvement in many ways: Restaurants are packed and stores frequented on First Fridays and Founders Days, merchants' income generation is noticeable, calls are increasing daily from businesses looking to come into town, compliments pile up from people seeing how great it is to have the downtown thriving again.
"I see many people move to the borough and explaining they want to live here because of the proximity of things to do in the borough," Strahm said. "We've seen a lot of fewer empty storefronts. The investment of Discover Lansdale is paid back through continued economic development of the community."
Kirchner told the committee that Lansdale is not the first nor the last to invest in a destination organization like Discover Lansdale. She compared the efforts of both entities to the Kimmel Center in Philadelphia, and how Philadelphia played a part in its startup and how restaurants are building up around the center.
"It's just a part of what a municipality does to ensure people come, visit and play in that town and it can only increase the economic base of that town. It's not unusual for Lansdale to do what it's doing," she said.
Don't Call It a Main Street ManagerDiscover Lansdale's planned part-time administrative staff member won't take on the role of a "Main Street Manager," a term that was once used by the Commonwealth in its former funding of such a program.
Councilman Jack Hansen asked Strahm and Booz the future possibility of hiring someone "to oversee all the goings-on in Discover Lansdale as far as reaching out to entities to come in."
Kirchner said such a role is already filled by Community Development Director John Ernst. She added that the term "Main Street Manager" is extinct.
"The community development department is the basic economic development effort, reaching out to businesses and helping them in town," she said.
Strahm said the efforts are also put forth by the Economic Development Committee, of which he and Fuller are members.
Booz said in order to hire someone like that, Discover Lansdale would need to double its budget.
"We're not there yet," Booz said. "At some point, we would love to have more paid staff. We are looking for a part-time person to help us grow to get to the point to have more. It would not be titled 'Main Street Manager;' it would be something broader."
Strahm said he looked forward to being in the same room next year to talk about 2014 successes and goals for 2015.
"We hope we have grown and increased our revenue to the point where we have a full-time employee," he said.
At the council meeting last week, Councilman Rich DiGregorio Jr. urged Strahm to tell him what the money has been spent on thus far since 2012.
He was then criticized by borough council President Matt West for his grilling of Discover Lansdale.
"I don't really appreciate the making of a boogeyman, making it seem as though we're hiding things. It's rather disingenuous," West said to DiGregorio. "I wonder what your true motives are? Out of the entire huge borough budget, why Discover Lansdale? It's $100,000."
DiGregorio said it was $375,000 in three years. West said he could do the math on the budget.
"I'm curious, like a lot of people are curious, how the money was spent," DiGregorio said. "I don't think a lot of people know what the costs of the events are."
West said DiGregorio was trying to create a veil of secrecy.
"All of our members are members of the community, and it's not fair to them. They are a volunteer organization. We have made a commitment to this borough to this organization to do good things for this borough," West said. "It seems out of right field."