Budget amendment cuts Envision Greater Fond du Lac funding

Heather Graves

Staff

October 17, 2023

FOND DU LAC – For the first time since its inception, it’s likely that Envision Greater Fond du Lac won’t receive an annual contribution from the City of Fond du Lac – the result of a budget amendment approved by City Council last month.

“This (elimination of funding) is not something that’s going to cripple our organization, but it’s certainly a blow to our relationship – and that’s the most disappointing part,” Joe Venhuizen, vice president of membership and resource development at Envision Greater Fond du Lac, said.

The city cites a lack of “return on investment” in regards to economic development for the funding cut.

“I can’t in good faith be giving this funding – which is taxpayer dollars – (to Envision) if we’re not seeing the results I think we need from it,” Council Vice President Tiffany Brault, who voted in favor of eliminating the funding, said.

The issue at hand
Envision Greater Fond du Lac was formed in 2017 when the former Fond du Lac Area Association of Commerce and the former Fond du Lac County Economic Development merged.

Since then, the city has allocated $10,000 to Envision for its chamber membership, as well as $65,000 to support economic development.

During last year’s budget cycle, however, the Fond du Lac City Council voted to cut that funding in half – allocating $32,500 to Envision and contributing the remaining funds to Downtown Fond du Lac Partnership – an organization focused on bringing people, activity and business to the city’s downtown.

The proposed 2024 budget included an allocation of $50,000 to Envision – $10,000 for the city’s chamber membership and $40,000 to support economic development.

Envision Greater Fond du Lac is located at 23 S. Main St., Suite 101 in downtown Fond du Lac. Submitted Photo

However, at the council’s 2024 budget meeting Sept. 20, Council Member Patrick Mullen proposed a budget amendment that would eliminate the economic development portion of the funding ($40,000) and instead add it to the city’s general economic development fund.

The amendment passed with a 5-2 vote.

Economic development expertise
Mullen said his reservations with allocating funds to Envision is “I haven’t seen much in the way of economic development from that arm of Envision.”

“I mean, they do great things – the chamber does great things,” he said. “But, the vice president in charge left last year. They hired someone new who only stayed four months. Joe Becker left, and they haven’t replaced him. When they get their act together, I’m happy to cooperate with them.”

Brault said she hoped that shrinking the amount allocated last year would “spur more progress within the economic development arm of Envision over 2023, so we could consider restoring that funding to them in 2024.”

“Unfortunately, we have not seen the results we expected,” she said. “As Mr. Mullen pointed out, there are some concerns about what kind of economic activity Envision is doing.”

Brault said it is the responsibility of the council to be stewards of taxpayer dollars.

“If we are being responsible in spending our tax dollars, we need to ensure we are getting results,” she said.

Some of her concerns with Envision, Brault said, involve what she sees as a lack of expertise in the area of economic development.

“Like Council Member Mullen said, currently, Envision doesn’t have a person in the position that’s really leading economic development,” she said. “They don’t have a person that has the expertise to really be doing the economic development activity we need.”

In a time when unemployment is so low, Brault said, that type of expertise is a crucial part of the puzzle.

“Employers are having such a hard time finding employees – we need to get moving,” she said. “And if that’s not currently happening through Envision, I feel like that’s not the most crucial place to be putting those dollars.”

Venhuizen said the attempt by City Council to segregate certain individuals on the team “is a ploy to try to drive a wedge in our organization and pick apart departments.”

“Envision has one strategic plan as a combined organization,” he said. “So, our team members bleed over into multiple functions because we’re a high-performing unit. There’s so much under one roof, and that’s the way it was designed.”

Envision Greater Fond du Lac, Venhuizen said, was designed this way by the business community, the City of Fond du Lac and Fond du Lac County, as well as other partners from public and private organizations.

“(They) came together and said this is a model for success,” he said. “That’s one of the troubling things about this council – they don’t really have that historical perspective to see that. This is the tool we’re supposed to be using for our joint success, and the city was one of the champions in this effort.”

Differing definitions
Venhuizen said part of the disconnect between Envision and the City Council is differing opinions on what economic development is.

“I think the way economic development is defined has to be mutually understood – and right now it’s not,” he said.

Economic development, Venhuizen said, is always changing.

“Notably missing from any critique of (Envision by) the city council was any of our impactful work on workforce development – because it’s the largest pain point for businesses and the largest inhibitor of business growth,” he said.

Venhuizen said Envision’s work in workforce development through the K-12 system, post-secondary and its attraction and retention efforts of workforce are all economic development.

Joe Venhuizen

“And the city cannot replicate that within its community development department,” he said.

The other notable missing aspect of City Council’s conversation – which is a huge thrust of Envision’s work – Venhuizen said is entrepreneurship services. 

Year to date, Venhuizen said Envision’s Small Business and Entrepreneurship director has already served more than 130 entrepreneurs and assisted in a couple dozen startups.

“The majority of those are in the City of Fond du Lac,” he said. “That was conveniently missing from their critique. I don’t know if they’ve forgotten about that important role we play, or if they’re just ignorant to that fact – but it’s certainly valuable workforce development or entrepreneur development that’s happening in the city and the tax base benefits.”

Mullen said there has been tension at Envision since 2017, when it combined the chamber function and the economic development function. 

“Those two, while there are synergies occasionally, there are also instances like childcare, like the diversity, equity and inclusion where the desires of the chamber members overrule the economic development part,” he said. “So, the economic development part has always been second to the functions of that.”

Childcare, workforce efforts
Brault said she’s also been disappointed with Envision’s work with childcare.

“I want to be real diplomatic here,” she said. “I think there are some great people working at Envision. I think they’re committed to what they’re trying to do… But while Envision has offered to take the lead on these issues and facilitate conversations, we have not seen the action and leadership our community needs.”

Brault said the Childcare Task Force – which brought together people from across the business community, local government and nonprofits – is down to four members. 

“There’s one member of Envision, who has been very active with us, then it’s myself and Angela, who spoke to us at our last meeting, and then the city administrator of Waupun,” she said. “And if the four of us weren’t committed to this cause, there would be no action being done on childcare in our county right now. So, that’s been frustrating.” 

Venhuizen said that, unfortunately, struggles with childcare are happening in communities throughout the country.

“I’d love to see a county in the United States that feels they have solved the childcare issue,” he said. “Unfortunately, it’s pervasive. It’s a broken system, and there are no easy solutions.”

That doesn’t, however, Venhuizen said, diminish Envision’s resolve.

“We’ll continue working with employers and with public partners, both at the local and state level to address the issue,” he said. “But there’s complexity. There’s a lot of differences of opinion and even our own State Legislature is battling this out.”

Venhuizen said in his opinion, the State of Wisconsin has to take a firm stand on its approach to childcare.

“And that will then bleed down into the way we can maneuver for success at the local level,” he said. “This is a problem for all communities. All chambers across the state that I’ve talked with who are engaging with this issue, are hitting similar roadblocks because it is a great challenge.”

Looking for improvement
Council Member Kenneth Cassaday said the decision to eliminate the city’s contribution to Envision this year doesn’t mean it can’t allocate funds to the organization in future years.

“Later on, if things change and there is an improvement, we can always increase the budget,” he said.

Brault agreed, saying this decision isn’t permanent.

“If we see improvements, that’s a great time to then have that discussion of should we be allocating more funding,” she said. “But I have a lot of trouble putting funding into something that currently, I don’t think, is working for our community the way it should be.”

Brault said she is also concerned with Envision’s lack of transparency.

Tiffany Brault

“We don’t hear from Envision,” she said. “We’ve never had them come before this body to present anything to us. And that is one of the things that troubles me about this funding is we don’t have any public oversight over what is being done with this funding.”

City Council President Keith Heisler said there are some performance benchmarks the city can hope for from Envision and readdress funding next year.

“Hopefully they can hit those,” she said.

Heisler said “keeping the money in-house” with the city’s community development department makes the most sense.

“We have so many wonderful projects that have been spearheaded by the city’s community development team, and we expect that to continue,” he said.

Mullen said it’s his job to spend taxpayer dollars effectively.

“When I look at our own community development – which, by the way, has a similar budget (as Envision) – we have all the work that’s done on Brooke Street, the creation of TIDs – we just approved one – north Main initiative, Riverwalk initiative, saving the Elks Club, redoing Dillingers – I mean, the list goes on and on,” he said. “I don’t mean to embarrass Dyann Benson (the City of Fond du Lac’s community development director), but, ‘you do a really good job.’ There has been a lot of return on that money.”

At the Sept. 20 special City Council meeting, Mullen, along with other members of council questioned what the contribution the City of Fond du Lac makes to Envision is being used for.

Fond du Lac City Manager Joe Moore said “all the money that goes into Envision is spent by Envision to support itself.”

“As you would expect – (because) it’s a nonprofit organization – it is not set up to make money,” he said. “About three quarters of its expenditures go for its people – in other words, its salaries. The other quarter goes toward the mortgage, the utilities – the cost of doing business, essentially, because after all, it’s an administrative organization. Money doesn’t go into Envision and then come out some other way. It’s there to make the organization function. So, there’s no mystery to it.”

Paying twice?
Mullen said because Envision receives funding from the county as well, he doesn’t feel comfortable asking city residents to, in essence, pay twice.

“The citizens of the City of Fond du Lac essentially pay twice for the economic development part of Envision,” he said. “We pay through our county taxes and then the city contributes more on top of that – the county gives them about $275,000.”

Patrick Mullen

Echoing Mullen’s point, Heisler said “approximately 40% of that support comes from city residents already.”

“Therefore, city residents in effect were paying twice for Envision’s services – once through the county contribution and once through the city budget allocation,” he said. “Paying for something twice rarely makes dollars and to me doesn’t make sense.”

Council Member Jane Ricchio, who voted no on the amendment, said she doesn’t agree with the “double dip” comments being used by other members of the council.

“There are all kinds of entities that both the city supports and the county supports – our schools, our roads, everything else – that’s just the way it is,” she said.

Venhuizen said while this makes for a “convenient talking point, it is also a faulty argument.”

“It’s a frustrating argument to me,” he said. “There are plenty of amenities, organizations and efforts that are contributed to by both the county and municipalities within the county. Economic development should be (one that receives support) by multiple entities.”

However, Venhuizen said it is also worth noting that “county property taxes do not go to support Envision Greater Fond du Lac.”

“We are supported through the county sales tax dollars collected… from residents, non-residents, everyone,” he said.

As a member of the City of Fond du Lac government and not a member of the Fond du Lac County government, Heisler said he doesn’t know how the county’s various revenue streams are collected and what they use to fund specific aspects of its budget.

“The 40%… was just an approximate number of City of Fond du Lac residents compared to the number of residents in Fond du Lac County,” he said. “I will… add for context that the reallocation by the council amounts to roughly 1% of Envision’s operating budget, according to our city manager who is an Envision board member.”

Fond du Lac County Executive Sam Kaufman confirmed that the contributions the county makes to Envision Greater Fond du Lac are supported by “sales tax only.”

The city, Venhuizen said, also received direct contributions from that same pot of money.

“The City of Fond du Lac receives almost $300,000 annually from that (fund),” he said. “So, the double taxation argument, I think, is a bit hypocritical.”

A ‘disheartening’ decision
Sadie Vander Velde, president and CEO of Envision, said if the budget is approved, the City of Fond du Lac will no longer contribute financially to the overall economic development work of Envision, a partnership that dates back to the days when the Association of Commerce and the Fond du Lac County Economic Development Corporation were separate entities.

“Envision Greater Fond du Lac and our predecessors were founded on the principles that public-private partnerships are vital to a thriving local economy,” she said. “No single organization can do it alone.”

According to Vander Velde, no other economic development organization in Wisconsin has a major municipality in its footprint that does not contribute to these efforts.

Vander Velde said the proposed cut is “disheartening.”

“Our community’s business leaders have concerns about the pattern of decision-making by the current City Council,” she said.

Council Member Thomas Schuessler, who opposes the cuts, said having served as president of a chamber in another community previously, he knows first-hand the importance of public-private partnerships – like the city had with Envision – are.

“This is too big of a blow, and I am not in favor of this,” he said.

Ultimately, Vander Velde said, it’s the citizens of Fond du Lac who suffer the most from this decision.

“Public-private partnerships are the most efficient way to achieve economic growth,” she said. “When a municipality chooses to go it alone, it slows the pace of progress and shifts more cost to the taxpayers.”

Sadie Vander Velde

Ricchio said she’s confused by the decision of some on the council, noting “I see no reason to reduce the funding.”

“It makes absolutely no sense to me,” she said. “I called it ‘capricious and arbitrary’ during the meeting, and feel the same way today. I see Envision as another important and vital partner to the city.”

Ricchio said the city should appreciate the existence of an active, local chamber.

“I want us to be mindful – we talk about partnerships with different people in groups in the city,” she said. “I, for one, am not comfortable with kind of spitting them in the eye.”

Ricchio said it doesn’t put the council in a good light by including the funding in the original budget proposal and now pulling it.

“This is like shutting the doors when the horses have already left the barn – I think it gives us a black eye,” she said. “I think it’s the wrong thing to do with a city partner.”

Venhuizen said the investment by the city represents more than just money.

“The relationship is the important part – trust between the public and private is how we pull strategy, resources and we work together toward our economic goals,” he said. “In absence of that, by withdrawing from that relationship, what the council is doing is putting the sole burden on the taxpayer… We represent the conduit through which public and private can interact and collaborate on strategy. Without being an active investor in that, it signals a very strained relationship or perhaps no relationship at all – and we all stand to suffer.”

Venhuizen said as an organization, Envision will “keep marching on.”

“We’re dedicated to our strategic plan,” he said. “We’ll continue doing the work we’re doing. Our staff will remain intact. This won’t have any impact on that. But it’s certainly disheartening for the future final act.”

Looking at the future of the relationship between City Council and Envision, Venhuizen said this is “pretty indicative of many local elected bodies who don’t put in the time to truly understand economic development or its value, how it evolves and how it’s best done.”

“This is something that will continue across many communities across the country,” he said. “But, it underscores, to me, the importance of having qualified, educated, common sense and business-friendly, elected officials.”

In an effort to support that, Venhuizen said Envision was one of the first chamber organizations in the state to offer a Running for Local Office preparation program.

“We’re going to continue doing that as a way to try to lower the barrier for folks to get into public office,” he said. “(We need to) do a better job of getting people who have a better understanding of economic development into those seats in government.”

Venhuizen said “because that matters.”

“We have seven people on a console that are making decisions that have much bigger ramifications than what people understand,” he said. “We owe it to ourselves to be better and to get good people in those seats.”

The program, Venhuizen said, is open to anyone interested in running for office.

“It’s certainly not just for people from the Fond du Lac area,” he said. “Nonpartisan office seekers from anywhere in the state that want to come can.”

Public hearing
The council will take a vote on the 2024 budget in its entirety following the public hearing.

Envision is encouraging business leaders, entrepreneurs, taxpayers and residents to attend a public hearing set for 6 p.m. Wednesday, Oct. 25, in the city’s Legislative Chambers (160 S. Macy St.) to advocate for the organization.

“We’ll be speaking during the public comments, as I believe will several of our supporters, our members and city taxpayers who don’t support this decision,” Venuizen said.

Those interested in commenting at the public hearing can do so in person or by Written Public Comment for Non-Attendance Public Participation Form which is available on the city government’s website.