News-Leader: Tour of Missouri releases budget details

By Chad Livengood

In the face of growing criticism from Democratic Gov. Jay Nixon, the Tour of Missouri Inc. has released its 2008 and 2009 budgets as bicycle race promoters continue to lobby the governor to spare them from his budget ax.

The Tour of Missouri projected $3,784,000 in revenue this year and budgeted to spend $3,605,200, according to the budget provided to the News-Leader upon request.

Projected revenue was estimated at about $2.8 million from sponsors, including the state's $1.5 million share. Bicycle team participants are budgeted to pay $63,000, according to the document.

Nixon's Economic Development Department has recommended slashing the state's $1.5 million subsidy of the international sporting event less than two months before teams are set to race from St. Louis to Kansas City.

Nixon, a Democrat, has yet to make a decision on the Tour's fate, but a spokesman said Monday because of the timing of the race it will likely happen before other budget cutting decisions are made.

The governor has asked department heads to come up with $60 million in cuts to the state's $23 billion budget for the current 2010 fiscal year, which began July 1.

In Kansas City on Monday, Nixon told reporters he was concerned with the idea of turning over $1.5 million in tax dollars to the Tour of Missouri Inc., a nonprofit corporation that runs the race setup by Nixon's political rival, Republican Lt. Gov. Peter Kinder.

"There's also mental hospitals out there, there's also special need kids, but the bottom line is that we're very — very hopeful," Nixon told reporters, according to KCUR 89.3FM public radio.Tour of Missouri Inc.'s 2008 budget shows last year's race cost about $3.1 million and revenue was approximately $3.2 million.

How Tour of Missouri Inc. works

Tour of Missouri Inc. is a nonprofit organization created in January 2008 to run the professional bicycle race, which began in 2007.

It's executive director is Jerry Dowell, deputy lieutenant governor to Lt. Gov. Peter Kinder, R-Cape Girardeau. Dowell is not paid for his work for Tour of Missouri Inc., said Kinder spokesman Gary McElyea.

Stacey Blomberg, who works in the accounting department for the Division of Tourism, serves as Tour of Missouri Inc.'s treasurer.

Bob Smith, director of the Division of Tourism, provides her services to Tour of Missouri Inc. at no cost.

Smith estimated Blomberg spends 50-60 percent of her time doing work for Tour of Missouri, amounting to $20,000 to $25,000 additional state subsidy of the race.

Smith said that arrangement was set up by the Division of Tourism's former director, Blaine Luetkemeyer, who left the post in 2008 and was later elected to Congress, representing Missouri's 9th District.

Blomberg's gross pay in 2008 was $54,087.75, according to Missouri Accountability Portal,

The Tour of Missouri was started under the auspices of the Hawthorn Foundation, a quasi-governmental organization that generates private funding for economic development.

In 2008, Hawthorn Foundation transferred its ownership of the Tour's name, trademark and operation to the newly formed Tour of Missouri Inc., according to Rich AuBuchon, chief of staff and general counsel to Kinder.

At the time, AuBuchon was deputy director of former Gov. Matt Blunt's Office of Administration.

AuBuchon, speaking from prior experience and not for Kinder's office, said the Tour of Missouri Inc. was set up as a tax-exempt 501(c)(3) organization so that corporate sponsors could get a tax write off for underwriting the race.

Donors couldn't tget a tax write-off when they donated money for the race to the Hawthorn Foundation, which was created in 1982 by then-Gov. Kit Bond to supplement the state's marketing efforts to attract businesses to Missouri, AuBuchon said.

Every year, the Missouri Tourism Commission has approved subsidizing the race with tax dollars through the Division of Tourism, a wing of the Economic Development Department that the commission is supposed to have autonomous control over.

In order to get the money released to Hawthorn Foundation and now Tour of Missouri Inc., the Office of Administration has had to give the race operators a “single source designation," meaning they're the only corporation or organization that can provide the service, AuBuchon said.

A "single source designation" also means the state does not have to follow normal bidding rules because the corporation or organization is the "sole provider," AuBuchon said.

The Nixon administration has not taken action on the single source designation request.

Instead, Nixon's Office of Administration requested the $1.5 million for the Tour of Missouri be funneled through the state's advertising contractor, Hoffman Lewis in St. Louis.

Smith said the additional middleman was added to the process because the money is supposed to be used by Tour of Missouri for advertising and promotion of the race, which at least one economic impact study estimates up to 400,000 people watched last year.

“It’s a normal fit to go that way,” Smith said.

Smith said his department officially signed a contract with Tour of Missouri Inc. on Monday.

Kinder, the race's biggest promoter, serves as chairman of Tour of Missouri Inc. and the Missouri Tourism Commission and has referred to the race in public as "my bicycle race."

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