City leaders scrutinize ad spending

July 2, 2014 • Local News

David Hayduk, president and CEO of HK Advertising of Santa Fe, shows promotional brochures his firm is working on to City Councilor Tabitha Denny after a City Council workshop Tuesday night. (Jeff Tucker Photo)


All 10 Roswell [auth] city councilors attended a workshop Tuesday night to review the city’s marketing and strategic planning, indicating the importance of the workshop to the city’s elected leaders.

The one person conspicuously absent was the city’s marketing director, Renee Roach.

City manager Larry Fry said Roach went on family and medical leave on Tuesday. Fry declined to state how long Roach would be away from work, but he said the federal Family and Medical Leave Act allows employees to take up to 12 weeks off work, without pay, while retaining their job positions.

The council and Mayor Dennis Kintigh met Tuesday to review the city’s advertising and marketing expenses.

David Hayduk, president and CEO of HK Advertising of Santa Fe, was on hand as well to explain how his firm spends city funds.

Since the 2011-12 fiscal year, the city has contracted with HK Advertising, with an annual base contract of $120,000.

However, the city has paid HK Advertising more than $120,000 each fiscal year of the contract.

In the city’s 2011-12 fiscal year, the city paid HK Advertising $138,977.

In the city’s 2012-13 fiscal year, the city paid HK Advertising $162,484.

In the city’s 2013-14 fiscal year, the city paid HK Advertising $174,330.

In total, the city has paid HK Advertising $475,791 since July 1, 2011.

The city has tentatively budgeted $296,813 for HK Advertising in its 2014-15 fiscal year, which began Tuesday.

The large increase this fiscal year is in part due to HK Advertising’s costs being carried forward from year to year, explained city finance director Monica Garcia.

Kintigh asked why the city was budgeting $120,000 to HK Advertising when the firm’s costs routinely exceed the base contract amount.

“For two years in a row, we have significantly exceeded the budgeted amount,” said Kintigh, who has questioned why the city needs both a marketing director and an advertising firm. “Why is that not the way we’ve budgeted this from the get-go?”

“We can do it differently,” said City Councilor Steve Henderson.

Henderson said HK Advertising has been responsive to special requests.

“Dave Hayduk has done a great job for us over the years,” Henderson said. “He’s been flexible in doing what the city would like to do. Over the years, we’ve looked at other vendors. Hayduk has done an award-winning job in advertising the city of Roswell.”

Fry said the city has paid HK Advertising in excess of the base contract for services other than those outlined in the firm’s contract with the city. He said the city has contracted with an outside agency for advertising for more than a decade.

At issue now is a request pending before the City Council to pay HK Advertising another $71,625 in the 2014-15 fiscal year.

The City Council postponed a decision on the allocation at its June 12 meeting, at which two citizens requested a workshop to delve into the city’s marketing and advertising expenses.

Roach, who earns an annual salary of $63,066, told the City Council in June the additional $71,625 is needed for projects above and beyond HK Advertising’s contract.

Roach said the Santa Fe firm needs $34,200 to create a 30-second TV ad, $24,600 more to produce a mobile app for travelers, and $12,825 to update the city’s tourism website,

HK Advertising’s contract with the city states any additional expenditure of funds more than the $120,000 annual contract “is subject to any negotiations between the parties from year to year through the budget process.”

“At times, we’ve added to that $120,000 base for more services,” Fry said.

City Councilor Juan Oropesa asked if the $12,825 requested to update the city’s tourism website could be included in HK Advertising’s base contract.

“It could be included in the $120,000,” Hayduk replied.

Hayduk said the $12,825 requested to update the city’s tourism website is needed to upgrade the website to WordPress web software. He said reprogramming the website would take about 120 hours of work, estimated to cost $6,000 to $8,000.

Hayduk said he intends to put the project up for bids. He said the new software would make it easier to add content to the website.

“We can keep what we have, and update it as we go,” Hayduk said. “It’s not just as friendly for the marketing director to go in and change.”

City Councilor Caleb Grant asked if updating the website’s software falls within the bounds of HK Advertising’s contract.

“Yes, it could,” Hayduk said.

City Councilor Jason Perry said HK Advertising provides limited website services.

“It’s not an unlimited amount,” Perry said. “But something else has to go away.”

Hayduk told the city council Tuesday he could perform other services requested by the city without charging additional expenses. Doing so, he said, would mean his firm would reduce some of its other advertising and marketing projects currently performed under the contract terms.

Grant questioned the need to reprogram the website.

“I don’t think it’s very smart to purchase this for $12,000 and in six months it’s obsolete,” Grant said. “We know we’re going to have to upgrade it in six months or a year.”

City Councilor Tabitha Denny disagreed.

“I do think that we do need to upgrade that website,” Denny said. “I’m not 100 percent sure I agree with the $12,000.”

The City Council took no action Tuesday since the meeting was simply a workshop.

Hayduk, who showed up for Tuesday’s meeting equipped with media and brochures his firm is working on for Roswell, said he didn’t mind the scrutiny.

“It’s part of the process,” Hayduk told the Daily Record after the workshop.

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