MN Hospitality Advocate

Charlie Cook Provides 2010 Election Insights

Posted in Elections, General Advocacy, Uncategorized by hospitalityminnesota on November 20, 2009

I’m at a conference for state restaurant association executives (Council of State Restaurant Association Execuives – CSRA) and we had the privilege of kicking off the event with remarks by well-known political pundit Charlie Cook.

Cook said the 2008 election presented the perfect situation for Democrats. Key in the election, independent voters swung Democratic by an 18 point margin. He likened the environment to that of a well-cared for greenhouse in that election. But in 2010, Cook points out that the greenhouse has blown away and winter is arriving for the Democrats. The question is how powerful will that winter storm be?

Conditions favoring Republican gains in Congress include the following:

  • a terrible economy (most Americans still don’t believe we are out of the recession)
  • high unemployment that is likely to remain so (we’ve lost 50% more jobs in this recession than in a ‘normal’ recession). It will likely remain in double digits through the year and 12 consecutive months of double-digit unemployment is bad for any party.
  • 4.3% of homes are in foreclosure and 8% are delinquent and for 32% of homeowners their loan is upside down (loan is greater than the value of the home).

While Americans aren’t likely to blame President O’Bama solely, each day that goes by he owns more of the problem and people wonder why the President’s policies aren’t working, Cook said.

Those key independent voters who were strongly Democrat are now moving Republican. “They are wondering if this is the cruise they signed up for,” said Cook. They continue to like O’Bama but not Democratic leadership in Congress.

The signs are there for major issues in the coming election for Democrats. “Danger Will Robinson,” said Cook.

Despite reading these tea leaves, Cook said it’s unlikely that Republicans will take the majority in the Senate. In the U.S. House, a 12 to 25 seat flip is possible, but it will be a challenge to swap enough seats for Republicans to take control.

The Republican party still has a high unfavorable rating and brand identity problems. Of course, much can happen in 12 months.

Cook predicts that health care reform will ultimately pass, but that the Democrats have used a great deal of political capital in passing the bill. “I think they read too many of their own clips,” Cook said, and suggested that O’Bama’s decision to pursue health care reform in this economic environment was a major strategic blunder.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations

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Democratic House Leadership Releases Health Care Bill

Posted in General Advocacy, Health Care Reform, Lodging Issues, Restaurant Issues, Uncategorized by hospitalityminnesota on October 31, 2009

House Democratic leadership released its new version of health care reform Thursday, with debate to begin on the House floor next week. A vote on the Affordable Health Care for America Act (H.R. 3962) is possible next Friday, Nov. 6, but Majority Leader Steny Hoyer (D-Md.) has also advised representatives that votes could be possible on Nov. 7, 9 and 10.

The National Restaurant Association remains focused on a small business exemption, part-time worker exclusion, protection of ERISA, a 90-day grace period for new hires, as well as a favorable modification of the definition of a “full-time employee” from someone who works more than 30 hours per week on average, to someone who works more than 390 hours in a calendar quarter (13 weeks). We have developed a summary analysis of the new House bill which provides further information on these areas of focus.

In the Senate, Majority Leader Harry Reid (D-Nev.) sent a public option provision to the Congressional Budget Office for scoring this week. It will take at least another week before he will receive a response and be prepared to release the Senate text. Leader Reid does not yet have 60 votes for a bill and conversations continue with moderate Democrats about the bill.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations

Legislative Agenda – We Play Defense

Posted in Lodging Issues, Resort Issues, Restaurant Issues, State Laws, Tourism Issues, Uncategorized by hospitalityminnesota on October 26, 2009

With the state facing a projected $7 billion budget deficit, and the DFL party handily in control of both the House and Senate, it’s likely that most business groups will be playing defense this coming legislative session.

While we would like to achieve a sales tax exemption on capital equipment, or employee meals, for example, it’s highly unlikely given that the state has no money.

We’ll be firming up this legislative agenda in the next several weeks as we prepare for our new session in February. The Minnesota Restaurant Association has gathered feedback through a series of regional meetings and will be conducting a legislative survey of members shortly.

The Minnesota Lodging Association has been working closely with the Minnesota Association of CVBs on lodging tax issues, which appear to be its key issue in the session ahead.

The Minnesota Resort and Campground Association is looking at issues such as vacation home rentals, shoreland management, school levies and property tax rates.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations

Business Day at City Hall a Major Success

Posted in City Council, General Advocacy, Restaurant Issues, Uncategorized by hospitalityminnesota on October 13, 2009

Last March, Travis Bunch, Government Affairs Director of the Minneapolis Regional Chamber of Commerce attended our Hospitality Day at the Capitol. Travis was impressed with the event, and it occurred to him that he could port the overall concept to a Business Day at City Hall.

He brought together a wide coalition of business associations as an advisory group and we set about planning the day. The Minnesota Restaurant, Lodging and Resort & Campground Associations were among those asked to serve on the planning team. The work of that planning task force culminated in a very successful Business Day at Minneapolis City Hall on September 25. Some 200 Minneapolis business folks were on hand for a general session with the Minneapolis City Council followed by breakout sessions organized by topics.

Minnesota Restaurant, Lodging and Resort & Campground Associations’ Executive Vice President led the breakout session with Council President Barb Johnson discussing regulatory affairs. Several members of the Minnesota Restaurant Association were on hand to discuss the impact of regulations on their business. Other members attended the breakout session on health issues, which included a robust discussion of the menu labeling concept and allergen awareness.

We now hope to make Business Day at City Hall an annual event. And as far as Travis can tell, no other city’s Chamber of Commerce hosts a similar event. It is noteworthy that the Greater St. Paul Area Chamber of Commerce attended, and is giving consideration to a similar event on its side of the river.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations

Industry Prepares to Fight Allergen Ordinance

Posted in City Council, Restaurant Issues, Uncategorized by hospitalityminnesota on October 5, 2009

Early this past summer, St. Paul City Council member Melvin Carter had a very unfortunate experience with a clerk at a retail establishment in St. Paul while trying to find out whether the popcorn sold there was popped in peanut oil. Council Member Carter has a daughter who suffers from a severe allergy to peanuts.

Ultimately, he found that the product was produced with peanut oil, and thus did not purchase it for his daughter. But this frustrating experience led him to the conclusion that “there ought to be a law.”

Approximately 2% of the adult population and up to 8% of the youth population suffer from food allergies. There are eight common allergens as well as other food products that can affect customers.

Councilmember Carter Drafts an Ordinance
As a result of his experience, Council member Carter drafted an ordinance and then brought together a task force of affected groups and individuals including the Minnesota Restaurant Association, suppliers, parents of kids with allergies, the St. Paul Area Chamber of Commerce, health inspectors and the FDA. The Restaurant Association and Chamber then brought together a broad coalition of related industry groups to work with the Council member and seek a solution.

We talked at length during meetings about the complexities of the restaurant industry supply chain. We talked further about the fast pace in an industry kitchen and the difficulty of insuring that a product is not cross contaminated in any way residue from an allergen. We talked about the importance of parent and personal responsibility. And we talked at length about the litigious society in which we live and the increased liability risk that occurs with mandates in this area. We talked a great deal about creating a false sense of security for customers and agreed that the most important conversation is that which can occur between the owner or chef and the consumer. Finally, we suggested that St. Paul does not want to make itself an island and that any initiatives in this area should be statewide.

Industry Proposes Extensive Voluntary Effort
Instead of industry mandates, we proposed an extensive industry awareness campaign, not only in St. Paul, but statewide. We agreed to bring together a powerful and committed coalition of industry players and to engage energetically in the effort. We felt that this, combined with education provided to consumers, would be the most effective and appropriate way to address the issues that this portion of the population faces.

The initial efforts toward an industry awareness campaign are included in this packet. These reflect just a beginning, as we are willing to do even more on a voluntary basis. We believe that awareness and education are the keys to addressing this issue. We further believe that industry should be provided the opportunity to do so on a voluntary basis before mandates are issued.

We Cannot Reach Agreement
The task force and industry meetings occurred with Councilmember Carter some seven or eight times. We thank Councilmember Carter for listening to our industry, and regret that he remains convinced a city mandate is necessary. It is not every day that in industry as large as ours (third largest employer behind government and health care) comes to the table willingly, engages productively in the conversation and commits to a voluntary effort of the magnitude we have proposed.

It certainly seems appropriate to give the industry a chance to show what it can do prior to mandates being issued. This is a basic tenet of our philosophy – that government regulation ought to be applied sparingly, when necessary and when a broad swath of the public is affected. In this time of severe economic challenge, to add mandates, which add costs and increase liability risks, and to do so in one community thereby making it less attractive for one of the major job creators in the state, does not seem prudent.

While Council member Carter morphed his original proposal into several iterations, the key issues remain. Chief among these is a liability risk that our legal counsel firmly believes increases once a city mandate is issued.  This is echoed by one of the major insurance companies that writes nearly 20% of its business in the restaurant market nationwide, including Minnesota.

In the end, we have agreed to disagree. We stand by our pledge to initiate an energetic and sincere industry effort voluntarily. But we do not believe it is in the best interests of the City of St. Paul, patrons with allergies or St. Paul’s restaurants to pass mandates in this arena.

Restaurants Are Already Addressing this Issue
It should also be noted that restaurant operators respond to requests from customers on a daily basis regarding allergens and a wide range of dietary needs. The industry is already moving toward greater awareness here. Some restaurants have recognized those with allergens as a powerful market and are catering specifically to it. Examples include Davanni’s, Pizza Luce and Heartland Cafe.

We are contacting St. Paul city councilors to share our position on this issue and hope we can convince them of our sincerity with regard to a voluntary program, and the challenges and damage a city ordinance will cause.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Associations

Industry Impacts Outdoor Seating Charges

Posted in Uncategorized by hospitalityminnesota on September 25, 2009

The Metropolitan Council assesses and implements what are known as Service Availability Charges (SAC) on restaurants throughout the seven-county metropolitan area. These one-time charges are assessed on businesses to provide access to the regional sewer system. While the Metropolitan Council determines the SAC charges, it is then up to the individual cities to in fact assess and collect the charges.

We learned recently that many cities in the metro area had not been assessing the SAC charge on outdoor seating, which was counter to the Met Council’s understanding of the charge. Upon auditing the cities’ efforts with regard to the SAC charges, Met Council realized this and began seeking to have the cities assess the charge, which is $2,000 per every eight outdoor seats. In some cases, this “new” charge was reaching $40,000 or more.

The Minnesota Restaurant Association joined with a number of other metropolitan businesses to protest the outdoor seating charges. We testified before the council on September 9, as did the cities of Minneapolis and St. Paul themselves. We were successful. Starting October 1, the Metropolitan Council will reduce the outdoor seating SAC charges by 75%.

At the hearing, we pointed out that seating outside simply displaces patrons who would otherwise be inside. In other words, the outdoor seating doesn’t add usage, but moves existing usage from inside to outside. Further, we pointed out that many days of our short summers are unusable due to bad weather and bugs.

The fees go toward capital expenses for the region’s inter-city sewer system. Charges are based on sewer capacity, or how much the system must be capable of handling at peak moments. The formula for restaurants calls for them to pay the SAC charge of $2,000 per eight seats both inside and out. It’s a one-time fee paid when a space is expanded or built.

This fee reduction is a tremendous victory. For example, Terry Keegan closed the patio last year on his Keegan’s Irish Pub to avoid a $7,200 SAC. With the reduction, Keegan intends to reopen the patio next year.

Many of those who testified at the hearing outlined the importance of outdoor seating. It adds to the ambiance of the city. Patios also make the city safer as patrons keep their eyes open for nefarious street activity.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Assocations

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National Restaurant Association Launches Health Care Site

Posted in Lodging Issues, Resort Issues, Restaurant Issues, Uncategorized by hospitalityminnesota on September 4, 2009

As we’ve conducted sessions around the state, it’s clear that health care reform is very much on the mind of small business owners. They are fearful they will be mandated to provide coverage, or face penalties if they do not. Not a one that we’ve talked to doesn’t want to provide the coverage, but the issue is cost.

To gain more information on key health care principles for the restaurant industry, see the National Restuarant Association’s new site at http://www.restauranthealthcarereforminfo.com/page.asp?content=startpage&g=nra_hcare

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Assocations

PCI Compliance and Data Truncation

Posted in Lodging Issues, Resort Issues, Restaurant Issues, Uncategorized by hospitalityminnesota on September 4, 2009

We received a call this month from a restaurant operator who is facing a class action lawsuit for failing to remove the expiration dates from the credit card receipts he provided to patrons. This is a very serious situation. A reminder here to all restaurant, lodging and resort and campground operators — your credit card receipts must truncate the number (revealing only the last four) and cannot contain expiration dates.

Your point of sale system vendors can likely help you with this conversion if you are not presently in compliance. Our advice is to get on this right away. Check the recently mailed Annual Law Review for more information about PCI compliance and credit card data. The Law Review can also be viewed online at our member website, www.hospitalitymn.org in the government affairs section.

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Assocations

New Statute Regarding Pharmaceutical Reps

Posted in Restaurant Issues, State Laws, Tourism Issues, Uncategorized by hospitalityminnesota on September 3, 2009

During our Kitchen Cabinet meetings, we’ve learned of a new statute apparently passed this most recent legislative session that limits the amount of money pharmaceutical company sales representatives can spend on doctors in a given year to $50. We are told there is a further limitation on the amount spent per day or event on a doctor.

This has had an immediate and perhaps unintended consequence for Minnesota’s restaurant industry. We have been amazed to learn the large number of restaurants across the state that used to gain business from these pharmaceutical reps who have seen that spigot essentially shut.

As a result, fewer meals are being purchased for these doctors and others at restaurants and the state is collecting substantially less tax revenue from our industry. The law couldn’t have come at a worse time – Technomic is one of the leading forecasters for our industry and reports that this is the worst environment for restaurants since they began tracking some 30 years ago.

We’ll look into this new statute and see what action might be taken to help our state’s restaurants regain this business. The reps will spend the money somewhere, why not here in Minnesota?

David Siegel, CAE, IOM
Minnesota Restaurant, Lodging and Resort & Campground Assocations