Tuesday, July 26, 2016

Are hidden fees costing your members?

A Wall Street Journal story (7/23/16) about hidden fees inflating home prices got me to thinking about the hidden fees in the cost members pay to participate in your event.

In many cases, cities and other government entities create these “add-on” fees/taxes to pay for “desired extras” (such as a new stadium) with the governmental body telling its citizens that “this won’t cost you anything; we’ll just charge our visitors.”

Here’s what your members are paying when they come to your convention:


  • If you have flown recently, you know the hidden fees (fuel surcharges, TSA fees, etc) and “extra” fees (baggage fees, food, etc.) that scale up your costs. 
Rental cars
  • Four “add-on fees” showing on a May 2016 rental car receipt totaled $58.71 which was 24.8% of the total bill. They included a “concession charge,” a “garage recoupment fee,” a “rental car facility charge” and a “vehicle license fee.” 
  • My St. Louis hotel bill this weekend included a 3.5% “hotel/motel” tax and a 3.75% “convention tax” ... making the fees a little over 7% of the room charge.
Perhaps associations should “steal the idea” from governmental agencies. Just think of it, you could add a “processing fee” to your member dues; or a “concession charge” to the conference registration fee.

Well, maybe not as our members may see that you are just trying to grab more money without raising your dues or registration fees!

PS.  If you don’t read the WSJ article, here are some of the added home fees they cited:
  • $3,500 for customized architectural plans for each lot
  • $8,000 for new type of storm water capture devise
  • Impact fees average $21,000 per home
  • $1,500 to $2,000 per unit in park fees


  • I forgot to mention one of the "worst" hidden fees at many convention properties:  the daily"resort fee."  
  • In just received my bill from the O'Hare Hilton's stay last night.  It had three "fees:" a state occupancy tax (11.9%); a city occupancy tax (4.5%); and a county occupancy tax (1%).  Total fees equaled 17.4%.

Thursday, July 21, 2016

Ted Cruz, Republicans & Association Law

NOTE: This is NOT a political statement nor political endorsement. Rather it is commentary on how political actions can showcase association issues.

Last night and again today, Republican Senator Ted Cruz – in speech and followup meetings – illustrated association board members who fail to abide by the Duty of Loyalty.

  • Meeting in Cleveland, the Republic Party nominated Donald J. Trump as its nominee to be President of the United States. Senator Cruz – a runner-up in the nomination process – spoke at the Republican Convention Wednesday night. He outlined his principles for presidential policies but “refused” to endorse Trump. In comments to the Texas delegate Thursday morning, he repeated his principles and added “it’s not my job to support the leadership team; it’s my job to support our principles.”
Has your association experienced such a rogue director?

I have and it is not easy. And, I find many association directors have no clue about their obligations under association law.

The Cruz case – like those of rogue directors – highlights a violation of the Duty of Loyalty.

Here’s the definition I have used in board orientation sessions ... it comes from several attorneys who specialize in association law:

Duty of Loyalty. 
  • The second fiduciary duty imposed on directors is one of loyalty to the association. Directors are required to make decisions based on what is best for the association, not what may be advantageous to their company or even to their constituency within the association--in other words, retailers as opposed to manufacturers or distributors.
  • Once the board of directors makes a decision, each director, even those who may have opposed the course of action chosen by the board, must act consistently with that decision. Disagreement is permitted, but director actions inconsistent with the board decision are not.
As I’ve led board orientation sessions for association boards, many directors “challenge” the duty of loyalty. They struggle when I say “if you remain violently (and verbally) opposed to the board’s decision, your only choice is to resign from the board.”

It is a hard choice but, for associations and corporations, it is the correct (and legal) choice.

In the case of the Republicans, the Duty of Loyalty means Senator Cruz should resign from the Republican Party. The same goes for a rogue association director who speaks out against association policy and direction.