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HomeMy WebLinkAboutItem 12a - City Events and DAIA Funding Request DATE: May 2, 2023 TO: Honorable Mayor and City Council FROM: Dominic Lazzaretto, City Manager By: Justine Bruno, Deputy City Manager SUBJECT: REPORT, DISCUSSION, AND DIRECTION REGARDING CITY EVENTS INCLUDING A SPONSORSHIP REQUEST FROM THE DOWNTOWN ARCADIA IMPROVEMENT ASSOCIATION FOR THE ANNUAL FOURTH OF JULY CELEBRATION CEQA: Not a Project Recommendation: Provide Direction SUMMARY Over the past few decades, community events have become an increasingly important offering of municipalities. Events can serve to attract visitors and generate tourism that boosts the local economy. Additionally, events provide space for residents to gather, connect, and build community. Local events provide numerous benefits, which is why Arcadia opts to support events both directly and indirectly. Over time, the type and scale of events offered in Arcadia has changed, but the desire to outreach and engage through community events has persisted. Recently, members of the City Council have contemplated the idea of expanding Arcadia’s event offerings. This presentation will allow the City Council to explore this concept further and receive important background information regarding current offerings and resource use for events. An overview of the type of events led by the City and the level of resources used in the production will be covered. Additionally, the potential impacts of adding new events and the feasibility of doing so will be explored. As part of this discussion, a recent funding request from the Downtown Arcadia Improvement Association will be raised for City Council consideration. It is important that both City-led and City-sponsored events be considered holistically, so the City Council can provide direction on their vision for community events going forward. It is recommended that the City Council provide direction regarding City event offerings, including the request for $20,000 in direct funding to support the annual July Fourth event/Patriotic Festival hosted by the Downtown Arcadia Improvement Association. Report, Discussion, and Direction – City Event Sponsorships May 2, 2023 Page 2 of 6 BACKGROUND Many of the City’s public-facing events are primarily led and funded by two departments: the City Manager’s Office and Recreation and Community Services. Other City departments may host public events, but not at a comparable frequency or scale. For City-led events, production costs entail the purchase of supplies and materials, staffing for the event, promotion and marketing, equipment rental, sanitation services, setup, tear down, and security. For discussion purposes, City events can be defined when there is public assembly for leisure, social, or cultural purposes, occurring on a one time or limited basis. Conversely, City programming can be defined as a set of structured activities geared towards accomplishing defined goals, occurring on an ongoing or habitual basis. Based on these definitions, some examples of current City event and program offerings can be delineated as such: City Event City Program - Community Bike Ride - Senior Bingo/Lunches/Dances - Mayor’s Breakfast & State of the City - Coffee with the Mayor - Snow Festival - Leadership Academy - Concerts & Movies in the Park - After-school programs - Trick-or-Treat at the Library - The Movies You Missed - Holiday Tree Lighting - Preservation workshops - Volunteer Appreciation Event - Storytime at the Library - Breakfast with Santa - Museum History Talks - National Night Out - Neighborhood Watch - Community Cleanup Day - Coyote Town Halls - Lunar New Year Luncheon - School Track Meets - Eggstravaganza & Teen Egg Hunt - Kids summer/winter camps The list above provides a snapshot of event offerings that are hosted and funded by the City, with the number of attendees ranging from a few hundred to a few thousand per event. For these events, the City serves as the lead agency and is responsible for all aspects of the event including the location, preparation, staffing, materials, supplies, ticketing, and cleanup. Events Expenses & Cost Recovery City-hosted events have variable expenses, with some costing as little as $4,000 as in the case of the Holiday Tree Lighting, up to $34,000 for the Volunteer Appreciation Event. Most City events do not seek cost recovery; however, for the handful of events that do (Mayor’s Breakfast and State of the City, Eggstravaganza, Breakfast with Santa, Nature Hikes, and Father-Daughter Dance), ticket sales and sponsorships offset between 35% and 78% of costs. What is seldom quantified in the event cost is the staff time invested in facilitating the event. Regardless of the event, there are always 1-5 salaried staff Report, Discussion, and Direction – City Event Sponsorships May 2, 2023 Page 3 of 6 members that help oversee and facilitate the production of the event, with their time unaccounted for in the expense totals. If salaried staff time was included in the event expenses, the event costs would increase by hundreds, if not thousands, of dollars per event. Cost Sharing on Partnered Events Historically, the City has partnered with private or other non-profit entities to bring more event offerings to Arcadia. Examples of these events include the Lunar New Year Luncheon with the Arcadia Chinese Association (“ACA”); the Halloween Haunt with the Downtown Arcadia Improvement Association; Law Day with legal partners and the ACA; and a Moon Festival with the ACA. For these events, the City and the non-profit split costs for hosting the event through in-kind and direct contributions. Outside Event Support Around 2015, the City Council authorized the City Manager to extend in-kind support to any event that advanced the goals of creating or expanding a sense of community, provided there was sufficient budgetary capacity and the support remained within the City Manager’s signature authority (which was $10,000 at that time). Since then, the City has increased its participation in community events hosted and run by outside agencies. Examples of these events include Police, Fire, and Public Works Services Department support for Downtown Arcadia Improvement Association events, like the July Fourth Celebration/Patriotic Festival and the Holiday Fair. Additionally, the City regularly supports events held at the Shops at Santa Anita, the Arboretum, and at Santa Anita Park. For events like the Derby Day 5k Run/Walk and the Festival of Bands, the City Council has specifically granted fee waivers for public safety services. In addition, there are community events the City assists with, but charges full cost recovery. An example of this is the 626 Night Market, where the organizers reimburse the City fully for police, fire, and medical support. New Funding Request – Patriotic Festival On March 9, 2023, DAIA President Erik Wahl, sent a letter to the City Council requesting monetary assistance to support the July 2023 Patriotic Festival. In its letter requesting funding, the DAIA asserted that due to the number of attendees the Patriotic Festival draws, a direct economic benefit for Arcadia, especially Downtown businesses is produced. In particular, $20,000 was requested to expand the time of the firework display, which costs approximately $2,000 per minute of fireworks. In the words of the DAIA, the additionally $20,000 would be apportioned in the following manner: • $10,000 toward the firework display for additional time (adding 3 more minutes) and a fuller experience; • $ 4,000 toward increased equipment rentals (stage, electricity, seating, tables, and accessible restrooms for the public); Report, Discussion, and Direction – City Event Sponsorships May 2, 2023 Page 4 of 6 • $ 3,000 toward increased security and safety measures; and • $ 3,000 toward additional advertising and marketing. The property owners in downtown Arcadia approved the creation of a Community Benefits District, named the Downtown Arcadia Improvement Association, in 2013. The City of Arcadia owns 5 parcels within the downtown area and, as a member of the DAIA, has paid $5,400 in assessments this Fiscal Year, which is about 4.2% of the DAIA’s total Assessment Revenue. Since its inception in 2013, the City has contributed an average of $5,600 each year, or approximately $56,000 thus far. During its formation, the DAIA created bylaws that limit how their tax assessment can be spent; specifically, the bylaws require that assessment revenue can be spent for the following purposes: • 48% for District Identity & Branding; • 27% for Program Management; • 21% for Sidewalk Beautification and Improvement; and • 4% for Contingency. While the DAIA maintains the ability to modify their bylaws and adjust revenue allocations, the 48% earmarked for District Identity & Branding is primarily used to fund Downtown events. With this 48% cap on event spending, a maximum of $62,300 of the 2023 assessment could be allocated to fund Downtown events this year. According to the DAIA, the bylaws are constraining event funding considering the Patriotic Festival, with a budget of $62,000, consumes the entire events budget without accounting for the costs of the Halloween Haunt ($5,000 budget) and the Holiday Fair ($34,000 budget). DISCUSSION The City of Arcadia has long recognized the value of providing events for members of the public to enjoy. Community events help attract visitors to the City and showcase the quality of life in Arcadia. Local events also serve as a gathering place for community members to be entertained, learn more about Arcadia, and build connection. Understanding the continued value in providing events, the following questions for the City Council remain: Provide Direction on Current Event Offerings & Resource Use As a general rule of thumb, if the City were to put on a large-scale “signature event” for something like Lunar New Year or a Moon Festival, a budget of $40,000-$60,000 would be requested. Something could be provided on a much smaller scale at lower funding levels. One thing to note is that, based on current resources, the City would be unable to provide any new events without reducing any of the existing offerings or receiving additional Report, Discussion, and Direction – City Event Sponsorships May 2, 2023 Page 5 of 6 resources – specifically, an events coordinator position would be requested to oversee all community events that happen throughout the year. The fully burdened costs for a Special Event Supervisor that would oversee City events is estimated around $115,000 for salary, benefits, and supplies. Currently, the City directs and funds over 20 different events throughout the year. Funding City events costs about $155,000 annually, with the City recovering nearly 15% of those costs, for a net expenditure of about $132,000 annually. Staffing for City events involves both exempt and non-exempt employees but requires the assistance of 8-9 employees, on average, per event. Beyond City-led events, many departments assist non-profits and outside agencies by providing public safety, traffic control, and equipment rental services. This assistance is applied to larger community events like the Patriotic Festival, Halloween Haunt, Holiday Fair, Derby Day 5k Run/Walk, the 626 Night Market, the Arboretum Light Show, and the Geld Drop/Menorah Lighting. If the City Council would like to add more events to Arcadia’s existing offerings, more guidance is needed regarding the type of events the City should host, the level of funding to be allocated to support events, and whether any of the existing events should be discontinued in the place of new events. Funding Request for Patriotic Festival In addition to contributing to the annual assessment, the City has consistently helped subsidize DAIA events through in-kind services. The events held by the DAIA require Police, Fire, and Public Works Services Departmental assistance. While public safety costs are paid by the DAIA, Public Works Services and City Manager’s Office support is not, which accounts for another $8,000 - $10,000 of in-kind support annually. The Patriotic Festival budget for 2023 is $62,000, which is 47% of the Downtown’s annual assessment of $129,800. With one event comprising nearly half of the district’s total revenue, the DAIA has turned to fundraising and sponsorships to cover the difference. With the City’s $20,000 contribution, the City would be directly funding nearly one-third of the overall event in addition to the in-kind contributions and payments made to the DAIA as members of the District. The City Council should consider the precedential nature of this request. Without any long-term changes to the DAIA’s revenue stream or event spending, the City Council should expect similar requests annually. In addition, directly financially assisting this event may result in requests for direct assistance from other event organizers. In total, Arcadia provides the DAIA nearly $15,000 annually between the assessment revenue and the in-kind contributions for event support. Based on the information provided by the DAIA for the proposed use of the funding, it is recommended that City Council offer a contribution for a lower amount or consider waiving more of the affiliated public safety costs in lieu of a direct contribution. If the City were to participate in this Report, Discussion, and Direction – City Event Sponsorships May 2, 2023 Page 6 of 6 singular event at the requested level, it might be more appropriate for Arcadia to have a larger role in planning and organizing the event. ENVIRONMENTAL ANALYSIS The direction being sought is not considered a project under the California Environmental Quality Act (“CEQA”). Any future decision on City Council action related to City event funding and support will return to the City Council with an accompanying environmental analysis. FISCAL IMPACT If the City Council directs staff to add more events, staff will provide estimated costs depending on the scope and size of the event. Additionally, if the City Council would like to grant $20,000 to the DAIA for the Patriotic Festival, those monies would be fulfilled though the General Fund and added to the Fiscal Year 2022-23 Budget. RECOMMENDATION Based on the information and options presented in the staff report, it is recommended that City Council provide direction regarding City event offerings, including the request for $20,000 in direct funding to support the annual July Fourth event/Patriotic Festival hosted by the Downtown Arcadia Improvement Association. Attachment: DAIA Letter for Funding Request