To: Honorable Mayor and Members of Town Council
From: Trish Muller, Director of Finance
Casey Willis, Special Events Manager
Title
Ordinance: Approving the First Amendment to the 2016 Budget and Authorizing Changes in Appropriations for Year 2016 (Second Reading) [Special Events Fund]
Body
________________________________________________________________________________
Executive Summary
The Ordinance was approved on first reading on January 19, 2016 with a vote of 5 to 1 with no changes.
The purpose of this item is to present Council with an amendment to the 2016 Budget, which creates the proposed 2016 Special Events budget and potential revenue, as requested at the January 5, 2016 Council meeting.
This memo and Attachment B summarize anticipated programming, contract personnel and supplies and services expenditures related to the new Special Events programming that Council approved as part of the Special Events Strategic Plan.
Attachment C, meanwhile, outlines potential sponsorship, vendor booth, beverage sale, merchandise and ticket sale revenue for the events.
Council is being asked to approve a budget amendment ordinance (Attachment A) to accommodate setting up a new Special Events Fund and expenditures and revenues therein, to facilitate the launch of these planned events during 2016.
Discussion
As discussed at the January 5 Council meeting, one element of the Special Events Strategic Plan is activating venues in Town, including the amphitheater at Philip S. Miller Park. Toward this end, Special Events staff is planning 20 events in Castle Rock during 2016.
Staff believes these events will appeal to Castle Rock families and also create a regional draw to our community, accomplishing Council’s goal of bringing additional and higher quality events to Castle Rock. These events will also create an economic benefit to the Town and its businesses, which Special Events and Finance staff will be working to quantify, per the Special Events Strategic Plan.
The 20 events were developed in summer 2015 with a $200,000 budget in mind. Per Council’s request, a detailed budget that is broken down by event can be found in Attachment B. For each event, the anticipated programming (performers and other professional services), contract personnel (production staff) and supplies and services (marketing materials, decorations and other supplies) expenditures are broken out. A high-level summary of the anticipated expenditures for each series or event is as follows:
• Season of the Star - $39,000 to produce six free community events to drive the community Downtown again next holiday season, which is comparable to the 2015 cost for this program
• Scavenge the Rock - $3,000 to produce this one-day ticketed 5K and scavenger hunt that will encourage participants to interact with local merchants and other amenities
• Rocky Mountain Sports Festival - $20,000 to produce a weekend-long, multi-site, ticketed celebration to highlight more than a dozen different sports, along with Town venues
• Celebration Concert Series - $75,000 to produce five high-quality, ticketed concerts at the amphitheater at Philip S. Miller Park, featuring acts such as the Colorado Symphony and other well-known performance groups
• Downtown After 5 - $50,000 to produce five free concerts to bring people outside after work on Fridays for networking and entertainment, including food trucks
• Western Heritage Days - $5,000 to produce a free event that uses arts and crafts and concerts to highlight Castle Rock’s unique history and culture during the Douglas County Fair and Rodeo
• Harvest Festival - $8,000 to produce a free community celebration of the fall season
As indicated at the January 5 Council meeting, subsequent to the $200,000 budget being developed, staff identified a transfer from the Philip S. Miller Fund as the proposed funding source for a one-time investment in the Town’s new events initiative. The initiative has a strategic goal of becoming self-sustaining over time - mainly through the generation of ticket revenue and the securing of sponsorships. However, startup funds are needed in order to negotiate contracts with performers and other vendors so that the new events can be launched during 2016. These funds would act as a savings account, of sorts, for this new division to draw upon as needed as it builds the track record of successful events that will be needed to solidify the revenue streams it will require to operate in future years.
Attachment C is worksheet illustrating various levels of revenues that could be realized within the Special Events Fund, depending on the community’s response to the planned new events. The chart below shows each series or event’s production cost compared to its 50% revenue projection, which is the revenue amount proposed to be budgeted via the budget amendment. If revenues exceed the budgeted level, staff may request additional appropriations later in the year so they can be reinvested into the events. Otherwise, any revenues in excess of budgeted revenues would go into fund balance within the proposed new Special Events Fund.
|
Event |
Production budget |
50% revenue projection |
Cost to the fund |
|
Season of the Star |
$39,000 |
$12,500 |
-$26,500 |
|
Scavenge the Rock |
$3,000 |
$7,500 |
+$4,500 |
|
Sports Festival |
$20,000 |
$6,000 |
-$14,000 |
|
Celebration Series |
$75,000 |
$212,500 |
+$137,500 |
|
Downtown After 5 |
$50,000 |
$5,500 |
-$44,500 |
|
Western Heritage |
$5,000 |
$1,000 |
-$4,000 |
|
Harvest Festival |
$8,000 |
$2,250 |
-$5,750 |
|
TOTAL |
$200,000 |
$247,250 |
+$47,250 |
It is important to note that, while the total 50% revenue projection indicates the new events initiative could be profitable in its first year, based upon the proposed budget, that budget is not reflective of the entire cost of the events initiative. For example, the salary and benefits for the Special Events Manager and soon-to-be-hired Special Events Specialist are not included within that budget. Nor are funds for the services from other departments, such as Police, Fire/EMS and Public Works, that are required to produce special events.
In accordance with the strategic priority of the initiative becoming self-sustaining, as special events revenues reach closer to the 100% percent projection or even beyond, these additional events-related costs will be moved from their current cost centers into the Special Events Fund, so that the total cost of the Town’s special events operations is transparent to Council and the community. This is another reason that creating a Special Events Fund as proposed in the below motion is preferable - so that all costs related to events can be identified, accounted for and funded using the most appropriate revenue streams.
Budget Impact
The proposed one-time transfer from the Philip S. Miller Fund would have no sustainable impact to that fund, since funds of $208,156 were received in 2015 as a payback for the loan made to the Downtown Development Authority for Rink at the Rock. If the $200,000 is transferred as requested, that fund would have an estimated 2016 year-end fund balance of $180,989, as indicated in Exhibit 2.
The Special Events Fund, meanwhile, would gain the capacity to incur the expenses needed to produce the 20 events in 2016 at a cost of $200,000, while also anticipating revenues of $247,250 necessary to begin sustaining that fund to support special events operations into future years.
Staff Recommendation
Staff recommends approval of Ordinance 2016-04.
Proposed Motion
“I move to approve on second reading Ordinance 2016-04, an Ordinance Approving the First Amendment to the 2016 Budget and Authorizing Changes in Appropriations for Year 2016.”
Attachment
Attachment A: Ordinance - Second Reading
Exhibit 1: Town of Castle Rock 2016 1st Quarter Budget Amendment Requests for Supplemental Appropriation
Exhibit 2: Estimated Ending Funds Available for 2016
Exhibit 3: 2016 Proposed Special Events Fund
Attachment B: Ordinance - First Reading
Attachment C: Special Events Budget Worksheet
Attachment D: Special Events Potential Revenue Worksheet