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02-06-2001 - Invitation to Participate in 2002 Tournament of Roses Parade• . City of West Covina Memorandum TO: AGENDA Darnel G. Hobbs, City Manager And City Council ITEM NUMBER: G —1 DATE: February 6, 2001 FROM: Tom Hatch, Community Services Director PRINTED ON RECYCLED PAPER SUBJECT: INVITATION TO PARTICIPATE IN 2002 TOURNAMENT OF ROSES PARADE SUMMARY: The Pasadena Tournament of Roses Association has extended the City of West Covina an invitation to participate in the 2002 Rose Parade. A reply was requested by no later than January 31, 2001, but an extension has been granted until February 7, 2001. If the invitation is accepted, a $2,500 entry fee must accompany the reply. DISCUSSION: The Pasadena Tournament of Roses Association has extended the City of West Covina an invitation to participate in the 2002 Rose Parade. (See Attachment 1). In order to hold the place, a reply must be received by the Tournament of Roses Association by February 7, 2001. A $2,500 entry fee must accompany an affirmative reply. The entry fee is not refundable if the City Council decides not to pursue the project subsequent to paying the entry fee. The short timeline and need for a prompt reply has required staff to bring this issue to the City Council for consideration prior to the presentation of the final financial report for the 2001 Rose Parade Float event. The final financial report is scheduled for the February 20, 2001 City Council meeting, including a report from the Float Foundation. A draft of the financial status report is presented in this report. There are both advantages and disadvantages to participating in the parade. A breakdown of the key Pros and Cons are presented below: Pro • The Float is a popular event and many West Covina residents enjoy watching the parade and volunteering for decorating. • The City receives positive and wide coverage because the parade is a high -profile event. One estimate from Jack Kyser, Executive Director of the L.A. County Economic Develop Corporation, has the value of the television coverage for West Covina at $2.7 million if the City was going to advertise like a business. However, it is very difficult to know exactly what the economic value is for a city (See. Attachment 2). • The West Covina Tournament of Roses Foundation has been formed and has a plan for long- term fundraising. • The 2001 Float required significantly less staff time than previous years ($26,068 in 2000 and approximately $300 in 2001). Con • The net cost of the Float was $57,862 in 1999, $82;433 in 2000 and $103,957 in 2001 excluding City staff and transportation costs (See Attachment 3). • The City has many needs and the Float has not been prioritized against other needs. • The actual time that the Float is seen on TV is very short. • The Float still requires some staff time and other transportation costs. FISCAL IMPACT: Impact of 2001 Float The City Council authorized $120,000 from BIT Funds for the 2001 Rose Float. The following is a summary of the estimated actual revenues collected and expenditures paid for the project through January 31, 2001. There are outstanding revenues and invoices for service that will be reflected in the final report. I UUPITBRICSRVSDOCSISpecial EventslRose FloatWgenda Report 2-6 - Invitation for 2001.2.doc Estimate as of 212101 Revenue - ponsorships $ 7,831 Memberships $ 1,961 Summer Concerts $ 6,137 Miscellaneous $ 10 TOTAL $ 15,939 Expenditures Parade Entry Fee $ 2,500 Design and Construction of Float $ 100,000 Merchandise $ 1,850 Concert Program Expense $ 1,232 Staff Expense $ 2,235 Advertising $ 4,474 Public Relations & Photos $ 5,700 Supplies $ 1,905 TOTAL $ 119,896 It should also be noted that last year approximately $26,068 in direct City staff time was used to coordinate the Float and related events. This year the City staff time is estimated to be only the time necessary to attend Foundation meetings and some maintenance time to set-up barricades for the Float at the auto dealer (estimated at under $300). The other cost for this year was $3,870 from Transportation Funds for transportation of Float decorators. Funding the 2002 Float It is anticipated that the Float will again need a subsidy for the 2002 Float. The following options are available for funding the 2002 Rose Float: • General Fund • Business Improvement Tax (BIT) Fund? The reserves in this Fund are expected to be depleted by the end of this fiscal year (See Attachment 4). • Combination of General Funds and BIT Funds • Continue to review as part of the FY 2001-2002 budget development process. Per City Council direction, the City Council Sub -Committee of Mayor Herfert and Council Member Touhey held meetings on January 19 and February 1, 2001 with City staff, Chamber of . Commerce staff and members of the Community Services Commission Sub -Committee on Special Events. These meetings were held to begin to review several alternatives to fund the Float, 4 h of July Event and the Summer Concerts because reserves in the BIT Fund have been depleted. The Sub -Committee reviewed some ideas for changing the events or reducing the scope of the events but determine that the events were important and should continue in the current form. The next challenge was to review alternatives for funding sources. This was very difficult because there are not many alternatives and funding is already tight in many areas. After discussion, the Sub -Committee is recommending the following: 4'h of July Event — A clear funding source was not determined other than the General Fund. The Sub -Committee felt that it is a community event that is very popular with residents and it provides a fun and safe patriotic celebration for thousands of residents. The Sub - Committee also suggested that staff look very closely at the amount of charges from departments and to reduce the costs to only what is absolutely necessary for the event. Rose Float — After discussion, the Sub -Committee is recommending that funding for the Float come from $50,000 in fundraising and $60,000 from the BIT Fund. The Sub= Committee also felt that any shortfall from the fundraising should be covered by the BIT Fund. Fred Burkhardt had reservations about continued funding from the BIT Fund because reserves have been depleted and continued funding would impact other existing Chamber Programs. Mr. Burkhardt also requested that the Sub -Committee provide further assistance with the fundraising efforts next year and the Sub -Committee committed to further assist next year. In addition, the Sub -Committee will also ask the full City Council to get more directly involved with fundraising. Finally, the Sub -Committee would like to see some fundraising efforts for the Float as part of the 4 h of July Event in the stadium. I UUPITERICSRIVSDOCSISpecial EventslRose FloatWgenda Report 2-6 - Invitation for 2001.2.doc • Summer Concerts — A final recommendation was not developed for the Summer Concerts. The Sub -Committee will meet in the next 30 days to try to come up with funding alternatives for the full City Council to consider. The reality is that not many alternatives exist and staff will also review the issue during the budget development process. If the City Council decides to pay the $2,500 entry fee for the 2002 Float, then staff is recommending that the City Council authorize a transfer of available BIT funds (current year funds used by Redevelopment for advertising) from account 118-320-2430-6457 to the Rose Float account 118-320-2431-6208, to pay the cost of the entry fee. RECOMMENDATION: Staff has identified three options for the City Council to consider: 1. Accept the invitation, authorize payment of $2,500 for the entry fee from available BIT Funds transferred from account 118-320-2430-6457 to 118-320-2431-6208, and participate in the 2002 Tournament of Roses Parade; or 2. Decline the invitation; or 3. Accept the invitation, authorize payment of $2,500 for the entry fee from available BIT Funds transferred from account 118-320-2430-6457 to 118-320-2431-6208, and agendize the issue for further discussion at a later date or as part of the budget development process. It is recommended that the City Council consider these options and direct staff to act accordingly. Tom Hatch, Community Services Director Reviewed and approved by: Artie Fie d Assistant City Manager/Acting Finance Director Attachments 1. Letter from the Pasadena Tournament of Roses 2. Value of Business Impact from Float 3. 2000 Float Financial Report including the 1999 costs 4. Fund Balance Summary of the BIT Fund I UUPITERICSRVSDOCSISpecial EventslRose F1oamgenda Report 2-6 - Invitation for 2001.2.doc i ®�►�+�® AOCHMENT NO. 1 PASADENA TOURNAMENT of ROSES January 17, 2001 Mt. Tom Hatch Community Services Director City of West Covina 1444 West Garvey Avenue South, Room 205 West Covina CA 91790 Dear Mr. Hatch It is with great pleasure that I, on behalf of the Board of Directors, extend this official invitation to City of West Covina to participate in the 113`h Tournament of Roses, to be held on Tuesday, January 1, 2002 in Pasadena, California. The Rose Bowl will host the BCS National Championship Game on Thursday, January 3, 2002. Given the increased interest in the 2002 Tournament of Roses due to the Game, it is essential that we receive your response to this invitation no later than January 31, 2001. An entry fee of $2,500 should be sent with the enclosed update and acceptance forms to the . attention of Mr. Gary DiSano, Chairman of the Float Entries Committee. We welcome your continued participation in America's New Year Celebration. Yours sincerely, nald A. Okum President 391 SOUTH ORANGE GROVE BOULEVARD • PASADENA, CALIFORNIA 91 184 TEL 626.449.4100 • FAX 626.449.9066 YY11r.'VY't "i�I�i- Inn 1 rrx: `- �My.�wn �rl wr1n1:S�OCIC ;t;PI1C1. IU 98138675 P.02 Pete: January 31, 2001 ATTACHMENT NO. 2 From., Jack Kyser Subject: Business impact Of West Covina Rose Parade float A wAOr benefit of participation in the Rose Parade Is exposure to both nadonal and international audiences. The Tournament of Roses provided an analysis of 2000 parade coverage by all telecasters (ABC, CBS, KTLA (the WB), HGrV, KMEX, NBC, and Videospec), including minutes of air time for each float, and the number of times Ibc sponsor's name or logo was mentioned. We calculate that the West Covina float romlved a cumulative tow of 16.7 minutes of air time, including 9 mentions of sponsor name and 15 shots of their "'1090." This includes the two repeat telecasts of the parade by KTLA, as well as their broadcast of the parade to Japan. The station tells us that the parad,: has become a very popular program in Japan, as KTLA broadcasts it in HDTV. and there are over 900,0oo HDTV sets there. We obtained the cast of a 30 second national spot from the CBS Network and KTLA, and applied it only to 16 minutes. If West Covina had paid for this iilr time, the cost would have been about .70 million. How to convert this to business opportunities? The challenge for West Covina is to convert this exposure to business development opportunities. For example, the city might want to boost hospitality business by attracting out -of -area bands. There wire 15 such bands in 2001, and Orange County makes aggressive recruiting effort® to attract there. Perhaps a joint incentive package oould be negotiated with the Anaheim Conventloo and visitors Bureau. West Covina might also want to explore how the TV exposure in Japan could be exploited. For example, a Smaller Japanese Finn might be interested in lot:ating in the office complex to the east of the Plaza at West Covina. Local comp; Mies. might also be potential co-sponsors of a float with the city. One observer of the Tournament noted that the floats ,provide" a lot of bang for the buck` for their sponsors. The business community could look for OPPortunities within the Parade theme to visually tell the local business 6tory. The challenge is to mash hose Parade exposure with economic development goals. TOTAL P.02 Citv of West Covina ATTACHMENT NO. 3 - 1 of 2 0 TO: City Manager and City Council FROM: Tom Hatch Community Services Director ie Memorandum AGENDA ITEM NUMBER B- 7a DATE: March 7, 2000 PRINTED ON RECYCLED PAPER SUBJECT: FINAL FINANCIAL REPORT FOR 2000 ROSE FLOAT EVENT SUMMARY: The final accounting of the revenues and expenditures for the 2000 Rose Float has been completed. This informational report was requested by the City Council and is provided for the City Council's review. BACKGROUND: At the request of the City Council, the Community Services and Finance Departments have prepared the following report that recaps the financial impact of the participation in the 2000 Tournament of Roses Parade. DISCUSSION: The following is a summary of the total revenues and expenditures for the Business Improvement Tax (BIT) fund for the 2000 Rose Float event. Overall, the City anticipated expending $172,400 on fundraising events, fees, and the construction of the float. The City also expected to raise $175,000 in revenues. As depicted below, the shortfall in revenue was partially offset by a favorable variance between appropriations and expenditures. Accordingly, the City expended $82,433 in BIT funds to participate in the 2000 Tournament of Roses Parade. Business Improvement Tax Fund Budgeted Actual Variance favorable / (unfavorable) Revenues Raised $ 175,000 $ 66,360 $ (108,640) Expenditures 172,400 148,793 23,607 Surplus/(Deficit)."(82433) The following tables detail the revenues and expenditures associated with the 2000 Rose Float event and impacting the Business Improvement Tax fund. Revenues Sponsorships $ 32,800 Dnnntinm Summer Concerts Golf Tournament Merchandise Tickets TOTAL 5,063 2,718 7,091 10, 088 8,600 $ 66,360 Expenditures Parade Entry Fee $ 2,500 Design and Construction of Float 100,000 Merchandise 19,834 Tickets 8,394 Golf Tournament 9,288 Supplies 952 Promotional Page in Rose Parade Program 4,400 Recognition 1,069 Photo Services 2,356 TOTAL $ 148,793 Z: Welly AlcDOnalMose ParadeMaQ''Reports- Thursday MemosUgenda Report 3-7-00 Financial.doc ATTACHMENT. 3 - 2 of 2 , The City expended a total of $157,893 to participate in the 199�_Tournament of Roses Parade. (BIT fund expended $132,554 and he Fee and Charge fund expended $25,339) The City collected $100,031 from various fund raising events. All of the fund raising revenue was used to offset exp_en_3i"t`ures in the BIT fund. At the request of Councilmember Wong, staff has included a summary of the additional costs of the event, i.e., transportation and staffing by various departments that are absorbed by the City. Staffing costs have been estimated based upon position, the determined hourly rate including benefits for the position, and estimated time spent working on the program. These costs are not reflected in the analysis of the impact to the BIT fund. These costs are included in regular personnel costs, which rest primarily in the General and Special Revenue funds. Estimates of these additional costs are as follows: Additional Costs Community Services Staffing $ 24,776 Police Department Staffing Maintenance Department Staffing 1,112 180 SUBTOTAL $ 26,068 Transportation - Charter Buses 6,095 TOTAL $. 32,163 The' volunteer efforts throughout the event were significant and bear mentioning, particularly as the volunteer contributions represent a cost savings. Staff has estimated that volunteers contributed 6,500 working -hours toward the planning of events, decoration of the float, fundraising efforts, and other aspects of the float. The exact value of the volunteer hours is unknown, however, it can be estimated that, at a minimum, each volunteer hour is worth the federal minimum wage rate of $5.75 per hour for a total estimated value of $37,375. According to the Orange County Independent Sector survey of volunteer agencies published in Giving and Volunteering in the United States, the City may also assume the Nationally Accepted Base Rate of $11.58 per hour for volunteers for a total of $75,270. Media exposure and promotion is another important benefit that the City derived by participating in the 2000 Rose Parade Float. While the exact value of this benefit is unknown, it may help to consider the value of media exposure determined by another client of Charisma Floats, Legoland. Legoland, like other corporations, participate in the Rose Parade for the wide exposure that they receive. Subsequent to the 2000 Rose Parade, the advertising and marketing agency of Legoland determined that the cumulative value of the exposure it received by participating in the parade to have a monetary value of $1.5 million. See. Attached for media listing. FISCAL IMPACT: Because this is a historical report, no future financial impact results. RECOMMENDATION: It is recommended that the City Council receive and file this report. Prepared By: ll Kelly onald, Administrative Aide Reviewed and Approved By: Tom Hatch, Community Services Director Margie Tucker, inance Director IVUP/TERICSRVSDOCSIKellyMcDonaldlRoseParadelSta/iRen.,.t._Th,,,.,t,...u,....__k.____,_ 0 ATTACHMENT NO.4 0 BIT Revenues/Expenditures and Fund Balance REVENUES 1997-98 1998-09 1999-00 2000-01 2000-01 2001-02 11831 D4000D 4151 Business Improvement Tax Actual 459,957 Actual 511,511 Actual Budgeted Projected Projected 118310A000-4410 Interest Income 7,651 538,099 S40,000 550,000 560,000 118310-0000-4733 Rose Float Reimbursements 9,681 9'3' 5,� _ Miscellaneous _ 66,360 5,8� 75,000 15,000 15,000 100,031 TOTAL REVENUES 467,608 621,223 614,454 _ 624,800 570,000 575,000 'EXPENDITURES Public Services 118-32D-2320-6120 Code Enforcement 0 0 0 2500 2,500 2,500 Sub Total 0 0 0 2500 2500 2500 Community Services 118320-2431-6166 118320-2431-6206 Concert Series Rose Float . 28,237 37,183 19,712 40,910 40,910 40,910 118-320-2431-6208 Rose Float 200D - 132554 118-320-2431-6493 Administration 8 Overhead - 57,647 91,281 281 120,000 000 120,000 120,000 118320-2431-6497 July4th1,250 _ 7,957 30,632 4,450 48,922 1,250 54,640 57,381 1,250 57,381 Sub Total 36,194 258,016 164,365 216,800 219,541 219,541 Economic Development 118-320-2430-6431 118 320 2430 6443 Chamber of Commerce S. G. V. E. P. 347,500 332,600 552,213 516,600 500,000 504,000 118320-2430-6457 Project Improvements 11,000 56,148 11,000 11,256 10,900. 11,000 10,675 11,000 118320-2430-6493 Administration 8 Overhead 15,409 64,000 64,000 64,000 Sub Total _ 414,648 _ 354,856 2,960 581,482 1,250 592,850 1,250 575,925 1,250 580,250 TOTAL EXPENDITURES 450,842 612,872 745,847 812,150 797 966 802,291 BIT FUND BALANCE Beginning Beginning Date Balance 07/01 /97 331,460 07101 /98 348,226 07/01 /99 356,577 07/01 /2000 • 225,184 07/01/2001 ' (2,782) Ending Revenues Expenditures Balance . 467,608 450,842 348,226 621,223 612,872 356,577 614,454 745,847 225,184 570,000 797,966 (2,782) 575,000 802,291 (230,073) Projected numbers C7-i &',6: To: CoOlmembers, Public, Staff �' 114 From: Mayor Steve Herfert, Councilmember Mike Touhey Re: 4th of July, Rose Float, Summer Concert Committee With respect to a lengthy and confusing staff report, we summarize our recommendation to the full City Council as follows: 4th of July Fireworks Show - The annual show held on the 4th of July in the West Covina High School stadium is a showcase event for the City of West Covina. The costs for the event are outside of the realm of the MDA/Elks/West Covina five day event. Therefore we recommend the use of general funds for the event. Result: The business Improvement Tax will not be used for the event. ($57,000 of BIT not used) General fund money will be used to fund this event. The City will be the host The event will bring great Public Relations to the city. Rose Float - The Rose Float is a definite plus for the city. An estimation of the TV time from Jack Keyser and economist put the value of our time on TV at $2.7 million. The Rose Float . Committee is in favor of continuing the event. The Chamber wants relief from the cost. The result is that the Rose Float Committee will raise $50,000 of the cost and the Business Improvement Tax will fund $50,000. The newly hired special events staff in the Community Services Department will be the point for the city. Result: The business Improvement Tax budgeted will be reduced from $100,000 to $50,000. The City and Committee will work together as host. The event will bring great Public Relations to the city. Summer Concerts - Because of limited time, this item was tabled for futher discussion. Overall assessment - The Business Improvement Tax for the two events discussed above is reduced by $107,000. This should alleviate the concern of overusing the Business Improvement Tax. Conclusion: We urge the Council to approve the 4th of July event and the Rose Float as described • above. It is imperative for fundraising on the Rose Float that full float funding be approved tonight. As the Council is aware, fundraising for last years float was hampered by the delays of the City Council. If future changes to this proposal are necessary, the will be addressed by the Council at that time.