The Hollister Independence Rally must double its revenue in 2004
to break even because the city and state, in tough economic times,
will no longer absorb costs for services provided during the
event.
If the Hollister Independence Rally Committee wants to maintain
the same level of outside law enforcement along with services from
the city, estimates show the event must generate an additional
$230,000, according to a City Council report released by the
city.
The Hollister Independence Rally must double its revenue in 2004 to break even because the city and state, in tough economic times, will no longer absorb costs for services provided during the event.
If the Hollister Independence Rally Committee wants to maintain the same level of outside law enforcement along with services from the city, estimates show the event must generate an additional $230,000, according to a City Council report released by the city.
“These agencies are not going to work for free anymore,” Councilman Robert Scattini said. “It’s crunch time.”
For HIRC, that equates to supplementing $115,000 to the state for costs of law enforcement and $115,000 to the city for its services. Both expenses were previously covered by the agencies. The city’s tab included some additional law enforcement, along with added fire protection and site inspections.
The report, which was presented at Monday’s Council meeting by Hollister Director of Management Services Clay Lee, summarized the 2003 rally and laid out strategies for next year’s event. As a precursor to the report, the nonprofit organization and several city officials met for several hours the morning of Sept. 4.
“This is a big jump for them,” Lee said. “They’re going from not having to pay any of these costs to paying in excess of $200,000.”
To change its no-charge policy, the city wants to amend its contract with HIRC, which was signed in June 2001 and is set to expire in 2006. If HIRC is not open to that, the city will consider terminating the contract at its Oct. 6 meeting and opening negotiations for a new deal.
Realizing the possibility for changes, HIRC officials have spent the past couple months mulling over possible strategies to generate the necessary added revenues.
One, which city officials support, would be expansion of the event area. HIRC has proposed extending the festivities on several side streets running parallel to San Benito Street. Part of the organization’s plans are to add up to 75 new vendor spaces next year.
With that, HIRC has proposed every vendor in 2004 use mandatory cash registers for the first time, as officials remain pessimistic about accuracy of sales tax revenues generated. Officials believe visiting merchants have been short-changing the city since the rally began in 1996.
The group has also proposed an additional booth space fee of $300 and increased business license fees for each vendor, along with the possibility of using the Veterans Memorial Building and the old Fremont School for activities that include a Vietnam Veterans’ Memorial.
In all, HIRC projects it could earn an additional $283,000 more than the money earned in 2003 (which has been roughly estimated at about $200,000). Though Lee called the intended increase in revenues optimistic.
The HIRC projection also includes a proposal that Hollister pay a $60,000 credit to the nonprofit for the amount of added sales tax revenues earned during the rally weekend. Both sides said the discussions have been cooperative, and the future for the rally remains positive.
“The city’s been really good with us,” HIRC Executive Director Bob Beals said. “They’re trying their best. It’s tough times for them. It’s tough times for the state. We have to team up to make this thing work.”
Beals said HIRC has not completed its financial rundown of the 2003 rally. Once the numbers are determined, HIRC can calculate its annual amount of donations to local nonprofit organizations. Last year, it distributed $25,000 and has donated $170,000 since the rally’s inception.
Beals and other rally officials remain confident, even with the foggy path ahead, that HIRC will avoid losing money or potentially shutting down.
“I don’t think that will happen,” Beals said. “We’re doing the best we can. We’re hoping vendors respond, and we hit the marks we’re shooting for.”
