According to an economic impact report on the Hollister
Independence Rally, the event nets the city nearly $400,000 over
the three-day weekend.
Hollister – According to an economic impact report on the Hollister Independence Rally, the event nets the city nearly $400,000 over the three-day weekend.
But some city officials are skeptical of the study’s accuracy and question the rally’s future.
The Hollister Independence Rally Committee paid $7,500 to have Illinois-based Wilson Consulting spend four weeks researching how much money the rally brings in to Hollister and nine surrounding cities.
The firm concluded the rally generates almost $250,000 in sales tax revenue for Hollister. Along with revenues generated from business licenses, vendor sales tax revenues and transient occupancy taxes – revenue generated by hotels and inns – the study estimates a total of $370,832 flows into city coffers.
“You pull that kind of revenue away from the city – every business that stays open reports they do three times the business that weekend – you tell me,” said Helen Nelson, HIRC executive director. “Many businesses report if they didn’t stay open for the rally they wouldn’t be able to stay open the rest of the year.”
But City Councilman Doug Emerson blasted the study, saying that because the figures are based only on assumptions – estimates and information mainly taken off Web sites without any hard data – he doesn’t see an iota of credibility in it.
He also expressed concern over the rally’s viability and whether the City Council will vote to continue it for future years. The rally was nearly canceled in 2004 over financial concerns.
“I’m taken aback that HIRC would even send something like this to the City Council,” Emerson said. “I have a background in finance, and I’m almost insulted. Am I supposed to believe this? If it was right now, I’d probably vote to not do it again.”
City Councilman Brad Pike echoed Emerson’s sentiments, saying he believes HIRC should go back to the drawing board and redo the study based on facts and hard figures.
“The proof has to be in the pudding and I’m not sure it’s there yet,” Pike said. “We’re pretty factually-based people, and if the facts are there, they’ll show it. From what I’ve seen, they haven’t showed it yet.”
Pike also referenced a recent report issued by Hollister Police Chief Jeff Miller, which stated that, based on a confrontation between two motorcycle gangs during the 2005 rally and several other factors, he can’t guarantee adequate public safety staffing for future rallies.
“We need to start focusing on what the needs are for the city … and the public has to feel secure,” Pike said. “I don’t think this rally is showing feasibility. The intent is to have money raised for nonprofits. They’re (HIRC) not even able to pay their bills.”
HIRC Acting President John Loyd countered Emerson and Pike’s criticisms, stating in an e-mail that HIRC is simply asking the city to be a good partner and work together to make sure tax money gets collected properly.
“If the City Council chooses to cancel the rally it stands to lose well over $300,000,” Loyd stated. “It will be next to impossible to restart the rally if the City Council kills the event, and I believe local businesses will feel a very significant pinch.”
In the report Wilson said that estimates were made in certain cases because information could not be obtained. Wilson stated he was not able to obtain any public documents from Hollister because city officials did not respond to requests he made via e-mail and phone.
For example, the study provided various figures on estimated temporary occupancy taxes from hotels and motels, estimated sales tax revenues and several other revenue streams because some communities, including Hollister, did not have their annual revenue and expenses available to the public. Therefore, estimates were made based on neighboring communities of similar population and demographic profiles.
Emerson took issue with this approach.
“Public records are available and there’s a way to get public records,” Emerson said. “People who do studies like this know how to get information, they don’t make assumptions. I didn’t see anything in there we can rely on.”
Nelson dismissed Emerson’s criticisms as simply “his opinion,” and said she is more than confident the study accurately represents the revenue generated by the rally and trusts Wilson’s assumptions.
“It doesn’t worry me because this guy knows what he’s doing – he’s done this for 18 years,” she said. “If he didn’t know what he was doing, I’d be worried.”
Emerson also took issue with Wilson’s method of deriving information on sales tax revenues, which make up the largest portion of rally revenue, according to the study.
Wilson analyzed the information from more than 200 attendees of the 2005 rally who participated in a survey on the HIRC Web site regarding their expenditures at the event, lodging accommodations and their demographic profile.
Emerson said surveying people who only logged onto the rally’s Web site didn’t provide a truly balanced cross-section of rally goers and their expenditures.
Although HIRC and law enforcement officials have said attendance topped out at no more than 120,000 people, Wilson used an attendance figure of 130,000 – a third of which he assumed to be couples. He used this figure to calculate an assumed average expenditure per person of about $283.
With these figures Wilson calculated total sales revenue of more than $24 million – of which Hollister receives 1 percent – resulting in more than $240,000 in sales taxes.
City Councilman Robert Scattini, who believes the rally is a financial boon to local businesses, hadn’t read the economic report and declined to comment.
However, he cautioned that if the rally was canceled, it could cause more harm than good.
“If they think they’re (motorcyclists) aren’t coming anyway,” he said, “they’re wrong.”
HIRC and City Council members will hold a rally study session on Monday, Oct. 10 at 7pm to discuss the economic impact report and other matters surrounding the rally.
“I hope the city council sees the legitimacy of the economic impact report, and that the citizens of Hollister pack the council chambers for the budget study session,” Loyd stated. “We need to let our locally elected and accountable representatives know how we feel one way or the other.”
Erin Musgrave covers public safety for the Free Lance. Reach her at 637-5566, ext. 336 or em*******@fr***********.com
