When taking into account estimated sales-tax and business-license revenue, City of Hollister records show a net profit for the local government during the past three motorcycle rallies, according to documents obtained by the Free Lance.
Those public records also show that the City of Hollister spent about $50,000 less on the 2015 rally than it charged the promoter for estimated costs stipulated in a contract before the event.
Finances surrounding the city’s signature event once again have raised concerns about the viability for its short- and long-term future. Hollister has lost a second promoter in two years, with the latest one recently departing due to a dispute over $90,000 still owed to the city for budgeted costs on the 2015 Hollister Freedom Rally.
Las Vegas-based ConvExx CEO Chuck Schwartz, before the 2015 rally, agreed to pay $180,000 for those costs. He paid only half the amount before a July 1 deadline—two days prior to the start of the motorcycle rally—and attributed his lack of payment to the city’s allowance of vendors setting up on private lots and competing with his business.
Some council members have expressed concern about hiring yet another promoter for 2016 with the prior one still owing money, casting a shadow on the future of an event the city has canceled twice in the past decade due to financial concerns.
Councilman Victor Gomez at a meeting earlier this month actually went as far as calling former rally promoters “shady characters.”
“I’m not sure if that’s the norm in the business,” he said at the meeting. “I’m not sure if I’m really looking forward to working with another shady character.”
Gomez at the time said he’s “not willing to have a discussion” about another rally promoter “until we’re paid in full for the last rally.”
But documents obtained by the Free Lance through an open records request showed that the City of Hollister’s rally coffers are actually in the black or close to break-even—depending on the accounting category—over each of the past three years since the latest event revival.
Although city officials have expressed concern about the $90,000 promoter deficit, it doesn’t equate to a total shortfall for the local government.
Hollister officials budgeted that $180,000 for 2015 event costs—about the actual expense total for the 2014 rally—and charged the amount to the promoter as agreed upon in the contract. The city’s costs for the event, however, ended up totaling $129,711, according to records provided by the city finance department.
With special fees for business licenses, inspections and other activities tabulated, net rally costs for 2015—without additional sales-tax revenue considered—came to a $34,524 deficit.
With a round $70,000 sales-tax estimated added to the equation for each of the past three years, as was done in the breakdown provided by the city, the 2015 event showed a $35,476 surplus.
The 2013 and 2014 events, meanwhile, showed surpluses even without the sales-tax figure added in.
In 2013, the city had a net gain of $3,112 without figuring in sales taxes. In 2014, the city’s net gain without the taxes was $37,197, according to city figures.
BY THE NUMBERS
-$34,525: Total net income from 2015 rally without sales taxes
$35,476: Total net income from 2015 rally with sales-tax estimate
$129,711: Total outflow of city expenses for 2015 rally
$187,137: Total outflow of city expenses for 2014 rally
$122,334: Total outflow of city expenses for 2013 rally
See more detailed rally figures in documents provided with this story.
