Special Events Cost Analysis. City of New Orleans December 2016

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1 Special Events Cost Analysis City of New Orleans December 2016

2 Contents I. Background II. Analysis III. Options IV. Appendix: Supplemental Information Special event fees table Peer review Legal definition of nonprofit City of New Orleans 1

3 Special Event Waivers & Discounts Background Fees are set by several methods Fees, permits, and licenses are provided by Code in the section of the designated regulatory department City Code designates some fees as at the discretion of the [department] director, so fees can vary widely by event, location, and organization Fees for the rental and delivery of equipment, such as stands or barricades, are not established in Code Nonprofits need consistency and predictability of event rates and structures City of New Orleans 2

4 Special Event Waivers & Discounts Background Terminology: Direct Costs Fee waivers create a direct cost to the City that must be paid for from non-user fees, such as sales and property taxes on others Direct Costs to the City, as referenced in ordinances, are costs paid for additional personnel details (police, fire, and EMS details) Ordinances for waivers typically exclude waiving these direct costs With the exception of occupational licenses, including alcohol and occupancy, the fees that are waived or discounted result in uncompensated labor hours and wear and tear on City property that the City must support Terminology: Nonprofits For our purposes, organizations must be state or federally designated nonprofits and religious/faith-based organizations City of New Orleans 3

5 Special Events Fee Waiver Analysis City only collects 12% of total special event fees owed due to nonprofit fee waivers and discounts The City lost approximately $2.1M by granting waivers and discounts YTD in YTD Total Special Event Fees Due $ 2,170,378 $ 2,439,510 CAO Waivers (456,014) (796,513) Council Waivers (105,514) (67,049) Council-Finance Alcohol Waivers (617,655) (1,022,466) Non-Profit Discount Rates (173,300) (250,258) Amount City Actually Receives $ 817,894 $ 303,223 City of New Orleans 4

6 Special Events Fee Waiver Analysis (cont d) 87% of waived fees are for occupational licenses (incl. free or sold alcohol) and use of City owned property YTD 3.7% 2.2% 0.7% 1.5% 9.4% 10.2% 47.9% 48.7% 36.8% 38.4% ABO Fees Facilities Fees Mayoralty & Parade Permit Fees Temporary Certificate of Occupancy Other City of New Orleans 5

7 Option 1: Lower Alcohol Fees; Continue to Grant Nonprofits Waivers & Discounts Estimated annual special event cost recovery: $909,566 Change the alcohol license fees to the following: Current Fees For Profit Fees Nonprofit Fees Processing Fee $250 $200 $100 Alcohol License Fee (High & Low Content) $635 $50 $25 No further changes to fee waiver and discount process Council may continue to grant discounts and waivers to nonprofits, except for alcohol, for which nonprofits would receive an automatic discounted fee CAO would cease to issue waivers City of New Orleans 6

8 Option 1: Lower Alcohol Fees; Continue to Grant Nonprofits Waivers & Discounts Advantages Lower alcohol license fees would be comparable to cities such as Atlanta, New York, and Baltimore Council would retain the ability to grant nonprofits fee waivers and discounts at their discretion Minimal cost impact to nonprofits for alcohol licenses City of New Orleans 7

9 Option 2: Lower Alcohol Fees; Grant Nonprofits 50% Discount on All Fees; Eliminate Waivers Estimated annual special event cost recovery: $1,412,104 Change the alcohol license fees to the following: Current Fees For Profit Fees Nonprofit Fees Processing Fee $250 $200 $100 Alcohol License Fee (High & Low Content) $635 $50 $25 All nonprofits would receive an automatic 50% discount on special event-related fees Includes facility rentals, tent inspections, etc. Excludes direct costs such as details City of New Orleans 8

10 Option 2: Lower Alcohol Fees; Grant Nonprofits 50% Discount on All Fees; Eliminate Waivers Advantages Establishes an equitable fee system based on public benefit, not on relationships Special event costs would be predictable and organizations would know what to expect City would recoup some of the true costs of regulating and servicing special events by eliminating full waivers Lower alcohol license fees would be comparable to cities such as Atlanta, New York, and Baltimore City of New Orleans 9

11 Preliminary Recommendations Legal & Administrative Improvements Establish new permit, license, and rental fees that are equitable and uniform Develop fair market and 50% discount rates for City property and equipment for the following departments: Property Management NORDC Parks & Parkways Department of Public Works French Market Corporation Allow the City to waive fees for qualified major events, defined by the State 1 as events that: 1. Have been considered through a highly competitive selection process against one or more sites that are not located in this state 2. Are to be held once or to be scheduled to be held annually for a period of years under an event contract 3. Have a site selection organization selects a site in this state as the sole site for the event 4. Are held not more frequently than annually Allow the City to waive fees for City initiatives as approved by the CAO (ex. hosting foreign or domestic public officials at Gallier Hall) Exclude solely public service events that benefit City property (ex. litter clean up only) 1 Refer to RS 51:2365.1(5) for a pre-approved list of qualified major events. City of New Orleans 10

12 Appendix: Supplemental Information

13 Major Special Event Fees City Code authorizes waivers and discounts on numerous fees to nonprofits and others Type Description of Waiver Cost Legal Authority Mechanism Full Fee Waives all fees for the event (generally excluding direct costs to the City) Varies City Council CAO Ordinance Letter Alcoholic Beverage Permit & Processing Fee Waives all permit and processing fees for sale of alcohol for nonprofits, hospitals, and other organizations that act exclusively for charitable purposes - Permit processing fee: $250 - Sale of low content alcohol: $135 - Sale of high content alcohol: $500 - Sale of all types of alcohol: $635 City Council & Director of Finance - Council sends approval to Finance - Finance verifies organization is compliant with all City laws Nonprofit Parade Permit Discount Reduces the fee for schools or community-based, private/nonprofit local organizations - Reduced fee-eligible organizations: $50 - All other organizations: $200 Director of Finance Automatic through application Temporary Certificate of Occupancy Discount Reduces the fee for any nonprofit that is registered with the state or federal government to temporarily use a location for a purpose other than its typical - Qualified nonprofit fee: $30 - All other organizations: $190 Director of Finance Automatic through application City of New Orleans 12

14 Major Special Event Fees (cont d) City Code authorizes waivers and discounts on numerous fees to nonprofits and others Type Description of Waiver Cost Use of City Property Rental Fee Fire Prevention Fee Parking Meter Bagging Fee Waives the rental fee that covers maintenance and staffing for NORDC, Parks & Parkways, other City properties, and public rights of way for nonprofits Waives the fee for NOFD to conduct tent inspections Waives the rental fee for the cost of bagging and restricting parking in a public metered area Varies depending on facility ~$50 to $2,000 Major events could cost more Varies from $50 to $1,250 depending on: - Size of tent - Additional 10% administrative fee of the total cost of the fire-watch Varies but includes all of the following: - Meter rental application fee: $40 - Meter rental service charge: $45 per # of pay stations - Meter rental charge per diem and # parking spaces: Downtown areas: $70 Other areas: $30 Legal Authority City Council CAO City Council CAO City Council CAO Mechanism Ordinance Letter Ordinance Letter Ordinance Letter City of New Orleans 13

15 Peer Review New York City Alcohol Beer, wine, and cider permit fee: $36 per point of sale Caterer s permit fee (liquor, beer, wine, and cider): $48 per point of sale Caterer must be hired in order to serve liquor Facilities Public plaza permit fees based on size of event, ranging from $1,000- $31, (c)(3) nonprofits receive a standard 20% discount Park facility fees range from $200 to $35,000 and are calculated depending on the size and attendance: Only athletic charitable events receive discounts ranging from 77% to 86% City-owned indoor venues are not rentable No waivers are granted City of New Orleans 14

16 Peer Review (cont d) Atlanta Special event permit fees (excluding alcohol and facilities fees) are determined by event size and organization classification, with the 501(c)3 nonprofit discount rates ranging 30% to 60% Alcohol Fee Type Nonprofit For Profit Special Event Alcohol Permit Processing Fee $ 25 $ 100 Nonprofit Alcohol Licensing Permit $25 per day per point of sale NA For Profit All Content Alcohol Licensing Permit NA $ 100 per day per point of sale Facilities Facility fees range from $30/hour to $225/hour and are calculated based on nonprofit vs. for profit organizations and whether the organization is a resident vs. non-resident No waivers are granted City of New Orleans 15

17 Peer Review (cont d) Baltimore Base special event permit fee (excluding alcohol and facilities fees) is determined by event size with no waivers or discounts provided to nonprofits Alcohol Only 501(c)(3) nonprofits can receive a special events liquor license Facilities $25/day for low content alcohol and $50/day for all content alcohol Fees range from $85 to $1,500 depending on the number of attendees Facility fees are discounted for community service events and local schools at a 53%-90% discounted rate, and not for other nonprofits No waivers are granted City of New Orleans 16

18 Nonprofits Defined The State has a more expansive interpretation nonprofits and lower reporting requirements than the federal government RS 47: State of Louisiana Registered corporations that are domestic, civic, educational, historical, charitable, fraternal, or religious Entire proceeds, except for necessary operational expenses, go toward the mission of the organization Annual report postcard with the name and signature of the principal officer required to maintain good standing Federal Government US Code Title 26, Section 501(c) 501(c)(3)s: Corporations, and any community chest, fund, or foundation, organized and operated exclusively for: Religious, charitable, scientific, testing for public safety, literary, or educational purposes Fostering national or international amateur sports competition Preventing cruelty to children or animals Other 501(c)s could include fraternal or social aid and pleasure clubs, such as 501(c)(7)s All non-religious 501(c)s are required to file 990s annually. 990s provide a description of assets, receipts, expenditures, organization s mission, programs, and activities. City of New Orleans 17

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