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HomeMy WebLinkAbout1997-02-25 - AGENDA REPORTS - SC MARATHON (2)AGENDA REPORT NEW BUSINESS DATE: February 25, 1997 City Manager Item to be pre Rick Putnam SUBJECT: CITY OF SANTA CLARITA MARATHON: HISTORICAL OVERVIEW AND CONSIDERATION FOR THIRD ANNUAL EVENT DEPARTMENT: Parks, Recreation, and Community Services As a result of its dedication, the Santa Clarita Marathon Steering Committee staged a successful Second Annual City of Santa Clarita Marathon on Sunday, November 10, 1996. The event also included a ten -mile race and a children's fun run. Due to the success of the first year and the addition of events, the number of race participants doubled from the 1995 event. Because of the larger number of participants and increased participation, second year income increased 40 percent over first year income. Expenses were within budget and the deficit was less than the first year. However, the Marathon has a total debt of $25,066.92 to the City and Sheriffs Department for 1995 and 1996 events. Race officials are confident that with cash sponsorship already provided by major sponsors for the 1997 event, significantly larger numbers of participants can be attracted to the event. While it is possible that 1997 income will exceed 1997 expenses, it will be difficult for the Marathon to reduce significant indebtedness this year. Discussion: In previous years, the City Council has provided endorsement for the Marathon. Endorsement included the Committee's use of the name and logo for marketing purposes. In January 1996, when the City Council considered the second marathon, it supported the event and entertained the idea of participating in the event as a partnership; however, no additional financial sponsorship was provided for the event during the annual budget process. City staffs research of many other marathon events across the country shows that practically all events depend on some form of subsidy, either private or public, to cover all associated costs. Although it was anticipated originally that the Santa Clarita marathon could function without any public funds, staff believes that without a. partial subsidy the event will not be able to continue. Advantages and disadvantages of the City's participation in the event are included as an attachment to this report. TZ, go Agenda Items 15 CITY OF SANTA CLARITA MARATHON: HISTORICAL OVERVIEW AND CONSIDERATION FOR THIRD ANNUAL EVENT February 25, 1997 - Page 2 Other Events:. It is important to note that there are other City co-sponsored events which include the 4th of July Parade and 5K Run, Frontier Days, Henry Mayo Hospital 5K Run, and the Santa Clarita Velo Chuck Pontius Community Bike Ride. The City's co-sponsorship provides funding and/or "in kind" assistance for nonprofit special events benefitting City residents. Approximately $40,000.00 was budgeted for co-sponsored programs in the 1996-97 fiscal year. Economic Development Impacts: The Economic Development Division of the City of Santa Clarita, in conjunction with the Santa Clarita Tourism Bureau, has. specifically identified the Marathon event in addition to the Cowboy Poetry Festival and proposed LPG Nissen Open Golf Tournament as primary events to be promoted. These selections are a reflection of the Tourism Strategic Plan, and policy adopted by the Bureau that measures its event sponsorship involvement against: 1) measured economic impact of an event; and 2) the achievement of brand awareness of the name "Santa Clarita" through the event. Based on original research conducted on the 1996 Marathon and 10 Mile Race event, staff can document an economic benefit and value of the Marathon of approximately $513,766.00. Further, the Economic Development Division believes that with a more aggressive marketing effort, the opportunity to capture a larger share of the 6.2 million competitive runner market is excellent. Toward this end, the Economic Development Division would like the City Council's consideration for allocating $25,000.00, $20,000.00, and $15,000.00, respectively, in 1997-98-99 in Economic Development Administration (EDA) Grant funding to the Santa Clarita Tourism Bureau specifically to promote the Marathon event. Marathon Committee: The Marathon Steering Committee (MSC) is requesting that the City Council endorse the Third Annual City of Santa Clarita Marathon and related events and give permission to use the name and logo of the City in the title of the event. Furthermore, the committee requests the City Council to: A. Take a budget action to pay the MSC's current debt of $28,066.92 (includes 1995 and 1996 Sheriffs Department expenses of $5,984.29 and $10,983.53, respectively, and 1996 City Public Works expenses of $11,099.10). In return, the MSC agrees to continue to promote the City as title sponsor in national and local promotion; and agrees to pay the City the total sum of $28,066.92 by November 30, 1997, and B. Agree to fund the title sponsorship of the 1997 event by absorbing the City's and Sheriffs Department expenses not to exceed $24,000.00. Without deferral of 1996 City expenses the Committee does not believe that a third year event can be planned, and the current debt would stand unpaid. CITY OF SANTA CLARITA MARATHON: HISTORICAL OVERVIEW AND CONSIDERATION FOR THIRD ANNUAL EVENT February 25, 1997 - Page 3 RECOMMENDATION Staff requests direction in response to the MSC proposal for current and future City fiscal support, and consideration of the use of EDA Grant funds toward the support of the Santa Clarita Marathon as outlined in options below: Option 1: A. Transfer $16,967.82 to Account No. 6100-8076, Sheriffs Special Events for payment of Sheriffs services, and $11,099.10 to Account No. 001-9501, Transfers Out, for payment of Public Works Services from City Council Contingency Account No. 1240-7401. Defer receipt of the total payment of $28,066.92 from MSC until November 30, 1997. B. Agree to fund the title sponsorship of the 1997 event by absorbing the City's and Sheriffs Department expenses not to exceed $24,000.00. Continuation of the sponsorship program will be subject to an annual evaluation by the City Council of the economic development benefits and financial status of the event. Include the $24,000.00 in the 1997-98 budget. C. Authorize allocating $25,000.00 in 1997, $20,000.00 in 1998, and $15,000.00 in 1999 of Economic Development Administration Grant funds to the Santa Clarita Tourism Bureau, specifically for the promotion of the Santa Clarita Marathon event. Option 2: Withdraw approval of future events and absorb current outstanding debt to the City in the amount of $11,099.10. ATTACHMENT City of Santa Clarita Marathon Participation-Advantages/Disadvantages REP:DDP:lkl wunc0\.athn3.0 CITY OF SANTA CLARITA MARATHON PARTICIPATION ,_eY Substantial positive City recognition. Economic benefit and value estimated at $513,766. Destination event generally well received by the community. Exposes Santa Clarita to nearby communities and other cities in Southern California. Has the support of the Chamber of Commerce and major employers within the City. Sponsorship could give the Marathon the opportunity for future self- sufficiency. DISADVANTAGES The City has not been paid for 1996 fees. Financial stability of the event is unknown. Event may never be self-supporting. Extensive staff commitment in planning. Negative impact on the City's General Fund. Deferral of City's and Sheriffs Department expenses until November 1997.