Did The City Of Flagstaff Falsely Report A Profit For The Annual Dew Downtown Event?

During public participation at the June 3rd. 2014 Flagstaff City Council meeting, a concerned member of the public spoke to council and asked them to look further into the financial figures for Flagstaff’s annual Dew Downtown event.

According to this speaker’s research, the City lost around $46,000 rather than making a profit of over $13,000 as city staff and the Arizona Daily Sun reported.

We have received the figures and will be looking into them closer. Below is the statement given to council:

“Good evening council and staff, thank you for your time today.

This past Sunday, the city published a Request for Proposals for the 2015 Dew Downtown Event Organization I’m here tonight to ask council to carefully consider the costs to the community that an event like Dew Downtown imposes.

In March, you were briefed and the AZ Daily Sun headlined – Dew Downtown Event in the Black! The numbers reported that the 2014 Dew Downtown event generated a PROFIT of over $13,000.  That would seem to suggest an additional $13,000 for the general fund and would be a big win for an event that has drawn some controversy over its three year history.

I was curious to see how that profit was generated so I requested more detailed information about the event from the city. Ms. Susan Alden – City Records Coordinator, has been extremely helpful and steered me to both Glorice Pavey – Recreation Services, and Richard Hearne – Streets Manager for detailed cost breakdowns.  BTW, all three of these employees deserve credit for doing a great job.

I’ll admit upfront that I am NOT a forensic accountant nor did I stay at a Holiday Inn Express last night but, when ALL the numbers are included, the result is significantly different than what has been reported to you.

The costs reported to you and then reported in the paper did NOT include either city labor costs or the costs of city equipment.  When they are included, the $13,000 profit turns into an almost $46,000 loss.  This is a difference of almost $60,000.

City staff has explained that labor costs were not included because those employees would have been paid anyway.  While I’ll agree in principle, their labor is in fact a cost of the Dew Downtown event.  Had they not been working on Dew Downtown, other required city work would have been accomplished.  It might be interesting to see if this philosophy has been applied in other cost estimates.

I’m not clear why the city equipment costs were not included but as you all know, numerous pieces of heavy equipment including dump trucks and loaders were required to both build and remove the course so those costs are also a part of the Dew Downtown.

It has been suggested that the additional sales/BBB taxes generated by an event like Dew Downtown more than offset the costs.  I’ve compared Jan, Feb and Mar of both 2013 and 2014 and have found no such evidence.  Revenues year to year have continued a slight increase in Feb with the Dew Downtown event just as they have in the months before and after Feb without such an event.  

I have previously discussed my findings with Deputy City Manager Josh Copely to ensure that my understanding of the facts is accurate.

I would like to encourage council to consider the REAL costs of events like Dew Downtown and the many other decisions you are asked to make BEFORE committing tax dollars to them.  You should be asking the tough questions like “Is this ALL of the costs associated with this project” and what are the potential unintended consequences of this decision?

Thank you again for your time this evening.”

Advertisements

One thought on “Did The City Of Flagstaff Falsely Report A Profit For The Annual Dew Downtown Event?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s