Form revised: December 6, 2011

 

 

 

FISCAL NOTE FOR NON-CAPITAL PROJECTS

 

Department:

Contact Person/Phone:

CBO Analyst/Phone:

Seattle Center

Alex Bennett 615-1827

Ned Dunn, 684-7212

Suzanne Smith, Law, 684-5472

Greg Shiring, 386-4085

 

Legislation Title:

AN ORDINANCE relating to the Seattle Center Department; authorizing execution of an agreement with Festivals, Inc. for the presentation of annual Bite of Seattle festivals at Seattle Center.           

 

Summary of the Legislation:

This legislation authorizes a three-year agreement between the City of Seattle and Festivals, Inc. for the presentation of the 2012, 2013, and 2014 Bite of Seattle Festivals at Seattle Center.

 
 
 


Background:  

The Bite of Seattle is one of three major festivals held annually on the Seattle Center campus.  The other two major festivals are Northwest Folklife Festival and Bumbershoot.  Each major festival has its own unique relationship with the City.  Bumbershoot, produced by One Reel, is structured to cover Seattle Center’s marginal costs.  Folklife receives direct City support.  The Bite of Seattle is the only purely commercial event of the three major festivals.

 

The 2012 Bite of Seattle, scheduled for July 20-22, will be the 31st annual Bite of Seattle, and the 27th held at Seattle Center.  Each year the Bite of Seattle attracts one of the largest and most diverse audiences to Seattle Center to enjoy food from around the world.   In 2013, the Bite is scheduled for July 19-21, and in 2014 for July 18-20.

 

In 2011, Seattle Center earned net income of $39,000 from the Bite, excluding parking revenue.  The average net income from this event was $72,000 for the period 2008-2010.   In 2011 the net income fell significantly due to low attendance from unusually inclement weather.  Seattle Center projects that net revenue from the Bite of Seattle in 2012-2014 will average approximately $80,000, assuming a normal range of July weather.  Consistent with earlier agreement, the City receives a percentage of all food, beverage and merchandise sales.  Festivals, Inc. pays a landscape fee and reimburses the City for all applicable costs, including labor, utilities and fees.  The Bite also pays the City a fee for the use of on-duty police officers at the event.  This fee is tied to the Special Events rate schedule.  The 2012 rate is $34,367.  In addition, the Bite hires off-duty police to carry out its approved security plan.

 

The new agreement includes few substantive changes from the previous agreement.  The agreement is re-organized for easier use by both parties.  There are minor changes in financial terms regarding the percentage of Food and Beverages Sales and Vendor Booth Fees (see below).  In addition, in the new agreement Seattle Center has negotiated broader rights to enter into campuswide exclusive sponsorship agreements, as part of the Center’s overall strategy to increase sponsorship revenue.    

 

There are three primary revenue sources from the Bite of Seattle:

 

(1)   Percentage of Food, Wine and Merchandise Sales

The City will receive 10% of all food and wine sold in designated areas, and 10% on merchandise sales other than from craft and commercial vendors.  For craft vendors and commercial vendors, the City will receive 10% of the fee paid by vendors to Festivals, Inc.  Under the previous agreement, the City received a flat $90 fee per vendor.  For sales of beer or spirits in designated beer gardens and comedy or dance halls approved in the agreement, the City will receive 20% for the first $50,000 of gross receipts and 15% of gross receipts above $50,000.  This is a change from the previous agreement, under which Seattle Center received 20% of gross receipts. Seattle Center estimates the net revenue impact of these two contract changes will be a wash to start, with an opportunity for an increase in net Seattle Center revenue of $2,000 by year three. 

(2)   Landscape (Grounds Restoration) Fee

The landscape fee paid by the Festivals, Inc. has an annual adjustment subject to a 3% cap and the stipulation that the fee will never be less than the preceding year.  For 2012, the landscape fee is $39,563.

(3)   Reimbursement for Event-Related Labor and Nonlabor Costs

Seattle Center charges an hourly rate to the festival for the cost of departmental staff involved in event set-up, event support, and event clean-up.  Services, materials, or supplies required for the festival, including utilities and fees, are also charged back to the Bite.

The agreement also encourages cross-promotional opportunities, such as linked websites, and provides one booth for the exclusive use of Seattle Center in which to promote Seattle Center activities and events.

Please check one of the following:

 

____    This legislation does not have any financial implications.

 

 

__X_   This legislation has financial implications.

 

 

Appropriations: 

 

Fund Name and Number

Department

Budget Control Level*

2012

Appropriation

2013 Anticipated Appropriation

 

 

 

 

 

TOTAL

 

 

 

 

*See budget book to obtain the appropriate Budget Control Level for your department.

 

Appropriations Notes: 

This legislation does not authorize appropriations.

 

 

 

 

 

Anticipated Revenue/Reimbursement Resulting from this Legislation:

 

Fund Name and Number

Department

Revenue Source

2012

Revenue

2013

Revenue

11410

Seattle Center

% of Food and Beverage Sales

$121,621

$124,050

 

 

Grounds Restoration Fee

$39,563

$40,350

 

 

Reimbursement for event labor and non-labor expenses

$59,903

$61,700

TOTAL

 

 

$221,079

226,100

 

Revenue/Reimbursement Notes:

Seattle Center’s 2012 Adopted Budget includes the 2012 revenues.  A cost of living factor is applied to derive the 2013 number.   

 

Total Regular Positions Created, Modified, or Abrogated through this Legislation, Including FTE Impact: 

 

Position Title and Department

Position # for Existing Positions

Fund Name & #

PT/FT

2012

Positions

2012

FTE

2013 Positions*

2013 FTE*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

 

 

 

 

 

* 2013 positions and FTE are total 2013 position changes resulting from this legislation, not incremental changes.  Therefore, under 2013, please be sure to include any continuing positions from 2012.

 

Position Notes:

This legislation does not create or abrogate positions.

 

 

Do positions sunset in the future? 

 

 

Spending/Cash Flow:

(This table should be completed only in those cases where part or all of the funds authorized by this legislation will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects).  Details surrounding spending that will occur in future years should be provided in the Notes section below the table.)

 

Fund Name & #

Department

Budget Control Level*

2012

Expenditures

2013 Anticipated Expenditures

11410

Seattle Center

Festivals

$139,000

$144,000

TOTAL

 

 

 

 

* See budget book to obtain the appropriate Budget Control Level for your department.

 

Spending/Cash Flow Notes:

Anticipated operating costs for hosting the Bite of Seattle are included and appropriated in Seattle Center’s annual operating budget and include:

 

2012

2013

Event Support (Sound, Stage, Admissions)

$43,000

44,000

Grounds and Facilities Support

$96,000

$99,000

TOTAL

$139,000

$144,000

 

Net Bite of Seattle Revenue

 

2012

2013

Total Revenue

$221,079

$226,500

Total Expense

$139,000

$144,000

NET

$82,079

$82,500

 

The net numbers above ($82,079 in 2012 and $82,500 in 2013, do not include Seattle Center parking revenue, which is not directly attributable to specific events.  However, we do know that the Bite of Seattle produces on average between $50,000 and $75,000 in additional parking revenue as compared to a regular summer weekend.

 

 

Other Implications: 

 

a)      Does the legislation have indirect financial implications, or long-term implications?

No.

 

b)     What is the financial cost of not implementing the legislation?  

Without legislation authorizing the agreement to produce the event, Seattle Center net operating revenues would decline, unless the Bite of Seattle were replaced by another event or events that produced a similar level of net revenue.

 

c)      Does this legislation affect any departments besides the originating department? 

Yes.  The Seattle Police Department (SPD) provides on-duty police for the Bite of Seattle, for which the Bite pays a fee of $34,367 to SPD.  In addition, the Bite hires off-duty Seattle Police to carry out its approved security plan.

d)     What are the possible alternatives to the legislation that could achieve the same or similar objectives?  

As one of three major festivals held annually at Seattle Center, the Bite of Seattle is recognized as a signature Seattle Center event. If this legislation is not approved, Festivals, Inc will have to find an alternate location for the Bite of Seattle or cease operation of the festival.  It would be difficult for Seattle Center to find an alternative event which provides net income and utilizes the full capacity of the campus. 

 

e)      Is a public hearing required for this legislation? 

 

No.

 

f)       Is publication of notice with The Daily Journal of Commerce and/or The Seattle Times required for this legislation?

 

No.

 

g)      Does this legislation affect a piece of property?

 

No.

 

h)     Other Issues:

 

List attachments to the fiscal note below:

There are no attachments to this fiscal note.