In a repeat performance of last week’s city council vote, it was a 3-2 split at the Feb. 1 meeting in favor of approving the agreement between the city of Hollister and Reno-based Roadshows Inc. that guarantees the 2016 Independence Day Motorcycle Rally will take place. Despite their strong objections against going ahead with the rally because of their concerns over past, and possibly future, financial losses, council members Karson Klauer and Mickie Solorio Luna were not able to convince their fellow council members to change their votes.
The agenda item pertaining to approving the resolution was just one of several that fell into the consent resolution category that are normally approved en masse unless a council member wants to pull the item for further discussion.
Klauer wanted one more time at bat to swing at the rally.
“It’s an interesting coincidence that the soft additional costs add up to the $45,000 that the hard costs were short to meet the $180,000,” Klauer said of the original amount that the city had asked potential promoters to pay in its request for proposals that Roadshows countered with a $135,000 offer. “I don’t think I’ve ever seen anything like this in a contract before.”
Klauer said it was odd that the council was trying to “backfill a deficit with fake money.” He said it’s money that should be going somewhere else. He said money gained from business licenses and sales taxes already belonged to the city and that it was deceiving to say the $45,000 would be added to the $135,000 to equal the $180,000 originally asked for. He said he would prefer that the contract was clear that Roadshows was willing to pay only $135,000 so the public would know that three council members (Victor Gomez, Mayor Ignacio Velazquez and Raymond Friend) agreed to take less than it would cost the city to finance the rally.
“If we accept the contract the way it is, that’s fine, but I want to make sure that the record states that I’m saying it’s $135,000. It looks like it’s $180,000. It’s not and we still don’t know what the hard numbers are in the past and we don’t know what they’re going to be in the future,” he said. “The best estimate of $45,000 is a joke to me. That’s just how we get to the number we said we wanted to try to please everybody.”
Luna said she agreed with Klauer. She said the city lost $37,730 because business licenses were not paid last year. She said she had a preliminary report that the Board of Equalization will present when it visits Hollister later in February. She said when a list of 199 vendors from the 2015 rally was sent to the Board of Equalization, it determined that 119 were registered with the board, leaving 58 who were not and another 22 that could not be tracked down. Of the 119 who were registered, she said only 26 paid any taxes for the city.
“When I was recommending the postponement of the rally so we could review everything and assure that everything we have is in order and the city is going to move forward in actually making a profit, I was not recommending a postponement of the rally for 2017,” she said. “I was just saying let’s get everything in order so we can move forward.”
She reminded the other council members of her concern that it was money that could be used for several projects within the city.
“We can’t continue to lose money year after year with a rally that only a few people enjoy,” she said.
Friend responded to Luna’s concerns and said that the contract spelled out that the promoter would be held accountable for collecting money from business licenses and sales taxes.
“Even though the city hasn’t done a very good job in doing that, putting the onus on the promoter can do that,” Friend said. “I agree with you that it should have been done better. That’s where the estimates come in at $25,000 (for licenses) and $20,000 for sales taxes. That’s going to be after the rally. That’s the way I read it.”
Velazquez asked City Attorney Brad Sullivan for clarification. Sullivan said the promoter, Randy Burke, has stated he will not allow vendors who have not paid taxes to participate in the 2016 rally.
“In the past, some promoters have collected those and not turned them over or included the business license in the amount for the space rented and then we try to collect it and they show us a receipt that the promoter has it,” Sullivan said. “We’re trying to put the burden on them so that it’s clear and that it’s not coincidental, but it’s showing that it’s a shared burden that can be collected up front and paid over to us shortly before the rally.”
Velazquez said that in the past, vendors were not registering properly and got away with it. That’s why, he said, the city is insisting that Roadshows has to prove each vendor has filed correctly.
Hollister resident Marty Richman commented that it was obvious that only three members were in favor of the rally and that it needs to be clear that there will be a $45,000 loss. He said there is just not enough time to prevent it and that it is implausible to think that there were be many improvements in 2016.
“If we lose $45,000 in 2016, let’s not do it again in 2017,” he cautioned. “We’ve known about these problems for years and we do not get them fixed.”
Richman suggested the council appoint a citizens committee to help out in gathering information and recommend improvements for the 2017 rally that the city’s staff, which he said is prone to political pressure, is too busy to do.
Jason Simms said he favored an oversight committee and volunteered to help.
“I appreciate your arguments, but I want to help everybody else who just wants to have a good time,” he said. “My daughter is going to be born in two weeks and I want her to experience her first one this summer.”
Friend addressed Richman’s comments, stating that, “We’re up against the wall for 2016, but 2017 is going to be a big deal and I think you’re right, we need to get some people in here who have the background that can help us identify these issues and solve them. I will take that as an assignment to make sure it happens.”
Councilman Victor Gomez said what Luna had brought up was important because there is a need to “know the numbers.” He said as a former business owner he is driven by facts, but conceded that the 2016 rally will be a “place holder.”
“I’m looking at this contract and the discussions we’ve had here and I just don’t have a compelling argument against it,” he said. “I’m not telling you this as a resident, I’m telling you as a business owner, when there’s money being shifted around throughout our community with an influx of money, we can’t just look at the sales tax. Sales tax isn’t going to be our savior because there’s a lot more that goes into it. I wish we could do some kind of economic impact report on this rally, but we’d have to pay $100,000 for a consultant and it’s not worth it. Ultimately, my decision is based upon the fact that we’ve had some consistent years that have been fairly successful, but to not have it, for me, is just not there and that’s why I’m supporting it.”
Velazquez reiterated Richman’s call for a citizen committee and said, “We have to make sure with future rallies we’re following up with all these items, and I think the committee is not about organizing the rally, but making sure everything is functioning correctly. It has to be run professionally and this year is late, unfortunately, but if we can take care of some of these issues this year, we’ll be that much better next year.”
With that, Friend made the motion to accept the contract and Gomez seconded it, and the votes fell into place again, 3-2.
Roadshows’ president Randy Burke was traveling at press time and unavailable for comment.
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