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City officials are weighing the future of the Hollister Air Show after receiving a report that it lost money for the fourth time in its five-year history, despite an increase in attendance. In a report to the Hollister City Council on Sept. 8, Management Services Director Mike Chambless said that the show received positive feedback this year, though attendance was lower than expected.

“The air show moved to Father’s Day weekend this year with the hope it would affect attendance in a positive manner,” he said, noting the event’s switch from Memorial Day weekend. “People enjoyed it; the schedule worked well … (but) our cost controls got a little away from us this year.”

The show brought in $38,267.69 in revenue against $63,829.91 in expenses — a deficit of $25,562.22. In 2013, the airshow ran a deficit of just over $1,400, following losses of $17,682.81 in 2012 and $2,809.18 in 2011. The only year the event has made a profit, according to city records, was 2010 — its inaugural year — when it made just under $4,500 after spending approximately $19,000.

Chambless said the need to replace a performer at the last minute due to an accident and competition for hotel space because of a large softball tournament in Santa Clara County were challenges. So-called “gate leakage,” however, was a larger factor. The company contracted to do gate security “failed completely,” Chambless said in his report, noting that gate guards failed to check that visitors had paid admission and didn’t report when a person entered the closed side of the airport “thus endangering his life and creating a violation of FAA regulations.”

The security failures cost the show an estimated $7,000 to $10,000 in unsold tickets, Chambless said. “The security company was so embarrassed by their officers’ performance, they did not charge us for the personnel,” he said. “Unfortunately, this does little for our bottom line.”

Other cost factors included a $3,000 agreement with the Council of Governments to advertise the event at bus shelters in exchange for use of a free shuttle, but only six people used the shuttle during the airshow weekend. Vendor revenue was down, despite a decrease in the space rental fee from the previous year, hotel costs were up because of lack of vacancies, and a long-running car show across from the airport impacted attendance, Chambless said.

His report offered three options for the airshow going forward: cancelling the event, hold the show on alternating years, or continuing it as an annual event.

“The airport budget really can’t afford a $25,000 hole in it every year,” Chambless said, so cancellation “would plug the hole. It’s also probably the easiest thing to do.”

Holding the show on alternating years is not a preferred option, he said, because it would make it more difficult and more expensive to hire acts as well as retain volunteers.

If the airshow remains an annual event, Chambless recommends the airport contribute 2 percent of its budget — $15,000 — with a matching amount from the city’s general fund budget. If sponsorships held steady under this scenario, Chambless said the event would break even, particularly if the event was “slightly scaled back to reduce rising costs.”

“We cannot buy the good will we get from this event,” he said.

Councilman Raymond Friend thanked Chambless for his honesty and encouraged the council to carefully weigh its options before making a decision about an event that he called “an asset.”

“Maybe there are alternatives for different sponsorships or a different group to get behind the airshow,” he said. “I’d like to think about this and work on some alternatives … rather than make a snap decision tonight. I just hate to make a quick judgement without chewing on this (report) for a while.”

City Manager William Avera said a decision on the airshow’s future will come before the council at a later date. He said what Chambless “does at the airshow is imperative for the community.” Avera also said more television advertising in the Bay Area could help attendance. Local residents made up 44 percent of the airshow’s attendees, with 56 percent from out of the area — including 10 percent from San Jose.

Councilman Victor Gomez said that he was concerned about the airshow’s revenue discrepancy, though he understands the economic impact of the event.

“If this were a break-even event, it would be a lot easier to swallow these economic results,” he said, adding that he would prefer not to use general fund and airport fund subsidies to keep the event running. “There’s a passionate group of pilots and aircraft supporters out there. I think that we can motivate the group to have some fundraising efforts to help pay for this event. I think we need to explore all the options. I need to digest all this information and cry a little bit.”

Mayor Ignacio Velazquez said he saw “positive signs” in the airshow report, including increased attendance.

“I see nothing but an upside here,” he said. “I think Father’s Day weekend was the perfect weekend. I see positive growth here. It’s just a matter of reallocating some dollars and I can see this coming back in the positive next year if we do that. It wasn’t too long ago that we were losing money with the (motorcycle) rally.”