Business / Economy

OPINION: Is the biker rally a calculated risk or financial Russian roulette?

At best, it will be a break-even event; at worst, it could be a big money loser

On Dec. 19, 2017, I attended the Hollister City Council meeting to participate in the conversation and hear Council discussion regarding whether to approve an agreement with Roadshows Inc. to promote the 2017 Motorcycle Rally event. The City Council approved the event for 2017 by a 3-2 vote in favor. Mayor Ignacio Velazquez and council members Ray Friend and Roy Sims approved the event. Council members Mickie Luna and Karson Klauer opposed moving forward.

During the discussion, City Manager Bill Avera explained that when police personnel come from other jurisdictions to assist the city in policing the event the City of Hollister is responsible for the outside jurisdictions’ employees’ workers’ compensation insurance.

Mr. Avera was quoted by BenitoLink as saying: “We do not have any insurance that covers those (police from other cities) costs. Those costs are borne by the General Fund. In the event somebody does get hurt, we could be paying for that for a long time and that could be significant." He said he doesn’t know how much the event helps the city compared to the amount of risk in which it puts the city.

“It is a gamble,” Avera said. “Every year, we pray that nothing bad happens. We’ve been really lucky the last few years, but at some point that luck may just run out. So, for staff, this is purely a policy decision based on the amount you’re going to charge the promoter and whether or not you’re going to even have the rally. I can assure you that our police and fire departments will do everything they can to assure that we have a safe event for our citizens and our guests over that weekend. We will do as directed.”

To help put the potential costs in perspective, Mr. Avera indicated that the city is currently working with a city employee who broke one of their legs. He advised that injury could end up costing the city up to $500,000.

While the issue of the lack of workers' compensation coverage for the policing of this event should raise a huge red flag for council members, apparently Mayor Velazquez and council members Friend and Sims are willing to “roll the dice.”

In response to the risk, BenitoLink quoted Mayor Velazquez as saying: “And we can always worry about something happening. There’s always a chance of something happening. I have a hard time living that way. We need to embrace it and support it, support the promoter so he succeeds and makes as much money as possible, because then we succeed. If we’re going to stop, again there’s no point in doing this. It makes no sense."       

For a City Council that has had a reputation for being fiscally responsible and for a City Council that has committed to being fiscally responsible, this seems highly irresponsible. Three of the five council members want the rally because they simply want it, not because Hollister needs it. It’s apparently a rally at any risk.

Some recent examples of the City Council’s past actions to be fiscally responsible, or not, are:

On Nov. 7, 2016, Mayor Velazquez voted "no" to a resolution for the City to donate $2,500 to the “12 Days of Giving” campaign.

On Nov. 21, 2016, council members Friend, Luna, Klauer and Gomez voted no to a resolution to pay 40 percent of an unknown amount to conduct a study with San Benito County and the City of San Juan Bautista regarding the feasibility of creating a fire district or entering into a Joint Powers Agreement to provide for fire service for the region. Mayor Velazquez supported the resolution and lectured the Council that if the current funding stream went away, they would have to lay off 15 firefighters. Nice touch, considering earlier in the meeting he welcomed seven new firefighters and a code enforcement officer to the city family.

On Dec. 5, 2016, Councilman Sims voted "no" to a resolution to process a public assembly permit and make necessary improvements at the Brighton Spray Field for the Olive Festival because of unknown costs.

Additionally, the previous council deadlocked on whether to approve up to $20,000 to host the 2017 Hollister Air Show. My understanding is the Air Show has been canceled due to lack of council funding support.

During public comment, Councilman Friend apparently took offense to my choice of words when I said that the city lost $90,000 on the 2015 rally when a different promoter refused to pay the city the balance owed. My apologies Councilman Friend; my choice of words was not intended to offend, but rather focus on the lost revenue. Maybe it was a poor choice of words or semantics, but either way, to date, the city has not received $90,000 it is owed and as I understand it the city is now being sued by the previous promoter.

As a resident of the city, I expect more from our City Council members. In November, the voters overwhelmingly approved Measure W to supplement the city's General Fund to maintain current, essential city service levels. To proceed with the rally as it is currently proposed seems disingenuous of the council members approving the event given the financial condition of the city which requires the need for the Measure W funding stream.

In addition, to my knowledge, this event is a “for-profit” event. Unlike events held by other neighboring cities where organizers donate a portion of the proceeds to local nonprofit organizations and/or charities, that does not occur with the motorcycle rally event.

In other regions where special events are proposed, a Chamber of Commerce-like organization can usually forecast the economic impact the event will have on the region. I am surprised that that the Hollister Downtown Association or the San Benito Chamber of Commerce or a like organization has not been requested to provide such information in the past or the present.

When the public conversation is about the rally it seems to always be talked about in approximates. A wise city manager I worked for in another jurisdiction once said to me “approximately right is precisely wrong.”

Einstein defines insanity as doing the same thing over and over again and expecting a different outcome.

Based on the information provided, at best, we can hope for a break-even event with no clearly defined financial benefit to the city or the taxpayer. At worst, the city as directed by a simple majority of the City Council could lose a significant amount of taxpayers’ money. City Manager Avera, please continue to pray that nothing bad happens at the 2017 rally. Clearly three of the five City Council Members are willing to play financial Russian roulette with the city’s resources!

It’s not about the event, it’s about the financial risk versus reward.


Tim Burns ([email protected])



Tim Burns