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Commission studies hidden costs of SXSW

Monday, September 15, 2014 by Gene Davis

One day after the news that the 2014 South by Southwest Music, Film and Interactive Festival generated $315 million for the city, Public Safety Commissioners heard about the financial and staffing impacts that special events place on City of Austin departments.

Specifically, a report presented to commissioners stated that city departments spent $4.265 million in unrecouped costs related to special events in 2013. Public Safety Commission Chair Kim Rossmo said people should take these costs into consideration when reading about a festival’s reported economic impact. He added that economic impact reports are often biased and don’t take into consideration the businesses people don’t visit because of a special event.

“I want us all to be very, very clear that these reported direct impact studies that say all this money that these events bring into the city are really talking about a redistribution of all the money,” Rossmo said. “Obviously there is some positive impact, but probably not nearly as great as they claim.”

Commissioners at previous meetings hammered on the importance of figuring out the unrecouped costs that emergency services departments face when covering special events. During Friday’s meeting, Commissioner Mike Levy said those unquantifiable costs were his main concern.

For instance, Levy said, the Austin Police Department pulls officers off their usual beats to cover an event such as SXSW.

“Basically, other responsibilities and roles are being compromised because these guys are putting on uniforms and being on the street,” he said.

In response, APD Assistant Chief Brian Manley said although special events require APD to reassign officers, there is also a related benefit to the reassignments.

“These are officers that may be away from the streets for a while, and it keeps them current with activities on the street,” he said.

During the 2013 SXSW Festival, APD accrued an overtime cost of $497,000. Because City Council passed a resolution waiving $340,000 in fees for SXSW, APD has the ability to bill the festival for the $157,000 difference. However, Manley said the department is working to determine whether the overtime costs are directly related to SXSW or to unofficial events.

The meeting saw some confusion on whether the report and discussion should revolve around SXSW or special events in general. Although the commission’s agenda listed the item as a SXSW report, the discussion and presentation were actually about the proposed Special Events Ordinance.

Zilker Neighborhood Association member David King got into a heated argument with Rossmo over the issue.

“I do plan to make a complaint to the appropriate authorities about this not being properly posted,” King said.

During his presentation, Austin Center for Events head Bill Manno laid out the changes made to the proposed Special Events Ordinance since first reading. The proposed changes include removing neighborhood block parties from the ordinance and changing several definitions.

Michael Whellan, an attorney representing SXSW, told commissioners they should have concerns with the ordinance as a whole. He said there are already rules on the books that cover concerns such as inspection of venues and notifications before special events, and that the ordinance would just layer rules upon rules, potentially resulting in more confusion and harming public safety.

“We have a great relationship with the city; this is just the wrong ordinance,” Whellan said. “It doesn’t work.”

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