It was just last month that Fort Smith Director Kevin Settle was questioning why the city was allocating resources to various festivals and events in the downtown area instead of requesting ticket price increases to cover the cost. Now the city administration is coming forward to defend the funding.
Deputy City Administrator Jeff Dingman said the city is always looking for ways to save money, even though the Board of Directors passed the city's original budget of $47.9 million.
"I believe (the city's share of funding) has gone down as far as participation in those (downtown) events," he said. "it gets constantly looked at just for that reason – any of those that could offset their cost by raising admission prices."
Of the events sponsored by the city's $55,000 budget allocation for downtown activities in 2014, the largest will be the Riverfront Blues Fest at $15,000, along with the Mayor's 4th of July, the Festival on the Border and the Heritage Festival.
Settle had asked why the organizers of the event could not raise prices by $3 per ticket, resulting in additional revenues of $15,000 based on 5,000 attendees.
Dingman said raising rates would not be so cut and dry.
"Helping to sponsor some events downtown, particularly at the Harry E. Kelley Park, the participation from the city generally helps with logistics, toilets, things like that to help these events get pulled off."
Asked to quantify the return on investment that the city received from spending tens of thousands of dollars in tax dollars on event sponsorships, Downtown Development Coordinator Jayne Hughes said she had no way of detailing an economic impact or an impact to sales taxes the city received from large-scale events that bring in increased hospitality taxes.
"We can't go in and track sales taxes," she said. "We get that (information) directly from the state."
She said while she had no formula for figuring out what impact city funding of downtown events had on the city's tax base, she said quality of place was the primary purpose for sponsoring the events.
"We talk about paying off - when I see thousands of people down there enjoying themselves and being involved in their community and people coming from out of town, there's a direct pay off for me."
She said events sponsored by her department are primarily non-profit fundraising events, such as the Riverfront Blues Festival, meaning all monies raised from the events would benefit the community in some form or fashion.
"Honestly, those events are designed to not only generate activities for our citizens, but also to go back into the community themselves," she said. "Each non-profit event has some type of mechanism to (put) those dollars back into the community, whether (music) in the schools or different non-profits they give back to."
The amounts spent in previous years for downtown event sponsorships have varied, with fiscal year 2010 receiving an allocation of $54,000, FY2011 at $55,000, FY 2012 at $41,000 and FY2013 at $46,000, a figure that is 16.36% smaller amount than FY2014's allocation.
Hughes said part of the reason the last two years have seen the smaller amounts is due to the city's lower sales tax revenues, which resulted in across the board cuts of 4% to all city departments in early 2013.
"We definitely had quite a bit of cuts from the beginning. I took the same cuts that everyone did in March. Across the board, everyone took the same amount of cuts."
Dingman said the emphasis cannot only be about the bottom line dollar amount. It has to be about promoting downtown.
"We've been trying to brand the downtown as an area to live, work and play and helping these events happen downtown. As a marketing tool, it's one way to put (money into) these events downtown and bring visitors downtown. It's a way of trying to keep downtown vibrant. …One objective is certainly to support the businesses that are down here, but also to create a vibrant environment. It creates a sense of what the city is."