In FY 1995-96, 706 special events were held each year in the City. However, for many special events, the Police Department provides police coverage at relatively little or no cost to the event sponsor. In FY 1995-96, the Police Department incurred $7,303,564 in expenditures in order to provide police coverage at 706 special events. Of this $7,303,564 cost, only $3,157,296 was collected from event sponsors, resulting in a net cost to the General Fund of $4,146,268. A breakdown of the types of events, the number of hours of police coverage provided, the total cost per event type, collected fees, and the net cost to the General Fund of each type of event is shown in Table 4.2.1 below:

Table 4.2.1
Special Events Costs and Revenues by Event Category
San Francisco Police Department, FY 1995-96

Existing Mechanisms for Special Event Cost Recovery

As reflected in Table 4.2.1 above, the Police Department tracks special event costs for nine distinct categories of events, yet only a portion of the Department"s total costs are reimbursable under existing City regulations. The existing regulations which authorize the Police Department to recover its costs of providing special event coverage are described in further detail below.

Athletic Events

San Francisco Administrative Code Sections 2.75-1 through 2.75-5 govern the cost recovery procedures for athletic events. Under these sections, the Department is authorized to collect 100 percent of its costs associated with such events, such as Bay to Breakers, the San Francisco Marathon, Bridge to Bridge 5K & 10K Walk/Run, and 12 other annual events.

Parades and Celebrations

San Francisco Police Code Sections 366 through 379 contain provisions related to Police Department cost recovery for parades. According to the Police Department"s Special Events Management and Planning Unit (SEMPU), because parades represent cultural statements akin to First Amendment expressions, police coverage is provided for each parade at no cost to the parade sponsor.

However, SEMPU further advises that parades should be distinguished from celebrations, which are often held concurrent with or following parades. Examples include concerts; the Independence Day, Halloween and New Year"s Day celebrations; grand openings; festivals; and, other events. Celebrations are often sponsored by organizations with non-profit status, and they typically generate significant revenues through concession sales. However, the Police Department is not authorized to obtain cost recovery for police coverage provided at celebrations.

Street Fairs

Under Administrative Code Section 2.70-6, the City is authorized to collect fees for the temporary use of streets for street fairs. A street fair is defined as "any social or community event . . . in which any group of persons convenes to celebrate their community or neighborhood on any street in the City." Street fairs are therefore distinct from "celebrations" since the Police Department is authorized to obtain cost recovery for services that are provided.

An organization which desires to hold a street fair is required to file an application with the Director of the Interdepartmental Staff Committee on Traffic and Transportation (ISCOTT), which consists of members of the Department of Parking and Traffic, the Department of Public Works, the Police Department, the Fire Department, the Department of Public Health, Municipal Railway and the Department of City Planning. Upon reviewing an application, ISCOTT is authorized to charge the sponsoring organization various fees, based on the types of activities which are planned for the street fair and the services to be provided by the City. Such fees may consist of application fees; permit fees for the use of fireworks, the sale of food and beverages and/or other activities; Fire Department inspection fees; MUNI fees to divert vehicles to alternate routes; and, Police Department fees. The fee charged on behalf of the Police Department is limited to 40 percent of the Police Department"s projected costs, or $2,500, whichever is less. All fees collected by ISCOTT are deposited into the General Fund.

Additionally, ISCOTT may waive all or part of the Police Department fee upon a demonstration by the event sponsor that it is unable to pay the full fee. If the sponsor"s request is denied by ISCOTT, the sponsor may file an appeal with the Board of Supervisors. In FY 1995-96, four event sponsors were granted fee waivers by either ISCOTT or the Board of Supervisors.

In FY 1995-96, ISCOTT collected $44,390 in fees on behalf of the Police Department for the 28 street fairs held during that year. However, the Police Department"s actual expenditures incurred to provide police services for those 28 fairs were $595,426 in FY 1995-96, or $551,036 more than the $44,390 which was collected in fee revenue (12.4 times more than the amount collected by ISCOTT). The actual cost per street fair ranged from $661 for the Visitation Valley Festival to $145,925 for Carnaval. Although the average cost per street fair was $21,265, an average of only $1,585 was collected for each fair.

Special Law Enforcement Services (SLES)

SLES funds are received under Section 10B of the Administrative Code from persons or agencies who pay time and one-half plus 22.6 percent for administrative overhead to have off-duty police officers deployed at certain types of events, such as Giants and 49ers games, movie productions, construction projects, sign postings and other events. Under the Administrative Code, all SLES funds are to be deposited in a restricted fund (the SLES fund), with the exception of the 22.6 percent amount for administrative overhead, which is to be deposited into the General Fund. SLES is distinct from Extended Work Week (EWW) overtime because EWW overtime is paid for with the General Fund, while SLES costs are paid with outside funding sources.

In FY 1995-96, the Department collected $3,112,906 in SLES payments (including the 22.6 percent for administrative overhead). However, the Police Department has waived the payment of SLES administrative overhead for several organizations, such as movie production companies, without proper authority. Additionally, none of the SLES administrative overhead payments received by the Police Department have been deposited into the General Fund, as is required under the Administrative Code. These funds have instead been retained by the Police Department in the SLES fund. The Police Department argues that by retaining the overhead payments in the SLES fund, cash flow problems are averted. Based on the total amount of SLES payments received by the SFPD in FY 1995-96, the amount of overhead retained in the SLES fund could be as much as $703,517, but is probably less because the Police Department inappropriately waived the overhead charges to some organizations. As described below, the Controller should conduct an audit of the SLES fund to determine the total amount due to the general fund for overhead payments which have been retained by the Police Department.

Furthermore, even though SLES funds are intended to recover the entire cost of providing police coverage for a particular event, the actual cost of providing police coverage is in many cases higher than the amount collected. For example, each year the Police Department reaches separate agreements with the San Francisco Giants and the San Francisco 49ers regarding the level of police coverage to be provided at each baseball and football game, respectively [1] . Under these Memorandums of Understanding (MOU), these two teams are also not required to pay administrative overhead, as is required of other private or non-profit organizations which utilize SLES services. Moreover, each team is only required to pay for police coverage that is provided inside the stadium. Thus, the cost of providing police coverage on game days outside the stadium (in parking lots and on nearby streets) is absorbed by the General Fund. In FY 1995-96, the Police Department provided 29,788 hours of police coverage for 97 sporting events at 3 Com Park, including 86 baseball games and 11 football games. The total cost of providing police coverage for these 97 games both inside and outside the stadium was $1,105,361. Of this amount, only $340,069 or 31 percent was paid for with SLES funds received from the Giants and the 49ers. This amount represented the cost of SLES services inside the stadium during athletic events. The remaining $765,292 in expenditures were paid by the General Fund.

Opportunities for Improving Special Event Cost Recovery

Given the large disparity in revenues collected for special events relative to the actual cost of providing police coverage for those events, the Board of Supervisors may wish to consider amending the Administrative Code to expand and/or increase the fees currently charged for police coverage of special events.

SEMPU is currently developing various proposals to increase the level of special event cost recovery for the Police Department. The Police Department should prepare a report for the Board of Supervisors which outlines these proposals in detail. Based on our discussions with the Police Department regarding their preliminary proposals, this report might include the following policy options:

• Section 2.70-6 of the Administrative Code could be expanded to authorize the Police Department to obtain cost recovery for celebrations in addition to street fairs.

• Section 2.70-6 could be amended to remove the current limit of $2,500 per street fair, thereby permitting the Police Department to collect 40 percent of its cost to provide police coverage at street fairs.

  As previously noted, the cost of providing police coverage at street fairs was $595,426 in FY 1995-96, or $551,036 more than the $44,390 which was collected in fee revenue. If the limit of $2,500 per street fair were removed from Administrative Code Section 2.70-6, the Police Department could collect up to 40 percent or an average of $8,506 per street fair (40 percent of the current average cost per street fair of $21,265), an increase of $6,921 from the current amount collected of $1,585 per street fair. This would result in additional revenue of approximately $193,788 per year for cost recovery for street fairs ($6,921 per fair x 28 street fairs per year).

  If Section 2.70-6 were expanded to include celebrations in addition to street fairs, up to an additional $309,819 could be collected on an annual basis as cost recovery for police coverage of celebrations (40 percent of the $774,548 cost of police coverage for celebrations shown in Table 4.2.1). These two changes would result in total additional revenues of $503,607 per year.

• Amend Section 2.70-6 to the Administrative Code to impose an additional fee on event sponsors for the cost to Department of Parking and Traffic (DPT) to provide traffic management services at street fairs and/or celebrations. SEMPU advises that the amount of this fee could be set at 25 percent of the projected costs to provide such services, but not to exceed $2,000 per event.

  SEMPU advises that since the Police Department is currently responsible for providing traffic management services at special events, the cost of this service is absorbed by the Police Department. However, SEMPU advises that the Police Department is currently in the process of negotiating with DPT to transfer the traffic management function to DPT. Thus, the Police Department"s overall cost to provide coverage at special events would decline and DPT"s cost would increase. SEMPU further advises that imposing this additional fee would permit DPT to obtain cost recovery for providing traffic management services at street fairs and/or celebrations once this function is transferred to DPT.

• The Administrative Code also could be amended to permit the Police Department to obtain full cost recovery for deploying and retrieving barricades at special events. SEMPU advises that, under current practice, event sponsors are charged for this service only if the event falls into one of the categories for which partial or full cost recovery is currently authorized under the Administrative Code, such as street fairs, athletic event or SLES events.

  SEMPU advises that, if either the Police Department or the event sponsor determined that the deployment of barricades was necessary, the event sponsor could have the option of (a) paying the SFPD its full cost to deploy and retrieve the barricades; (b) pay the SFPD to rent the barricades while assuming the responsibility for deploying and retrieving the barricades; or (c) obtaining and deploying barricades through the private sector, so long as the number and locations of the barricades meet SFPD specifications.

As of the writing of this report, the Police Department was unable to provide an estimate of the potential increase in revenues resulting from implementing the above policy options. However, as noted above, the estimated increase in revenues resulting from amending Administrative Code Section 2.70-6 to remove the existing $2,500 limit on cost recovery for street fairs and to impose a fee for cost recovery of police coverage for celebrations would be approximately $503,607 per year.

Additionally, the Controller"s Office should perform a financial audit of the SLES Fund as part of its current review of revolving funds. Such a review could potentially result in additional revenues accruing to the SLES and the General Funds of an undetermined amount.

Lastly, the Police Department should negotiate with the San Francisco 49ers and San Francisco Giants regarding the existing agreements for providing police coverage at sporting events in an effort to increase the level of cost recovery. Such negotiations should take into account the cost of deploying police officers both inside and outside of the stadium and should take place prior to the opening of the planned Downtown Ballpark and any replacement facility for 3Com Park at Candlestick Point. This would result in additional SLES revenues of up to $765,292 per year (equivalent to the $1,105,361 cost of police coverage for football and baseball games less the $340,069 in SLES revenues currently collected by the SFPD).

Conclusions

The Police Department provided police coverage for 706 special events in FY 1995-96, for a total cost of $7,303,564 to the Police Department. However, the City was reimbursed by outside parties for only $3,157,296, or 43 percent of total costs.

The Police Department provides police coverage at many special events at little or no cost to the event sponsor. Further, the San Francisco Giants and the 49ers pay only 31 percent of the cost of providing police coverage at 3 Com Park.

The Police Department has waived the payment of SLES administrative overhead for certain organizations without proper authority. Additionally, payments received for SLES administrative overhead do not accrue to the General Fund, as is required under the Administrative Code.

The Police Department should prepare a report for the Board of Supervisors containing policy options which could further offset the high cost of providing police coverage at special events.

Additionally, the SFPD should negotiate with the 49ers and the Giants regarding the existing agreements for providing police coverage at sporting events in an effort to increase the level of cost recovery.

Lastly, the Controller"s Office should perform a financial audit of the SLES Fund as part of its current review of revolving funds.

Implementation of the policy options contained in this section would generate additional revenues to the City of between $503,607 and $1,268,899 per year.

Recommendations

The Chief of Police should:

4.2.1 Direct the Special Events Management and Planning Unit (SEMPU) to work with ISCOTT to prepare a report for the Board of Supervisors which would list various policy options for generating additional revenues in order to further offset the cost of providing police coverage at special events.

4.2.2 Negotiate with the San Francisco 49ers and the San Francisco Giants regarding the existing agreements for providing police coverage at sporting events in an effort to increase the level of cost recovery. Such negotiations should take place prior to the opening of the planned Downtown Ballpark and any replacement facility for 3Com Park at Candlestick Point.

The Board of Supervisors should:

4.2.3 Consider the policy options of (1) modifying the Administrative Code, as described in this report; and, (2) increasing fees for police coverage at professional sporting events held at 3 COM Park.

The Controller should:

4.2.4 Perform a financial audit of the SLES Fund as part of its current review of revolving funds.

Costs and Benefits

There would be no additional cost to implement these recommendations.

Implementation of the policy options described in this report would generate additional revenues which could be used to offset the high cost of providing police coverage at special events. These policy options, if implemented, could result in additional revenues of between $503,607 and $1,268,899 per year to the City.

An audit of the SLES Fund by the Controller"s Office could potentially result in additional revenues accruing to the SLES and the General Fund of an undetermined amount.

Footnotes

1. According to SEMPU, these agreements do not receive or require approval by the Board of Supervisors.