NEW BUSINESS  14.

COMMITTEE MEMORANDUM

HISTORY:

Over the past several months, the Mayor and Commission have been asked to consider funding to support special events -- in some instances funding has been requested to fill a fundraising gap, to help offset City service costs, to support local non-profit organizations, and often to help launch first time events on Miami Beach.  As these requests have been considered, Administration was asked to review and propose criteria for this type of special event sponsorship.  At the June 7, 2017 Commission Meeting, Commissioner Steinberg specifically asked staff to look at the issue holistically and to come up with funding protocols.

The City of Miami Beach currently has two formal and fully audited funding entities -- the Miami Beach Visitor and Convention Authority (VCA) which funds activity supporting tourism in the City, and which is an audited grant administered by a Board of Directors; and the Cultural Arts Council (CAC) grant which is focused on supporting not-for-profit arts and culture groups and which is also an audited grant administered by the Cultural Arts Council members.

These two entities are designed to support promote tourism and media exposure, and to enhance the arts and cultural landscape in the City of Miami Beach. 

VCA

The VCA was created under Chapter 67-930, Section 8 of the Florida Statues, including 102-254 of the Code of the City of Miami Beach.  The VCA is appointed by the City Commission to administer a portion of the collections of the municipal resort tax determined by a legislated funding formula in order to promote tourism and convention center business.  A budget revenue projection is provided to the MBVCA by the City of Miami Beach Budget Office annually based on 5% of the 2% Resort Tax, less 4% for administrative allowance.

The adopted VCA budget for FY 2017/18 is $2.908 million, of which $1,700,500 is allocated to the Tourism Advancement Program (TAP)  that promotes Miami Beach as a sophisticated tourist destination by increasing the number of visitors; through enhancement of visitors' experiences; through the allocation of funds granted to events or programs that bring visitors to the City of Miami Beach and strengthen the City's brand. 

In fiscal year 2016/2017, the VCA funded the TAP in eight categories:

1. Major One Time Special Event

2. North Beach Incentives

3. Special Events Recurring

4. Special Projects

5. Special Projects Recurring

6. Tourism Partnerships

The VCA criteria for grant funding includes:

1. Contracted room nights in Miami Beach hotels

2. Media impressions secured/contracted

3. A contracted broadcast TV or film feature documenting the event in Miami Beach

The VCA Board will evaluate applicants based on these criteria, and then determine funding.  VCA grants are awarded on a reimbursement basis, following a final report documenting all criteria have been met and satisfied; the event has been fully executed as described in the application; and all criteria have been met. 

Applicants must meet two out of the three substantial criteria in order to qualify. Most grants range from $10,000-90,000.

CAC

The CAC is established by City Code which states that the CAC has

"the purpose of developing, coordinating and promoting the performing and visual arts in the city for the enjoyment, education, cultural enrichment and benefit of the residents of and visitors to the city. In furtherance of this purpose, the council shall attempt to accomplish the following objectives:

(1) Develop and prepare a master plan for the arts. The master plan shall be based upon a survey of available resources and shall assess and prioritize the needs of the various arts organizations within the city.

(2) Develop and establish criteria and guidelines for review and funding of qualified not-for-profit arts organizations, as such shall be approved by the mayor and city commission.

(3)  Stimulate greater governmental and public awareness and appreciation of the importance of the arts to the residents of and visitors to the city.

(4) Encourage and implement greater and more efficient use of governmental and private resources for the development and support of the arts.

(5) Encourage and implement opportunities for city residents to participate in artistic activities.

(6) Promote the development of city artists and institutions and community organizations sponsoring arts activities and audiences.

(7)  Survey and assess the needs of the arts, and of the people of this city relating thereto, and make such information promptly and regularly available to all interested agencies and persons upon request.

(8) Support and implement the preservation and growth of the city's artistic resources.

(9) Foster the development of a receptive climate for the arts to culturally enrich and benefit the citizens of the city in their daily lives, to make city visits and vacations all the more appealing to the world and to attract to the city residency additional outstanding creators in the field of the arts through appropriate programs of publicity, education, coordination and sponsor activities such as the presentation of lectures and exhibitions and central compilation and dissemination of information on the progress of the arts in the city.

(10) Encourage and coordinate the artistic activities of other governmental agencies, including those concerned with the public educational system.

(11) Provide city cultural organizations with information and assistance.

(12) Coordinate with and assess the roles of other organizations, institutions and agencies, public and private, which provide similar functions and serve a similar purpose."

Eligibility for a CAC grant includes the following:

1. Non-profit status; 990 submission; Organizational Operating Budget; Board of Directors

2. Organizations must be in compliance with all previous grants from the City

Once an organization meets these basic requirements, the CAC then evaluates each applicant and makes a determination based on artistic merit.  CAC grants are awarded in two installments: upon execution of a contract, and upon submission and approval of a final report. 

CAC grants are also designed to be a 1:1 match, so that organizations must fundraise independently to match City funds. Most grants range from $10,000-35,000.

The CAC adopted budget for FY 2017/18 is $1,359,000, of which includes Cultural Arts grant awards totaling $850,000.

Further, the City also has a Community Benefit Fund which represents a portion of ticket sales from The Fillmore, and which is currently used to fund rent waivers for cultural events at both The Fillmore and The Colony Theatre. Arts and cultural organizations must meet non-profit status requirements in order to apply.  These grants are also approved and awarded by the CAC.

ANALYSIS:

Due to the potential for an overwhelming amount of City funding requests for special events and the many associated concerns regarding the thorough and careful auditing of production budgets, fundraising, contracts, experience and track record, accountability and transparency, the Administration is recommending that all City funding flow through Commission appointed bodies with full auditing procedures, criteria, and reporting involved.

Staff has met with the VCA and CAC to explore best practices in regards to vetting and consideration of special event funding. Based on those meetings, the Administration recommends the following new guidelines for all City funding of special events:

1. All special event funding must flow through either the VCA (tourism and media related events)

 or the CAC (arts and culture events).  In the event that a special event is both culture and tourism related, the applicant would choose which funding entity to pursue.

2. In order to address special event funding needs which do not meet the associated criteria for either the VCA or the CAC, but do contribute to the vitality of the City, the VCA would need to create a new Community Event Fund with associated criteria and review processes to support events which enrich the fabric of the community but do not reach the level to qualify for VCA or CAC grants . Similar events to this in the past have been Foot Volley, Fit Fest, etc.

The City would need to identify to funding annually to support the Community Event Fund as VCA is unwilling to commit any of their existing funds; and specific funding criteria would need to be formalized. Given the smaller organizations typically involved in these types of grants, it is recommended that application periods occur several times during the year, but with applicants limited to applying once per year. Funding grants would be in the range of $10,000 to $20,000 per event

3. Event funding should be subject to funding levels tied to room nights or cultural event participants, for VCA and CAC grants, respectively.

4. Funding should be subject to a declining scale, thereby providing access to funding for new events over time.

5. Sponsorship funding should preclude the applicant from separately applying for any sponsorship or fee waivers from the City, other than waivers for special event application fees, square footage fees, park user fees, vehicle beach access pass fees, and police and fire administration fees which may still apply.

The Administration would recommend that this approach preclude any direct funding by the City commission, otherwise applicants will continue to come to the City despite funding from other entities.  However, we would need to work with VCA to establish revised upper limits to their funding, particularly for events which significantly exceed priority 1 room night criteria and have a citywide impact.

The City may also want to consider grandfathering existing events that may exceed the funding limits, e.g. Air and Sea Show and SuperBowl exceed existing limits and may need to be grandfathered depending where new funding  limits are set.

CONCLUSION:

The administration is seeking direction regarding these recommendations.