Des Plaines takes heat for outsourcing festival

Tighter budgets and growing demands on municipal services have forced many suburban towns to scale back community events, cancel fireworks and parades, and outsource hometown festivals to save money and staff time. After a 10-year run, Des Plaines this year got rid of its signature festival — the Taste of Des Plaines.

City leaders instead have allowed Chicago-based Special Events Management, the largest producer of street fests and festivals in Chicago and the suburbs, to step in and replace it with the four-day Des Plaines' Summer Fling, July 21 through 24. Des Plaines is not alone.

Towns from St. Charles to Elk Grove Village outsource their most popular community events and festivals, said Hank Zemola, CEO of Special Events Management.

“I think the normal trend for communities is either not to do anything at all or find another way to do it,” Zemola said. “It just becomes unaffordable. If you really looked at all those expenses of public servants who volunteer, it's just too costly. I've seen people overpay so dramatically. It's not their area of expertise. Talent buying is an art form. Municipalities typically don't have good contacts with the corporate sponsorship world, corporate marketing.”

Special Events Management produces roughly 30 suburban events yearly, including Libertyville's Stepping Up to Wellness cancer walk in May; the Bloomington Gold Corvette Show in St. Charles, which wraps up today; Lake Forest's July 4 festival and fireworks; the Tour of Elk Grove, Aug 5-7; the Wood Dale Prairie Fest, Aug 11-14; St. Charles' Scarecrow Fest, Oct. 7-9; and the Hinsdale Rotary Run, Oct. 16.

“The costs to run an event are escalating,” Zemola said. “The costs of goods and services have tripled and quadrupled, and insurance used to be $500 or $600; now it's pretty typical to be $4,000 or $5,000.” Des Plaines Mayor Marty Moylan said the city couldn't afford to be in the festival business anymore. “It was costing us a lot of money. It was costing us major staff time,” Moylan said.

Preparation for the Taste tied up several city departments — city clerk, mayor's office, media services, and legal — for weeks, he added. Yet, the decision to drop the Taste has created bad blood between the mayor and members of the city's Special Events Commission, whose volunteers organized the event for 10 years.

“We need to know that we are appreciated,” said Richard Prochenski, Des Plaines Special Events commissioner. “Half of our members are volunteering on expired commissions. Reappointments have not been made.”

Commissioners said Moylan wanted the commission to apply for nonprofit status, but the members all have full-time jobs.

Special Events Commissioner Tom Christiansen, a former Des Plaines alderman, said the Chicago event organizer stands to make thousands of dollars off residents, while the city gets nothing in return. The city at least should have negotiated a kickback to help pay for its canceled July 4 fireworks, he said. “People are still shocked when they hear we are not having fireworks,” Christiansen said. “They are the silent majority.”

Proceeds from the Taste, which was the commission's premier moneymaker, covered the festival's own costs, and supported other community events such as the July 4 fireworks and parade, the Pet, Pooch & Pedal Parade, and the New Year's Eve party, which was axed in budget cuts several years ago. Des Plaines city leaders decided late last year not to allocate any funds for fireworks in the 2011 budget. In previous years, the $16,000 cost was paid for through proceeds from the Taste.

The Fourth parade — estimated to cost between $10,000 and $15,000 — will continue. It will be partially funded through roughly $7,000 left over in an escrow special events fund. The rest will be covered through sponsorships, a $25 per float entry fee and fundraising. “If it was that big an expense with staff time, they should have given us a bill for it,” Christiansen said.

City officials say they have billed the Special Events Commission the past two years — $24,000 in 2010 and $21,000 in 2009 — mostly for overtime costs incurred by public works and public safety employees working the festival.

“Before that, the city never required them to reimburse so everything was done on the city's dime,” Acting City Manager Jason Slowinski said. And even the last two years, Slowinski said, the city never billed for time spent by city staff reviewing legal contracts, processing invoices and vendor payments, and producing marketing materials.

“When it's under the auspices of the SEC, the city has to do all of that legwork in the background,” Slowinski said. “When you have your staff tied up doing stuff like that, you are not delivering services to residents and that's what we're here for.” By contrast, city officials say the Summer Fling won't cost the city anything. The event organizer will be hiring private workers to provide security and for festival set up and clean up. The city won't have to review any contracts or vendors, Slowinski said.

“It's not going to require the investment and the expenditures we've had in the past,” Slowinski said. “They also take the risk, if it doesn't go well. If it's not well attended or there's a complete washout due to the weather, that's all on them. It's a zero-sum game for us, other than the fact that Des Plaines gets a great festival and the taxpayers don't have to pay for it.”

City leaders say Des Plaines, like many suburban towns facing declining tax revenues, had to make tough choices and cut back on the frills to face the current economic reality.

“We have people losing their homes, their jobs,” Moylan said. “Our staff has been decimated by layoffs. Our job is to keep our tax rates low and not to be having fireworks when people are losing their homes.” Special Events Management will take all the profits from the Des Plaines Summer Fling, which could be up to $10,000 in its first year after paying for advertising, entertainment, equipment, garbage containers, liquor license fees, security, insurance and other costs, Zemola said.

“Our typical events bring us about $20,000 to $25,000,” Zemola said, pointing to first-year expenses that would hold profit below that. “A midlevel event, and that's what we consider Des Plaines, is about a $150,000 to $170,000 undertaking … We're going to be very fortunate if we can make money.”

Zemola expects the event could generate up to $40,000 in beer sales. Attendees will be encouraged to make a voluntary $3 donation, but the primary moneymaker is corporate sponsorships, Zemola said. While Summer Fling won't serve as a fundraiser for Des Plaines, it will support nonprofits Chicago Canine Rescue and the Illinois Cycling Association. And it will carry on some of the Taste's traditions, such as the Des Plaines Park District's 5K race/fundraiser and the Des Plaines Chamber of Commerce and Industry expo.

“Any community that we go into we try to take the components that were important or good for the community and try to maintain them,” Zemola said. “When we're done with Des Plaines, we're going to have a real value … it's really going to raise a high level of awareness of Des Plaines for the local businesses. It brings a lot of people that really don't know the area to the community.”