Travis County Commissioners Court
May 16, 2006
Item 10
10, which is consider a and take appropriate action on five-year contract with the republic of Texas biker rally.
>> yes, sir. What you have before you is a five-year contract with the republic of Texas biker rally. On an annual basis late in may, early June they have their hog rally, which is probably the second largest in the country. You have thousands of bikers come here. It's been a good event, bringing us revenue in the amount of about 1 128,000, bringing the city literally millions of dollars in revenue. Just by this particular event. The county in this particular contract reserves all concessions and concession rights. The rally at its sole cost and expense is providing liability insurance, security, traffic control, janitorial services, dumpsters, portable toilets, taxes and fees. We have been very careful in the last several years to do everything that we can to protect the neighborhood, not let the bikes go into the neighborhood. Traffic along decker road has been very good. We have hired this year or the rally has hired the sheriff's department to provide the same sort of security.
>> is that basically set in the way it was done last year and ensure that those barricades -- you couldn't enter the streets?
>> you had to say you were going into the neighborhood for a reason, and they're blocked almost like locked off. There's barricades there. And only vehicular traffic can go into the neighborhood, and it's blocked off from the bikers.
>> okay. It was really a big concern. I was just wanting to make sure those things were in place because it seemed pretty adequate last year, but I wanted to make sure it's still followed up so it won't encroach on the neighborhood that's adjacent to that.
>> the base rent for the -- the license fees for the days of use is about -- it's 28,725. And we expect if we do what we did last year to bring in 100,000 dollars' worth of revenue from concessions and hopefully more. We're working on one other event I don't want to discuss today. I値l discuss it with you individually and something that might make us a little bit more money. But this particular license is a five-year contract, goes to 2010. That doesn't mean that you'll use the same fee for 2010. That portion of the contract is negotiated on an annual basis and is based on the rate schedule that you adapt for the expo center. I covered insurance, license, permits, concessions, security. They are in charge of cleanup after the event also. They're in charge with paying for that. Payment of any damages and all insurances are covered.
>> alicia, can you walk through -- because you had a couple of astericks and double astericks and I guess I値l say it's the double asterick to make sure that's understood under section 5. It's not marked on my page as to what it is, but it's the page right after table one. It has the appearance that the price is not going up or it's not a prenegotiated how much it goes up year after year after year, and I知 just making sure that everybody understands subject to negotiation, what if people can't get to a good place? Because I don't want there to be any misunderstanding.
>> it's based on the rate schedule.
>> the double asterick notation to the table is that the Commissioners court of course always has the rate rite to approve a different rate schedule and at that time the parties will renegotiate the basic fee. In addition, just a caveat to what alicia had said before about the five-year term, the county does retain the unlateral and superior right to terminate the contract in any given year prior to that year's event so that in the event, as you suggested, that the parties were unable to negotiate successfully on a new rate schedule or fee schedule, then the county could terminate the contract.
>> I guess where I知 going on this is there doesn't seem to be any kind of trigger date, it's just a statement saying that we reserve the right to -- we would have the right to renegotiate. I知 trying to make it so that -- so those things get to a conclusion at a certain time and all parties are happy and they have the right to get to a good place because we've had that issue in the past where they just kind of made assumptions and they started sending stuff out and no one felt really good about the situation on both sides. They felt like they were being messed with and we felt we were being messed with. We all got over it. So I知 just wondering at which time --
>> if you look at number 5 and the top, go through 5 and the next page it has either the licensee or the licenser, and Commissioner daiftion, I think you were -- Commissioner Davis, I think you were concerned about that. We or the rot rally have the right to make the decision no a later than January 31st of the same calendar year for which the event of that calendar year is to taib place so. By January 31st of the year that the rally takes place, usually starting on may the 31st, the first week of June, we need to let them know we're not going to renew the contract and they have to let us know, yes, we are going to renew the contract. And with this we would really like to start negotiation as in September have something, you know, settled by the time January 31st comes around.
>> I guess where I知 trying to go on this is that seems like a logical way to say it, why are we not trying to attach that explanation to the double asterick, basically saying at which point the parties will renegotiate the basic fees for that optional renewal year and conclude no later than the 31st in accordance with any options to renew or not renew? I知 just trying to tie it back to it's just much more clear that you don't have to go back three pages.
>> we talked about the dates and the times and the options that alicia was just discussing and we tie that obligation of the licensee to notify us no later than January 31st if he is in fact going to renew, and because the county may be in a position where it would have to forebear scheduling another event, we have included in that provision that the licensee would be liable to pay the basic fee for fo that renewal option year even if the event doesn't take place. With respect to the replacement of the explanation of what basic fee would apply, the reason for the asterick is if you look at the table it basically refers back to the basic fee which for this year is $28,725. And so this is sort of an explanation that the county wants to reserve or does reserve the right to impose a different fee in subsequent renewal option years. So that's why the double asterick is really a clarification of the table and the fees set forth in the table.
>> and I知 still at the place of saying it doesn't really have putting in there a real specific -- I知 trying to make this so it's really clear to everybody that y'all need to get whatever -- if you're going to get into a renegotiation, that renegotiation needs to come to some kind of conclusion in accordance with the January 31 that's part of something from the book. If anybody wants to renegotiate the contract because of the price going up, you need to conclude your renegotiations by the 31st in accordance with the trigger points with regard to cancelling or renewing or not renewing. That's my point.
>> [one moment, please, for change in captioners]
>> it doesn't really block in when that renegotiation on the fee needs to get locked down so that it is in accordance with other parts of this contract which are very specific about people saying I知 in, I知 not in. By January 31st, I知 just saying that needs to be, I think, locked up that any renegotiations about the fees in later years need to be wrapped up by January 31st. That's all that I知 trying to say.
>> that works for us, because that makes it --
>> if it drags on then you have points that are not good for either side. That's all -- the point that I知 trying to make.
>> they make a lot of arrangements --
>> you have to get the renewal done.
>> we don't think it will be a big deal for the licensing?
>> I think -- I think we would welcome it really.
>> judge?
>> yes, sir.
>> well, I mean I知 -- I certainly agree with the number of things that -- that Karen just said.
>> well, thank you.
>> what you really -- what --
>> you're welcome.
>> what you really have to look at here -- first of all, here we are doing this thing again this year at this period where it's sort of a -- sort of a -- the same place that we always are. The middle of may, there's really no turn back for anybody. I mean, jerry can't go somewhere else, but there are -- there are a number of things here that's just -- just not right. I mean, $28,000 for us, even if we hit the $100,000 of concessions, that is, you know, kind of a role of the dice as to whether you hit those things are not because, you know, you don't know what -- what could happen with weather, I mean, those are the kind of things that make your concessions go away. Now the fact that you probably can get enough folks in the gate to pay your costs, I mean,, you know, especially when you have something as small as 287250, but the real difference that you have got to look at here is this is a 10-day event. This takes the expo center out of operations for 10 days. They have the week to set up, then they have -- then they have their deal. Even if you hit the 100 grand, you really need to divide your 128725 by 10. Now, you know, in comparison to what we do, I don't know how that would stack up. But you really do need to look at this thing to make sure that this is a 10-day event. We take the expo center out of the mix for those 10 days. For us not have a some sort of a ratchet into 78225 that's not a definitive is not being good business people on our side and especially given that we do know that we continue to fund expo center out of the general fund every year. You know are we've -- we've really got to sit down with a vendor like this, it not like we want to run them out because they are, you know, they are at a great time of the year, rain is not as likely,, you know, at that time. So, you know, we stand to make some pretty good money out of concessions. But -- and I know that it's hard to ask a -- an applicant show us what you do on thing. It bothers me that somebody takes maybe 200, $250,000 in a wheel borrow out of -- wheel barrow out of here. Maybe that's not the case. Maybe somebody would want to sit down way before now and say here's what we do, we have a very unique venue. I don't even think that the city has a place where you can do the kind of things that they need facility-wise here. I mean granted the expo center is not something that fits for everybody. But it is a home for special kinds of things. Again we are going to look down the barrel of not making the numbers work again for the expo center. We are not going to get there. We are going to -- we are going to have to fund it, you know, out of the general fund to make ends meet, unless there's something that I don't know that's come about. You know since it's may 16th or whatever, we teed to be working on thing as soon as something is over within the first 60 days, we need -- we need -- a real opportunity to understand that if we want to sit down with one of these vendor, that potentially has -- that very -- can be advantageous to us, we need to put in all of the things that we really have to put forth to have this project. If this deal were not a deal where it takes 10 days out of our cycle, then I would be a whole lot more comfortable with this deal. But you start taking 10 days, where you have got somebody out there that can sell -- these are 10 days that you probably can sell events, then -- then I think that we do need to -- to tell jerry that -- that after this first year, yeah, you are right, we are going to want to sit down and renegotiate 28725. We have got to do that y'all, I mean, if we don't, I mean, because we found out, you know, we get into that deal because, you know, can you get into a buck a car, can you do all of this? This contract really doesn't say anything, doesn't prohibit them from doing anything off grounds, which is one little move that I think was pulled last year, we thought we had something buttoned up. Only to find out afterwards -- I think they did get over there find out it didn't work very well for them. It was one of those things obviously we need to have a better relationship -- I like jerry, I mean, he's a likeable guy enough to sit down with, discuss this thing. But, hey, I would be pretty likeable, too, if I were getting this kind of facility for 37
>> [indiscernible] going to stick a quarter of a million dollars in my pocket. I知 all for him telling me hey Gerald you're all wrong I知 not putting that kind of dough in my pocket. Not to say to prevent an -- that an event organizer doesn't take, doesn't have some liability. I understand that. But I do think we need to sit down with them, say we are happy to have you here and it's also one of these things where I think it's really time for us to sit down with the city and say -- because there are -- I mean that week there's so many motorcycles on the street and they're not -- in their pup -- they are not in their pup tents, they are in the hotels spending big time bucks and now that I知 on this new sports foundation board, maybe I need to sit down and talk with them about how we get the city to help participate in -- you know, in something here because I think we could, you know, with an event like this, the city understands how big it is. We all want to go to san antonio, san antonio is always the first thing that gets thrown at us. Well, we'll go to san antonio. I don't care. We don't want that. I think there are -- good business for people sitting down with the county, the city being another. We need to sit down with jerry right of this thing, saying we really want to keep you here, but we need a better deal for us. So.
>> I知 where you are, fine in terms of the one-year contract. I have the same kinds of concerns in terms that you will be giving away -- not giving away, contracting away the ability to get any kind of a cut related to parking like we had with the ice bats. We got a percentage of anybody that wanted to park there. We are we had the right to sell, offer, camping opportunities on that site. They have ways to take the base thing and make lots of money on it. We are not getting a cut on any of it, other than the concessions which I do not diminish. I acknowledge that's a big deal. But I think there's too much of a public facility being give very much away for somebody to make a whole lot of money. You know what it's a good events, it kind of breaks even, I don't think that's the case. The chamber makes a big deal about saying that this thing is something that brings in millions of dollars. I believe that. But it's sure not coming to Travis County. We are not getting any kind of hotel motel on this, we get no sales tax, but it does have the appearance that this facility is being low balled for a whole lot of folks, not us, putting money back into what is a public facility. And I -- I知 fine with the one year. But I知 not there on a five year.
>> I知 certainly willing to sit down right after the event, work with the acbv, work with the city itself and to say we all need to keep the biker rally here. We are very supportive of doing that. But let's, I mean, let's all get an even or at least get a more equitable share of what the deal is.
>>
>> [indiscernible]
>> the same concerns that Commissioner Daugherty is bringing up, Commissioner Sonleitner is bringing up, some of the same similar concerns that you and I discussed in my office when we were going through this contract. And of course I asked at that time how much money was generated last year, city of Austin, for the -- looking at the revenue that's generated from the hotel motel bed tax. The restaurants. Spending -- sales tax. All of those things. Because I wanted to look at it to see what's actually being generated on the other side of the ledger and then looking at what Travis County is getting in this particular situation, which in my opinion -- in my opinion is peanuts. But again I don't have that information today and I know I requested it, I know we don't have it as far as backup. But I think it will be good for us to know exactly where we are, maybe we can look at some ways to -- to get additional revenue for these kind of visits that bring millions and millions and millions of dollars to other governmental entities. It's really not coming to Travis County. So those concerns that they are expressing now, those are the same ones that we discussed in the office the other day. I知 still concerned for -- I still have a legitimate concern and hopefully can get some answers to the approach. But I do know that I wanted to make sure that whatever we came up, wasn't tied into a future-year deal. That's why we are making sure that we looked that the year by year basis and see that, you know, if we don't like what they are doing, they don't like what we are doing, they are out. It's very important to get that instituted into what we're doing here based on looking for those kind of answers, looking for the answers to those kind of questions and seeing how we can generate more revenue. It's still a lot of things out there that I think that we can do. We have tried to do some things before that -- that may not be out of the context of what we were talking about here. But even the hotel motel bed tax sharing as far as looking at revenue that's can be generated from that. Of course that's legislative things. It's just a lot of other instruments I think that's available to us to generate more revenue for Travis County. I still would like those things explored. I hear my colleagues saying the same thing.
>> you are absolutely correct. This is one of the biggest draws for the city of Austin. I think the last time I saw it it was about 15 to $20 million that they estimated that comes in during that --
>> a lot of money.
>> -- particular week.
>> let me give a suggestion. I have in recent weeks been renewing all of my things that I have subscriptions to, Austin symphony, Austin city limits music festival over at zilker and as somebody who is purchasing a subscription, I have here's what it's going to cost and there are add-ones on that particular item. I have to pay to the performing arts center a facility's fee related to my Austin symphony seat. To go into pebbles' fund to shut down the pac and do all sorts of improvements to the thing. I know that the facility is getting a certain piece, symphony is getting a piece. Tell me what it is, it doesn't bother me. It's a standard kind of thing. At acl I guarantee it's like 8 bucks, because I have the three day city going to the city of Austin for that event back to the parks and recreation department separate and apart from what the festival is going to get. It's okay. Just tell me what my add on tab is and we will pay it. I think there's a lost opportunity. Jerry doesn't have to be out any money, it's added on, there's a cut that comes to Travis County, there's a cut that goes to him to cover his event, the bikers just pay the bottom line. I don't think we have been aggressive enough to have a pass-through here to the actual consumer to say hi there's a facilities fee associated. Parking fee, whatever you want to call it. It can be passed on, these folks would not hesitate to pay it because they are already paying a huge --
>> the way this contract is structured now, if we -- if we -- after this -- after this year's alley, if we -- rally, if we decide we want to negotiate different terms, are we able to do that.
>> yes, we would simply have to terminate by the January 1st deadline.
>> this seems to be worded in just a way that we are charging whatever our schedule says we will.
>> [indiscernible]
>> the way it's written now, gives us the right to terminate really for any reason, not only for failure of the parties to renegotiate a fee. I can again has that some clarification for any reason. But that right to terminate is not linked specifically to -- to the parties' agreement. Yes, the master schedule that the court approves every few years would not have ting no revised.
>> okay.
>> move that we approve this contract with the understanding that we will revisit this issue after this year's rally.
>> second.
>> and if the members of the court will be thinking about it, any
>> [indiscernible] to serve as a negotiating team is fine with me, excluding yours truly.
>> [laughter] and discussion of the motion? Seconded by Commissioner Davis. Right?
>> yes.
>> okay. All in favor? That passes by unanimous vote.
>> thank you.
>> thank you all.
>> thank you.
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Last Modified:
Wednesday, May 17, 2006 10:30 AM