WeHo Taking More Than 8 Months to Prep Event Financial Transparency Rules

City Hall expects to present to the WeHo City Council in April a recommendation to address the issue of event producers’ reluctance to provide budgets or other financial information to the city that was raised by Mayor Lauren Meister in July 2016.

That recommendation would come only weeks before the June L.A. Pride parade and festival, which sparked controversy over the non-profit parent’s lack of transparency that prompted Meister in July of last year to ask city staffers to develop policies and procedures for special events. Those policies and procedures were supposed to include requirements for agreements or contracts, financial disclosure and collection of data to evaluate the events.

rules, regulations
The words Compliance, Rules, Regulations and Guidelines on colorful arrow road signs directing you to comply wih important laws or standards

Given the late preparation and presentation of the policies and procedures it is not clear that the financial disclosure requirement and any changes to them proposed by the City Council could be applied to this year’s Pride events.

The L.A. Pride events generate an estimated $5 million in spending in West Hollywood, according to a consultant’s report. The city has no actual control over the Pride events. But it subsidizes them with nearly $600,000 in cash, services and free use of city space.

While Pride generates money for city businesses, last year’s event generated controversy and a huge loss for Christopher Street West (CSW), the events’ non-profit parent. The controversy came from decisions by CSW’s new board leaders to rebrand the Pride festival as a music festival aimed at millennials.

Documents obtained by WEHOville showed a loss of $395,000, which CSW apparently was able to cover with profits from the previous year’s Pride, when CSW had different management. In an op-ed published on WEHOville, Dan Morin, who recently resigned from the CSW board of directors, said he was told it had only hundreds of dollars in its bank account, was unable to pay its January office rent and was counting on advance payments from event sponsors to pay its bills.

Unlike many other Pride organizations in major cities, CSW has refused to publish its annual tax return on its website or to make public information about its financial situation. Those tax returns are available to the public on request from the Internal Revenue Service and on WEHOville, which has obtained and published CSW’s tax returns for past years. It has, however, shared data on attendance and results of a survey indicating the demographics of attendees.

An item on the City Council’s Tuesday agenda presents “preliminary concepts for the council to consider. They include:

— Streamlining and Elimination of Permits for Small Business Events. “Event vetting and permitting requirements will be scaled to appropriately address the actual impact of an event on the city’s residents and businesses. The process for large impacts will be augmented to include standardized, detailed, compliance requirements while requirements for smaller events will be streamlined or may not require permits at all.”

“Staff will conduct a study of the section of the West Hollywood Municipal Code related to special events (Section 19.54) to evaluate issues such as whether the lowest impact activations that are currently classified as “Special Events” (for example a business’ sidewalk sale) should be removed from such classification, thereby no longer requiring a Special Event Permit.”

— Require Transparent Fiscal Reporting. “Policies and procedures will be introduced to standardize event fiscal reporting that will allow staff to provide comprehensive digestible fiscal information on all events.

“Data to be aggregated will include permit application fees, fee waivers, sponsorship revenue/offsets, public safety costs, staffing costs, event budgets (where applicable) and any other costs to the City or event applicants.”

“Event fiscal impact summaries are currently labor intensive and may not be sustainable for staff because of the wide variety of sources from which the data is produced and must be gathered from. And event producers are often reluctant to supply budgets or other fiscal data. A formal recommendation that addresses this issue will be introduced to Council in April.”

The agenda item also says “staff will work with the city attorney in order to develop a proposal of the specific financial disclosures required based on both the event’s financial relationship designation and event classification.”

— Event Review/Create Comprehensive Review and Data Collection Process “Apart from the formal Special Event Permit application process, there is not a uniform policy or procedure for event vetting, approval, review, and data collection. Special Event Permits are not applicable to dozens of events produced by City divisions, including the Event Services Division itself. This leaves data distributed throughout the organization and difficult to aggregate. To implement all of the polices and data collection goals mentioned above, a uniform Event Review process for all events, produced both internally and externally, will be implemented.”

Tuesday’s City Council meeting will begin at 6:30 p.m. in the City Council Chambers, 625 N. San Vicente Blvd., south of Santa Monica. Parking is free in the five-story parking structure behind the Council Chambers with a ticket validated at the meeting.