TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Mark Leyman, Parks and Recreation Director
Linda Robb, Senior Management Analyst
SUBJECT:Title
Consideration of: a) a Standardized Process for Evaluating and Administering Legacy Special Event Subsidies (No Budget Impact); b) Street Closure for the North Manhattan Beach Business Improvement District (NMBBID) Holiday Stroll and Event Subsidy (Partially Budgeted); and c) Holiday Fireworks Event Subsidy (Partially Budgeted) (Parks and Recreation Director Leyman) (Estimated Time: 1 Hour)
A) APPROVE
B) DISCUSS AND PROVIDE DIRECTION
C) APPROPRIATE
Body
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RECOMMENDATION:
Staff recommends that the City Council:
1. Approve the standardized process for evaluating and administering Legacy special event subsidies.
2. Provide direction on the closure of Highland Avenue for the NMBBID Holiday Stroll and subsidy; if approved, appropriate $9,000 from the General Fund for third-party costs.
3. Provide direction on the additional subsidy for third-party costs for the Holiday Fireworks event.
FISCAL IMPLICATIONS:
There is no immediate fiscal impact associated with the adoption of the City Event Subsidy Process. Moving forward, special event costs will be reviewed annually by the City Council as part of the budget process.
Approval of the road closure for the NMBBID Holiday Stroll 2026 event will require an additional appropriation of $9,000 from the General Fund. With the road closure uncertain at the time the budget was developed, the FY 2026-2027 Adopted Budget included funds for the event only in its original scope.
The Holiday Fireworks currently have a $10,000 cap on public safety third-party costs for the organizer. If the Chamber of Commerce’s request to waive all third-party costs is approved, then the City would not receive reimbursement for these costs.
BACKGROUND:
At the March 4, 2025, meeting, City Council approved fee waivers for fiscal years 2026 and 2027, and directed staff to return with criteria used by other cities to review fee waivers, along with an updated method of reviewing City fee waivers in order to provide an equitable review of existing events and those that may be seeking subsidies in the future.
Prior to 2003, the City Council elected to exempt three events from paying the City special-event fees. The Holiday Fireworks Festival, Manhattan Beach 10K Run, and the Little League Parade were considered special events of communitywide interest, too valuable to lose and dependent on a level of community support, volunteer involvement, and organizational effort that would be challenging for the City to provide on its own.
In 2009, the City Council approved 75% fee waivers for all legacy events (except the Holiday Fireworks Festival, Manhattan Beach 10K Run, and Little League Opening Day Parade, which retained 100% waivers), and approved waiving all fees for legacy special events associated with the Manhattan Beach Unified School District, including the Manhattan Beach Education Foundation (MBEF) Wine Auction.
Legacy events were initially established in 1989 with the creation of the Special Events Policy. Events that had been occurring annually before FY1988 were given legacy status. In 2018, the Special Events Policy was updated to allow organizations to apply for legacy status after 10 years of successful event execution. There are currently 12 events that have legacy status: American Martyrs 5K, Little League Opening Parade, Grand View Gator Run, Tour de Pier, MBEF Wine Auction, Manhattan Beach Grand Prix, Catalina Classic (banner), Hometown Fair, MB10K, American Martyrs Parish Fair, NMBBID Holiday Stroll, and the Holiday Fireworks.
After six years of annually revisiting special event fee waivers for legacy events, the City Council concluded that the fee waiver process was an effective way to acknowledge legacy organizations and their positive and beneficial impact on the community and its residents. In 2015, the City Council approved five-year fee waivers for legacy special events to be in effect for fiscal years 2016-2020.
In 2017, the City Council increased the Hometown Fair fee waiver from 75% to 100%.
In 2018, the City Council revised the Special Events Policy, establishing a tiered approval process and clarifying that the fee waiver covers only City services and fees, making all third-party costs the responsibility of the event organizers.
In 2020, the City Council approved fee waivers for fiscal years 2021-2025, granted the North Manhattan Beach Holiday Stroll legacy status with a 100% fee waiver for City services, and approved a $10,000 cap on third-party costs related to public safety for the Holiday Fireworks.
In 2023, the City Council approved legacy status for the Catalina Classic and the Tour de Pier, establishing a 100% fee waiver for City services for the Tour de Pier, and waiving banner application fees for the Catalina Classic.
Also in 2023, a ten-year agreement for the Hometown Fair was approved, which established a $10,000 cap on third-party public safety expenses with a built-in annual 3% CPI increase. The cap for FY2027 is $10,927.
In 2024, the City Council approved a waiver of third-party safety costs for the Manhattan Beach 10K. Security costs for the 2025 event totaled $9,083.
In 2025, the City Council approved the closure of Highland Avenue as a pilot for the North Manhattan Beach Business Improvement District (NMBBID) Holiday Stroll with a 100% fee waiver for City services.
Current Practice
The City supports numerous community events through subsidized provision of City services. The subsidies have evolved over time and are based on historical practices. Existing approval amounts vary by event. Approved waivers are based on estimates provided by each department and can vary from the final reported costs, depending on the services provided. Subsidies apply only to City services. Third-party costs are the responsibility of the event organizer unless otherwise approved by the City Council.
Event Subsidies
American Martyrs 5K 75%
American Martyrs Parish Fair 75%
Grand View Gator 5K 100%
Holiday Fireworks 100% ($10,000 limit on 3rd party public safety expenses)
Hometown Fair 100% ($10,927 limit on 3rd party public safety expenses)
Little League Parade 100%
Manhattan Beach 10K 100% (+ waiver on 3rd party public safety expenses)
Manhattan Beach Grand Prix 75%
MBEF Wine Auction 100%
North MB Holiday Stroll 100%
Tour de Pier 100%
Each event is discussed annually by the Special Events committee, composed of representatives from each department, before and after the event. The committee reviews operational details, safety, road closures, staffing, neighborhood impacts, signage, marketing, past concerns, and future recommendations. Event representatives are present at the meeting prior to the event.
DISCUSSION:
The proposed process is intended to create a fair and consistent evaluation framework, ensure subsidies align with community priorities, preserve support for valued community events, and establish clear limits and expectations regarding City-funded services.
Proposed Process
All organizations requesting subsidies will submit an annual subsidy application (attached) in September. This application will identify the requested City services, provide organizational and event information, and outline the community benefit. Prior year actual costs will be used as the starting point for each department’s review and edits. Applications will be reviewed and scored by the Special Events Committee, and estimates will be provided to the organizers in October for review. Subsidy applications will be presented to the Parks and Recreation Commission in November. Recommendations will then come to the City Council for review and approval in December, allowing for any subsidies to be included in departmental budgets during the annual budget process.
In estimating costs, staff would use fully burdened rates from the Citywide User Fee Schedule, calculate the value of requested services, identify the total City subsidy associated with each event, and present subsidy values as part of the approval process.
Costs may include, but are not limited to, facility rental fees, staffing, City equipment use, traffic control resources, and parking meter fees.
Agreement with Legacy events
Agreements will be executed with each subsidized event. The agreement will include approved services and a total not-to-exceed amount. Any services requested from the organizer beyond those listed will be billed at standard rates. Third-party costs are the responsibility of the organizer unless otherwise noted in the agreement.
Tracking and Accountability
Following approval, staff will monitor the actual services provided, bill for additional city services if resulting from an organizer request or change to the event, and bill for third-party expenses.
Annual reporting will summarize the number of events receiving subsidies, the total value of City support, and the distribution of subsidies among events.
Proposed Evaluation Criteria
Subsidy requests would be evaluated based on factors such as:
• Community benefit - evaluates the extent to which the event enhances quality of life, fosters community connections, or provides a meaningful public benefit to the Manhattan Beach community.
• Public accessibility - Prioritizes events that primarily benefit Manhattan Beach residents and provide accessible opportunities for local participation.
• Organizational Eligibility - evaluates the sponsoring organization’s non-profit status and connection to the Manhattan Beach community.
• Target Audience - identifies the extent to which the event serves Manhattan Beach residents
• City resource requirements - evaluates the level of City staffing, public safety, traffic control, equipment, and facility resources required to support the event
Event applications will be scored using a scoring matrix (attached). Staff is proposing to establish maximum eligible subsidies based on the resulting score.
Score Maximum City Subsidy
85-100 Up to 100%
70-84 Up to 75%
55-69 Up to 50%
Below 55 Up to 25% or no subsidy
The City of Hermosa Beach has two types of fee waiver opportunities. Any event may apply for a Fee Waiver Grant for up to $2,500 per event, or 50% of indirect costs, whichever is less. These grants are drawn from an annual allocation from the City Council.
Organizations that have held events for three consecutive years are eligible to apply for a long-term agreement. These long-term agreements have a maximum term of three years, provide increased fee waivers, and are negotiated by the Parks and Recreation Commission with final approval by the City Council.
Criteria and considerations for fee waivers include:
• Nonprofit status
• Size and duration of event
• % of resident participation
• Unmet community need
• Similarity to other events
• Organization collaborations
• Economic benefits to the city
The City of Redondo Beach supports eight Signature Events designated by the Mayor and City Council. These events receive funding and/or staff support and may also receive waivers of rental, permit, and parking fees. These event costs are reviewed annually by the City Council as part of the budget process. In FY 2025-26, a total of $45,000 was allocated to support all the Signature Events.
The City of El Segundo established a new fee-waiver process in 2023, very similar to the one being proposed tonight. Fees were waived at 100% for six events, and 75% for four events, for a total of approximately $100,000 in waived fees for city services, across all events.
Criteria and considerations for fee waivers include:
• Type of organization
• Event type (non-fundraising vs. fundraising)
• Target audience
• Cost to participate
• Perceived community benefit
• Impact
Additional Event Approval and Appropriation Request
The City is appreciative of the Manhattan Beach Chamber of Commerce for assuming responsibility for organizing the NMBBID Holiday Stroll and the Holiday Fireworks. Their partnership helps ensure the continuation of valued community traditions while leveraging the Chamber's experience in event production and community engagement.
As these events transition to Chamber management, additional appropriations are needed for Fiscal Year 2027 to cover event-related services.
NMBBID Holiday Stroll
City Council approved an additional fee waiver and appropriation of $29,946 for FY 2026 to support the closure of Highland Avenue as part of a pilot program. This event was successful, and the North Manhattan Beach business community and Chamber are requesting that the Sunday closure be permitted for the annual event going forward. Because the event was introduced as a pilot, the additional expenses related to the closure were not included in the FY2027 adopted budget. In addition, actual City costs exceeded the preliminary estimate used during the pilot approval process.
The closure resulted in a safer environment for attendees while also allowing more room for increased attendance. The Chamber reports via Placer.ai that there were approximately 3,500 attendees at the 2025 event, who stayed for an average of 122 minutes, compared to the 2024 event, which drew approximately 2,200 visitors for an average of 111 minutes. Business sales were higher than ever at participating businesses, and neighbors mostly walked to the event. Additionally, the opening of the Highrose El Porto multi-family project is likely to increase attendance this year.
The Chamber stated that it will pay $10,215 for the 2025 event, as that was its understanding of the payment obligation. The difference between the estimate and the actual costs, $2,031 for third-party costs and $14,757 for City services, was absorbed by available funds in the FY 2026 budget; however, an appropriation will be necessary for the FY 2027 budget.
2025 NMBBID Holiday Stroll (FY 2026)
Costs Estimated Actual Difference
Staff/City services $29,946 $44,703 $14,757
Third-party public safety $10,215 $12,246 $2,031
Total $40,161 $56,949 $16,788
The Estimated and Actual costs for City services are based on fully-burdened hourly rates, which also include overhead and indirect costs. Based on last year’s actuals and current fully-burdened rates, if the City were to bill the event organizer for the full impact of the 2026 event, estimated City services and third-party costs would total $72,189.
2026 Event Costs Estimated Budgeted Appropriation
Staff/City services $59,689 $28,305 $-
Third-party Public Safety $12,500 $3,500 $9,000
Total $72,189 $31,805 $9,000
Existing personnel budgets are expected to absorb staffing costs for the event; accordingly, no additional appropriation is needed for staff time. However, an appropriation of $9,000 is required from the General Fund for the third-party public safety costs if the road closure is approved. Staff is seeking City Council direction on whether to absorb the cost or invoice the event organizer:
ALTERNATIVES
1. Approve the road closure with all City services and third-party costs paid by the City.
2. Approve the road closure and subsidize City services only. Third-party costs up to $12,500 will be invoiced to the NMBBID.
3. Approve the road closure with no subsidy. All costs for City services and third-party expenses will be invoiced to the NMBBID, which would require further approval at a BID Special Meeting.
4. Do not approve the road closure.
The City and the Chamber of Commerce will enter into a subsidy agreement that reflects City Council direction for the 2026 NMBBID Holiday Stroll event.
HOLIDAY FIREWORKS
The Chamber of Commerce has assumed responsibility for organizing and producing the Community Holiday Fireworks event. Under the current arrangement, the City subsidizes all City-provided services associated with the event, while the Chamber is responsible for $10,000 toward third-party public safety expenses.
During the transition of the event to Chamber management, questions have arisen regarding responsibility for third-party costs incurred in support of the event. The Chamber has expressed concern that the event operates on a narrow financial margin and that responsibility for City-related or third-party service costs would reduce the financial viability of assuming responsibility for its production.
The Chamber has therefore requested that the City fully subsidize all City-provided services and third-party expenses associated with the event, including the $10,000 in third-party public safety expenses currently assigned to the Chamber. The Chamber has indicated that, given the financial and administrative responsibilities associated with producing the event, continued management may not be feasible if it is required to absorb these costs.
For the 2025 event (FY 2026), the Chamber stated that, because there was no formal agreement, it was unclear whether they were obligated to pay any third-party costs, and they are requesting that the current outstanding invoice for $18,164.35, which includes $10,000 for public safety costs and $8,164.35 for porta-potties and fencing, be voided.
2025 Holiday Fireworks (FY 2026)
Costs Estimated Actual Difference Invoiced
Staff/City services $136,420 $177,901 $41,481 $0
Third-party public safety $55,635 $73,042 $17,407 $10,000
Other $9,994 $8,164 -$1,830 $8,164
Total $202,049 $259,107 $57,058 $18,164
The excess amount of $15,577 for third-party costs and $41,481 in City services was absorbed by available funds in the FY2026 budget.
The cost of City services for the 2026 Fireworks event is anticipated to increase compared to the prior year, primarily due to updated fully-burdened hourly rates that reflect existing labor agreements. The level and scope of City and third-party services provided in support of the event are not expected to materially change.
2026 Estimated Costs (FY 2027)
Staff/City services $197,437
Third-party public safety $75,000
Third-party other $8,500
Total $280,937
ALTERNATIVES
1. Approve the subsidy for all City services and third-party costs.
2. Approve the subsidy for all City services and continue with the preapproved $10,000 cap on third-party public safety costs to be paid by the Chamber of Commerce. Any other third-party costs would be billed to the Chamber.
4. Approve a $10,000 cap on all third-party costs.
The City and the Chamber of Commerce will enter into a subsidy agreement that reflects City Council direction for the 2026 Holiday Fireworks event.
Beginning with the FY 2027-2028 budget cycle, both events will be evaluated through the City's standard fee waiver process, allowing any approved City subsidies to be incorporated into the annual budget through the normal budget development process.
Transition to Annual Event Subsidy Process
Beginning with the FY 2027-2028 fee waiver process, staff will include the Holiday Open House and Skechers Friendship Walk, which have historically been managed as City-sponsored events, in the annual fee waiver review. Separating these events from the City's operating budget will provide greater transparency by allowing their costs and any requested City subsidy to be tracked independently. Staff will recommend that these events be designated as Legacy Events and that any proposed subsidies be considered alongside the City's other Legacy Event subsidy requests during the annual review presented to City Council in December.
PUBLIC OUTREACH:
Event organizers were informed of the City's desire to improve consistency and transparency.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378(b)(5) of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. PowerPoint Presentation
2. Community Event Subsidy Request Form
3. Community Event Subsidy Evaluation
4. Community Event Subsidy Agreement
5. City and Organizer Contribution Summary