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Parade loop(hole) 

A look at the for-profit St. Patrick's Day event shows how easy it is to get city money

Before each St. Patrick's Day parade, John O'Donnell also puts on a 5K race. - JON KELLEY
  • Jon Kelley
  • Before each St. Patrick's Day parade, John O'Donnell also puts on a 5K race.
Click here for city special event statistics

Look among the "sacred cows" laid to rest in the city's last round of budget cuts, and you'll find one missing: subsidies for special events.

The city usually spends about $155,000 a year to help pay for services it provides to events that are either put on by nonprofits, or whose organizers are able to prove they financially benefit the city (mostly through sales-tax revenue they generate).

But an examination of just one event, the upcoming St. Patrick's Day Parade, found that the city is giving away thousands to an event that doesn't meet its own criteria.

Now consider that there were 90 events in 2008. And that only one paid the city full price for its services.

What are the rules again?

John O'Donnell, the man behind the St. Patrick's Day parade and other events in Colorado Springs, Denver and Boulder, is up front about his motivations.

"The St. Patrick's Day parade is not nonprofit," he says. "It never has been."

There's no telling how much O'Donnell makes off the parade. But back in 2004, when the city hired O'Donnell to organize the Welcome Home Parade for returning Army troops, his agency received $25,000, and O'Donnell also billed the city an extra $10,000 for over-budget expenses.

So how does he qualify for a nonprofit discount? O'Donnell says it's simple: He gets the nonprofit Rocky Mountain Sertoma club to pay for his police services. He freely says he's done similar things to get discounts on other events; it just makes sound business sense, in his view.

As for Sertoma, representative Jim Steward says simply, "We were approached by John to help him with the parade, and pay the fees, and we did."

But O'Donnell's arrangement isn't kosher as far as the city's concerned. When the situation was brought to the attention of assistant city manager Mike Anderson, he said it does not conform with the spirit or the letter of city regulations. In fact, Anderson said, special events applications were changed just last year to close loopholes that might lead to, say, a for-profit event getting a nonprofit discount.

"The code changes that were adopted by City Council are very, very specific," Anderson said.

City Councilor Jerry Heimlicher was also perturbed to hear about the situation in regard to the parade.

"We need to do something," he said. "That's revenue down the drain."

It's worth noting that no one on city staff noticed the discrepancy. O'Donnell's special events application includes a signed document saying that Sertoma is working with him. But his liability insurance only covers his for-profit company, O'Donnell and O'Donnell LLP, and the St. Patrick's Day Parade. No Sertoma.

When asked, city employees in charge of special events gave out inaccurate information about the application. Police Lt. Vince Niski, who helps oversee special events, said he thought St. Patrick's Day was gifted nonprofit status through the Road Runners Club of America. Actually, Road Runners covers another of O'Donnell's events, the Grand Prix of Running.

Given all the confusion, you wonder: What other events is the city subsidizing in spite of itself?

Why save this?

It may strike you as outrageous that the Springs is outlaying money more than $320,000 in 2008, thanks to a one-time-only $150,000 gift to the U.S. Senior Open golf tournament for parades and street celebrations at the same time it's cutting funding for buses that serve the poor and disabled, for vacant police and fire positions, and for parks programs and maintenance. The latest round of budget cuts shaved $16.8 million.

Originally, the city was planning to cut subsidies to special events. In the end, Council decided to save them.

"It came down to economics," Heimlicher says.

The city feels it earns money on most big events, even if it throws in a few thousand bucks for police services or barricades. In 2008, it agreed to pay the full price for 13 "city-sponsored" events, including biggies like the Senior Open, the Fourth of July celebration in Memorial Park ($39,524) and the Festival of Lights ($11,254).

Not all the events were nonprofit. What they had in common was a perceived cultural benefit to the city, and, apparently, the promise of increased sales-tax collections during the event and a positive overall economic impact.

Another 76 events in 2008 qualified as "nonprofit," halving the cost of their police service. That includes the St. Patrick's Day Parade ($5,500 discount), Territory Days ($14,077) and Bike Fest ($5,238).

Heimlicher says most of those events have a positive economic impact: "When you draw a crowd anywhere, you're going to have some [extra] spending."

But the city doesn't make nonprofits prove it to get a discount.

By the way, the only 2008 event that paid full price for city services was the Sinister Car Show, whose organizers paid the city $1,328.

stanley@csindy.com

click here for City Money Statistics

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