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City of Palo Alto
City Manager's Report
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: CITY MANAGER
September 7. 1m CMR:405:95
1994 WORLD CUP SOCCER: SUMMARY OF THE FINANCIAL
IMPLICATIONS FOR THE CITY OF PAW ALTO
Stanford Staarum ... as one of the nine U.S. venue locations a! ... hieh the 1994 World Cup
soccer games were played. The City bore primary responsibility for traffic management
an:! publlc safety. Enensive long-range planning an:! coordination were essential in order
kl assure ~ of the crowds associated ... ith LI}e games. The City accepIed this
rommi!menl with the UlIderslanding that reimbursemenr would be 800ght for the
extraordinaly expcnseo !he City would incur. The purpose of this repnrl is 10 sum up the
costs in..--urred by the City and the reveDUes whicb can be annbu!ed 10 the presern of
Wocld Cup games at Stanfoo:I. Preparation of this report bad 10 await the availability of
stale sales tax data. Although it is impossible 10 precisely calculalo the tax revenues
directly attributable 10 World Cup. it does appear that the City', non-reimbursed costs
exceeded revenues by nea;ly $400,000.
RECOMMENDATIONS
This is an infonna6onal repo<1 and DO Council action is requested.
POUCV IMPI.lCATTONS
The Council, in 1991, endorsed the San Francisco Bay Area Host Committee bid for
Stanford Stadium 10 be selected as a venue silo for the World Cup games with the
lIlIIlerstaOOmg that the City would oegOCiaIe an agreemenl with the host committee for
reimbursement of the actual costs of providing police and fire!paramedic services. The
presence of the games at Stanford obligated the City 10 asrure the heaJ1h and safety of
visiton 10 Palo Alto, 10 provide efflCient traffic management and crowd control in
ronoection with the games. and 10 mjnjmiz. the adverse impacts on Palo Alto residents.
It was known that the City would incur costs IlOl included in the reimbnrsable category;
therefore. the City Sought 10 contain costs by encouraging partnerships with other
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organizalioos and agencies. The City also sough! 10 reduce the "red tape" associated with
the prese= 0( the games. Temporary regulations were adopted regarding pennittlng and
licensing 0( vendot's; this lessened the de!IlllIlds on staff time for processing pennits, made
field enforcement easier and increased good will with vendors, visitocs, and the World Cup
<><gonization.
EXWJ'ID'E SUMMAlU:
Six World Cup games .. 'ere P' ... yed al!be Slanford Stadium in 1994: four first-round gaines
in 1une, fOllowed by an elimination match VIl luly 4 and a qllJl!Ierfinal on July !O. The
My" game, which pitied the fJ<Sl-round winner, Brazil, against the United States, the
third-place winner from anotber venue, was among the highlights 0( the month's World
Cup events ""tionw;".'e. Attendance .ot the six galDes IO!alle<l .5 million.
The involvemeDl 0( the City extended far beyoclthe period 0( the games. Significant staff
.hours were devoted 10 World CUp planning for well over a year in advance. The
agroemem which was negotiated between the City and the San Francisco Bay Area World
CUp host coounittee provided only for reimbursemeD! 0( the estimated oveniml! costs
which the City would incur in the provision 0( police. fire and paramedic services on the
six game days. In addition 10 the staff costs associ.ated willi Iong·range planning, the
support functions provided by the Public Works and Utilities departments were not
reimbursed. oor was the cost 0( supplies. materlals and equipment incidental 10 the
provision 0( police, fire and paramedic services. The philosophy 0( the host coounittee
and the World CUp organization was that the revenue from the IOUrism associated with the
presence 0( the games would compensate for the expenses incurred by the City. The
following infonnatioo indicates that this old not occur.
E!;pendiDlres
City staff time an:! expenditures associated ... ith World CUp were closely tracked. Time
devoted 10 Wodd Cop was coded on timecards from the point in 1993 when planning
began until the completion of the games in July 199<;. The Police DeparImeIlI assumed the
greatest workload, IO!alling over n,s 7Q person boors_ Figure I on the following page
shows staff costs by Cily department as well as the non·salary expenses whicb were
essentiaJ in ooIer 10 assure a safe, efficieDl and festive community for World Cup visitors.
The Cily provided seed money 10 the JocaI coounittee spea!beaded by the OJamber 0(
Commerce which pubUcized Palo Alto's lmsinesses and facilities; the Cily paid for the
design and printing 0( • promotional fOlder which the ChaJDbe, distributed widely 10 the
uavel indilstry and other> seeking information about Palo Alto and Stanford; the CiIy
provided in-kind semes 10 the host committee's Soccer Center on EI Camino Real an:!
fast-tracked !he permit for iliat facility; field reoovation at Greer Pork was expedited in
ooIer III accommodate the Legacy Tour event which the World CUp organization held !here
In advance 0( the World CUp games.
CMR;40So'lS Page20fl
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,
-~~$l1IfItI
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0Y..:im0_
~Non-~~
T"""
$378.4<8
fl,484
116,362
15,874
zu:;Q
• '.281 un
$1.452
u:;g
$545.71&
---.
fIIIIIlIII
$taft' .,... i1YoJ"o'fIId tong-range pi,JnrUng; tratfie pl4llning,
Inaulg.maul and etf'olcemctlit; QQWCf CO(I'I1oI; pubr~ __ : __ """~JOnO.
Non-...,. c:csb irIdtJded equipment. LUlif'orms, affice
~ pVt5~, ~ aofrwart>. ~ me811 and
~ouppIioo.
~ irlb'!t'. 9" pi;n'li1g an<! ~ m~
Coo ~ plan; ~ 01 ""9'00 _"1 ."d
patW1'1eI<k urG b • nini'Tun of tvee 'hoI.n before .. ..:I aAer
S25.32il ..... game.
Staft' time .~ participation b Iong-ranQe pCanning;
fabriraticn. ilstaIatioo.-..:I ~ of XlO algns to assl:st
wfth Ir8ftIe 07Ib'0f en cq streefa lind Stanford catnpUI;;
pn:w~n allr'&tric c:onird crews b ead't game day; street
sweepirog and itt$'" control. No:i-salal)I QOSts were tramc
$"9.'21 contro1"bfT'G and rnatenal. blign ~
Ttaik S9'a sta1f Wit$ ~ at ~ ~ I\e
major liatfic FOUfes tv'ou;houI f'Ie Cit] on ;ilrnr day&. and
~ _ ... roc on<!'" Wi!)' CooInII Center.
m,as.c StIlI alsO ~ WI FIstaIing cameras used lID moriIor n1'Iic
OlDniIac.rnnoRnJ
~ for i"rIen:Iep til ii5< • c:cordination. neQ06ation wit.
WO!Id Cujo oIfidaTo ond ..,., comniIIee. _'" .....,.,
... "","" lIfo_ ~ ..... ....-.-
$22,913 money far PalO AIIo-StanfotU World Cup ConmiftH; deSign .,., .,mting 01 PalO .... __ • __
clipping aennc. ~ na50rlaI 'NMd ~ ilD.il&6c:Ho,; Wof1d' Coo_ bCltyWlofmga ..... _ ........
FeaTrtation dWOttd Cop special events.pfannlOQ. Centrad
blondv.ape beoutifi<a5on .... <1 Clty .-.. _
RaM. d ~ wi'lh z~ rag\l~ COOe
elfLMte', .. It relatecf10 Socoer Center bulcirIG ~ and' $3.... '""""""'" Iii .... r ___ pIonning.
ArntIndIT'Ntri of PAMC for ~ regulafiOn d World Cup
'So',~ vendors; dratI: I'IIirrburMmenI ~ -'ttl hostcommiUee.
AtJminiWative teNkit& rNfed ID time1<.eeping.and budget.
$219
$7112,932
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Partnerships
To control costs SIld 10 increase res<>qrces, the City asked for the cooperation and
assistmce 0{ oIher agencies and organizations. At the suggestion 0( tl,. City, !he Palo Ar.o
Chamber 0{ C'OOIIlleTCC lOOt !he lead in organizing the Palo AIto-Stanford World Cup
Soccer Committee (a collaborative effort among Chamber representatives, merchants,
hoteliers and restaUTll1lleUI>, City staff. the media and St:onford officials) which did
extensive promotion. outreach and even! planning to draw attention 10 Palo Alto. The City
and the Chamber 0( Commerce work": cooperatively with Dlgi'.aI Equipment Corporation
10 make Palo Alto information available worldwide on the w_ternel The Police
Department, in carrying out its re';l)()!lsibility for transportation planning and traffIC
management, coordinated the invOI'vement 0{ over 30 transportation providers and law
enforcement agencies. The participation by CalTrain was particularly valuable 10 the
suocess 0{ the IranSport3tion plan. (The Police DepartmeII was subsequently awarded the
San Mateo County Transit Transportation Award for Excellence in the planning and
implementation 0{ the World Cup traffJC plan.) The adjacent cities of Los Altos and
Mountain View provided police officers 10 supplement Pa].) Alto offJCers on game days.
The World Cup USA venue committee paid for the publication o{. transportation guide
and the street signs directing gamegoers 10 the stadium and parking. The U.S. Department
0{ Defe,... paid for the insWlatioo 0(. fence which they mandated for crowd managemen!
aloog Embarcadero Road. The World Cup national sponsors bore the expense of the
banners which decorated the business district streets during the perlod o{the games.
ReyemlM
Beimbursemen! The agreement which was negotiated between the City and the San
Francil.» Bay Area World Cup best committee provided for. paymen! of $110,198 10
cover the estimat<d Police and Fire department overtime costs 10 provide police, ft..., and
paramedic services on the six game days, includ"mg the additional law enfoo:emen!
assistance from the cities of Los Altos and Moontlin YleW, and the specific police training
for soccer crowd control and related incidents. The best committee preferred 10 make the
payment upon signing the agreement; a post-games reconciliation based upon a detailed
accounting 0{ the aclUal service costs documented that the City's reimbursable expenses
were aclUally $186,887, $16,689 in excess of the payment received from the host
committee. For their assistance, the City conveyed $1C),47Q and $7,84.5 0{ the
reimbursement payment 10 Mountain YleW and Los Altos, respectively_
The City wu also reimbursed for work done and materials produ<:ed by the Public Works
Operations division. The sign shop fabricated traffIC control signs for Stanford ($1,163)
and World Cup USA ($II,061). PaloAho High School shared in the cost 0( I temporary
driveway which enabled the student body 10 operate I parking Io! for World Cup ($1,043)_
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Ranner sales Several bundred offICial World CI.'l' banners were installed, with City
approval. on major Palo Alto thoroughfares and business districts for the month's duration
0(1be games. The costs of !be bannen and instaIl.tion were borne by World Cnp naOOnal
spooson. who retained pos5eS,ion of them after the games. The City was suc<:essful in
persuading two 0( the sponsors 10 donate • limited quantily of banners 10 !be City for sale
10 community members as souvenirs. The proceeds of the sale netted the City
approJdmale.'y $6,900. which bas been earmarked 10 purchase new permanent soccer goals
alld nets for Greer Park and perform rel.ted soccer field improvements. Gre« Park is
heavily used by rommunity soe<:er groups.
Iransjen! /b:1I)lHDQ' Tax There are approximately I ,800 hotel and motel rooms in Palo
Alto, over one baIf 0( .... hich are in blr hotels. The City's transie!!! OCCllpancy lax (fOT)
is ten percenl of the room rentll charge. Figure n sbows the IllOOIhIy rransienl occupancy
lax revenue received by the City for the calendar years 1993 and 1994, with the months
in which the World Cnp games occurred highlighted. A review of the supporting TOT
data indkates that 12 0( the 21 reporting botelslmotels had signifx:antJy higher oc<:upancy
rates during the World Cnp period but, ovaart, there was no llOIable increase in occupancy
during the months of June and July 1994. There was no appare!ll pattern among those that
had higher oceupancies in terms 0( size, price or location. A significant jump in TOT
revenue OC<:1Jrred during the period, bowever. The increase in TOT revenue over the
previous year continued in the months following World Cnp and actually reflects an
indostry·wi<!e upward ratead'jUStlnellt among IIlAjor borels. In .bsolU'.e dollars, it cooId
CMR:40S:9S
FIGURE_
Tr.anslent Or;CUpillnq Tax. Rfl."ue
.city or PaTo AJla
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be said lhat TOT revenues increased by $114,729durlng June and July of 1994. Talc:ing
into accounlthe increased revenue trend !bat is app;:renl in the mooll>.s following World
CuI', it might be more accurate 10 estimate !bat World Cup was responsible for about
$75,000 increased TOT revenue.
Sales Tn The City receives <>De percent of the sales tax imposed on local retail sales.
The largest erooomic category for Palo Alto's sales tax revenue is oosiness·lO-business
sa1es and this was no( lilrely 10 be affected by World Cup visitors. Figure ill compares the
sales tax revenue received in calendar years 1993 and 1994 for the economic segments
which were.pI 10 be sensitive teo World Cup. Sales tax revenue is reported 00 a quarterly
rather than a moothl:y basis, and Figure IV presents comparable economic segment data
for the quarters in which the World DJjI games were p!.ayed. Although it is 00( possible
10 isotate the speoomg during the moctbs of June and 1uIy, • comparison of Figure; ill and
IV ~ suggest whether the variance IlIat occurred during the second and LlUrd quarters was
typical of the overall year or mal bave been due 10 World Cup. For example, liquor store
srues were substantially higher in both quarters and restaurant, drug store, service stations
and misceUaneous retail sales were much higher in one quarter. Department stores, on
the other hand, which lypicalJy bave their greatest sales during the fourth quarter, did ll()(
appear 10 be skewed by World Cup.
Eoo.nomic Segmllin1
Departrne .. SIcfe. _Store.
Drug Stores
"-osceIaneous Re!aiI -~uQ' Stores
FoocJ Msut:ets
Service Stalioos
AGUREIll
SaTes Tax Revenue by Se~t8-d Business Classfficatioos
Cily of Palo Alto
Variance
Year Enlflng Year Ending $ Ck,ange
1~W3 121311'4
$2,001,973 $2,071,539 $ 69,665
905,~25 t,tl1t,510 106,D65
1(;(,005 t 13.752 6.747
I.V35.900 1,088,416 52,516
1,430,110 1,C96,392 66,262
34.196 M.n. 526
.. 29.3,093 285,363 -7,730 -
2132,501 2Bl,230 -1.277
..
P.rcentage
35 --
11.1
63
51
4.6
15
-2.6
·.5
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FlGU!If IV
hI" Tax Revenue by $elttCted Bualne .. CtHsifj~ti"ans d'unn9 rlSCal Quarr.rw: In '&IbJch 'florid Cup Oc:c:urred'
Y.rlI~ V.riance ......,..-2ndQlr.1993 2nd 0., 1194 1 CMng. " 3t1l Qtr. '993 3td Q!:r. ,"' $ Chang,
(.I'tI93 • tiIlOIt3 ......... ~ vtnI3· 113Q193 71/94 • I/3GI'U --$489,929 $o4 .... B20 , '.091; 1.7 $46E,171 $481,035 $1.4,864 ---225-,165-234~" 9,130 ... 2i2,072 224,S4Ei 12,674
"'"'01-21,376 29,00; 1.630 " 25.73Ei 2!l.S05 2,76!l ---239,7oe 269,342 29,0>< 124 24fi,361 248,252 1,691 . ........,.. ~.275 391,345 -10,070 11,2 358,17" 363,"53 5,279
"""" ... 1.<53 1,159 70S .. 1,&43 8,3-19 536 ---n,128 72,182 ~3,94S ~5,2 70,046 SS,1sa -<IS.! --14,960 60,905 -4,991 ".7 64,949 1-4,380 1,-431
Tot.IiI YMr..fl>Y-~ $&'J,3.31 $46,75G
Ouorlooty VoIiInoo
~ ~ ~ Cor:subntI, Sales Tn ~.-.:i R4v1ir.g SeMoe
Certain areas, due 10 their proximity 10 t!:: Stanford Stadium or their preponderance
0( businesses attractive to World Cup v1sitors, oould be expected 10 experience
increased sales during the period of the games. Figure V soows the increased sales
tax revenue for those selected geographic areas. The column on the right indicates
the revenue which could be assumed 10 be potentially attr,butable 10 World Cup.
This figure. approximately $97.0c0, is a more realistic estimate than the citywide
sales ta.'( revenue variance shown in Figure IV. Even !his figure, oowever, ignores
any other ecooomic faclorS presenl during the six morubs (Apn1-September) period
0( 1994 which could bave affected retail sales.
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"
15
" .1.2
~4,~
2n1f av.
G~
,_ (0.1
An. 4I1It3 • 1/JQ/93
UniverSity $<127,156
~ 200,307 henue~I
TOW!) & 43.~7
Coonfry
SI10pping
C<on!!!<
Stonftlnf 928,156
Shopping
CenIer
E1CM*'<> 213.497
Real oouII1 01
Page Mil ..
fMIro!es-
FIGURE V
Sa].,. Tax R."enue by 581,",l1l<I ~~ Area" during
Fiscal Quarlera In which Wofid Cup OccUlT&d
Varilnc~
200 ::r: 3nlav. 3nI av. ,_ o.j 1993 (.~ 1_(0.1
0I/1IS4 • I/JQ/94 • Chango % 711193· !II3ON3 7I1IS4 • Il3Ol94 SChange %
$444.612 $17.456 .1 $<129. ~OI Wi9,52O $40.419 ;.4
202._ 2.683 13 199.405 19e.s06 -lI99 ~.5
50,&42 7.375 17 44,517 47.563 3.1~ 7.1
855,353 27,197 3.3 BOO.075 822,908 22.831 2;
232.863 19.366 9.1 210.167 219.066 8,879 4.2
la) _""!ax revenue !rom ilLb<JoIness cf •• silicslioos, noI 01 ofwllich ""'"' Wond ClJp-sensltive.
% of_tax ,. ...... 2nd oncI Snf
WO<lclC~
MnaJUvw .)
Q1ra.l*
47% 27,201
52% 921
94% 9.~90
95% 47,527
43% 12.145
$97.691
lb.) These pereenIs rejnOOnI h , ........... t'om \he economic segmenls.,..,.." i'\ ''!lures II and rJ, Some geographic areao i'\ pro.ocirniIj> Ie Wond Cup ...."._
HIes!8X.prt><!udng _ not seo&itive b WOOd Cup, •. g , oI!ice eq,*""", an<! b<J....,.,. serVices accoonllcr 29lIo of_tax revenue i'\ C8IiI'omia_
d'1Slric1, and 36% 01_ !ax revenue on soolherfy B camino Real comes !rom auto saTes
(c.) InciJd6S lIIf)0C8rt B Camino Real nor1h a! Page t.(1L
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flSCAL lMl'ACT
An ecooomic impact analysis was prepared by a consultant '" the World Cup USA
organization prior '" the games. wlth projected revelllJeS IOc each 0( the nine venues~ That
document bad Iiltle relevance for Palo At<o. The &In Francisco Bay Area venue was not
limited '" Palo AIro. World Cup t.eams and visitors stayed Ihroogbout the Bay Area and
World Cup-related activities were held in numerous locations. Sales lax and TOT
revenues would go 10 1hooe COOlIIlunities, as wen as '" Palo AM. Those gamegoers who
were from the imme<fUlte area tended 10 spcnd their money wilhin the Stanford Stadium
area for food and souvenirs, thus not creating sales lax revenne for Palo AM.
Summing up the C~ 0( Palo Abo's expenditures and dedu<:ting the esemated revenues
received from host committee and oIher reimbursement. banner sales, TOT and sales tax
revenue. iI appears that the out-<>f-pocl<et cost 10 the Cily for the World Cup experience
was nearly $400.000. Much 0( this expense represenls the substantiallllllOUDl 0( staff time
whicll was devoted 10 advance planning I:> assure that an aspects 0( !he World Cup
presence in Palo Alto would he handled suc=sfuUy. This also took staff away from oIher
oormaI responsibiL~.
E>penditun:s
Revenues,
Host <:.ommiUee reimbw1.cmeDl
Misc:. reimbursements
Banner saJeo
Tnnsim occupan<y'" ( .... )
Sol ..... ( ... .)
$11(),198
13,267
6,IlOO
7S,OOO
iZ.62.I.
S762,932
5399,876
k should be noted that certain benefits ald accrue 10 Palo Alto as a result 0( World Cup.
The worldwide coverage gave Palo Alto increased visibility and is apt 10 gener.te future
business and tourism. The~ity's presence on the Internet was given a strong boost by the
internatiooaI interest generated by World Cup. Local businesses, particularly bolels and
shopping district representatives, established new ways 0( Wo<l<ing COOjleratively which
may be 0( long-term value 10 the communiI)'.
Ona broader scale. accorQrng to the Vtce Presidento(the San Francisco Bay Mea bost
COIDIIrlttee, awroximately $500,000 was raised through World Cup to be used as I legacy
for yOUlh soccer in the Bay Area. A oon-profil organization has been formed w1Uch is in
the process 0( developing guidelines, criteria and public inf<lml.arion regarding the use 0(
the legacy fund.
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El!t"YIBONMENl'AI. ASSESSMENT
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PREPARED RY: V'lCCi Room. Assistant 10 the City Man.aget
em MANAGERAPPROYAL, ~~
C' _ er
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