Planned Special Events: 

Cost Management and Cost Recovery 

Primer

May 2009 
2 

Page Intentionally Left Blank 
3 
4 

NOTICE 

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information to serve Government, industry, and the public in a 

manner that promotes public understanding. Standards and policies 

are used to ensure and maximize the quality, objectivity, utility, and 

integrity of its information. FHWA periodically reviews quality 

issues and adjusts its programs and processes to ensure continuous 

quality improvement.

DISCLAIMER 

The United States Government does not endorse products or 

manufacturers. Trademarks or manufacturers' names appear in this 

report only because they are considered essential to the objective of 

the document.
5 

Technical Report Documentation Page 

1. Report No. 

FHWA-HOP-09-028 

2. Government Accession No. 3. Recipient’s Catalog No. 

4. Title and Subtitle 5. Report Date

May 2009 

Planned Special Events: Cost Management and Cost Recovery Primer 6. Performing Organization Code 

7. Authors

Jonathan Skolnik (JFA), Diana Stern (JFA), Rami Chami (JFA), Alexander Lane 

(JFA), C.S. “Bud” Kulesza, and Matthew Walker (DEA) 

8. Performing Organization 

Report No. 

 

9. Performing Organization Name and Address

Jack Faucett and Associates 

4550 Montgomery Avenue, Suite 300N, Bethesda, Maryland 20814 

C.S. Bud Kulesza, CMA, CFM 

11613 Hollister Dr. 

Austin, Texas 78739 

Dunn Engineering Associates 

66 Main St., Westhampton Beach, New York 11978 

10. Work Unit No. (TRAIS) 

 

11. Contract or Grant No.

DTFH61-06-D-00005, T-08-005 

12. Sponsoring Agency Name and Address

U.S. Department of Transportation 

Federal Highway Administration 

Office of Operations 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

13. Type of Report and Period 

Covered

14. Sponsoring Agency Code

HOTO, HOP, US DOT 

15. Supplementary Notes

Ms. Laurel Radow, COTM 

16. Abstract 

This purpose of this primer is to aid jurisdictions and agencies, especially Departments of Transportation, with 

identifying and managing the costs of planned special events (PSEs) and forming policy for cost recovery. Cost 

management— the effective, overarching control of an organization’s finances— is a part of general 

management and creates accountability and transparency within the budget. Currently, in most cities the 

management of planned special events is fragmented across multiple agencies, and the costs and benefits of 

such events are not usually quantified or reported in any manner. The strategies and examples provided herein 

are meant to inform the reader on the basics of cost management and cost recovery, thereby facilitating more 

knowledgeable decision-making and encouraging further discussion among jurisdictions, agencies, and 

departments. 

17. Key Words

Planned special events, PSE, Cost Management, Cost 

Recovery 

18. Distribution Statement 

No restrictions. 

19. Security Classif. (of this report) 

Unclassified 

20. Security Classif. (of this page) 

Unclassified 

21. No. of Pages

75 

22. Price 

N/A 
6 

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized. 
7 

Table of Contents 

Introduction ..................................................................................................................................... 9 

Chapter 1: The Current State of the Practice ................................................................................ 12 

Case Studies ........................................................................................................................... 15 

Washington, D.C. ................................................................................................................... 16 

Phoenix, AZ ............................................................................................................................ 19 

Los Angeles, CA ...................................................................................................................... 20 

Ithaca, NY ............................................................................................................................... 23 

Chapter 2: Basic Principles of Cost Management and Recovery ................................................... 25 

Cost Management ................................................................................................................. 25 

Cost Recovery ........................................................................................................................ 30 

Chapter 3: Tracking Planned Special Event Costs .......................................................................... 34 

Chapter 4: Strategies for Cost Minimization and Cost Recovery .................................................. 51 

Data Collection ...................................................................................................................... 53 

Resource Utilization .............................................................................................................. 56 

Direct Cost Recovery ............................................................................................................. 58 

Indirect Cost Recovery ........................................................................................................... 63 

Chapter 5: Developing a Planned Special Events Line Item .......................................................... 65 

Chapter 6: Federal Funding for Planned Special Events ................................................................ 70 

Glossary ......................................................................................................................................... 76 
8 

Page Intentionally Left Blank 
9 

Introduction 

This purpose of this primer is to aid jurisdictions and agencies, especially Departments of 

Transportation, with identifying and managing the costs of planned special events (PSEs) and 

forming policy for cost recovery. Cost management— the effective, overarching control of an 

organization’s finances— is a part of general management and creates accountability and 

transparency within the budget. Currently, in most cities the management of planned special 

events is fragmented across multiple agencies, and the costs and benefits of such events are not 

usually quantified or reported in any manner. The strategies and examples provided herein are 

meant to inform the reader on the basics of cost management and cost recovery, thereby 

facilitating more knowledgeable decision-making and encouraging further discussion among 

jurisdictions, agencies, and departments. 

Organization 

Chapter one discusses the current state of the practice of PSE management and profiles case 

studies from selected cities. Chapter two defines cost management and cost recovery. This 

chapter provides both an introduction to the basics of proper cost management and a 

discussion to aid jurisdictions in determining when cost recovery is appropriate. Chapter two 

also presents best practices in cost management and cost recovery. Chapter three contains 

information about tracking costs that is designed to aid departments in their implementation of 

the basic practices discussed in chapter two. Chapter four presents specific strategies that 

jurisdictions can employ to implement cost management and cost recovery. Chapter five 

provides an example to show jurisdictions and departments how to create a PSE line item in 

their budget. Chapter six discusses available sources of federal funding. 

Fiscal impact of Planned Special Events 

PSEs include sporting events, concerts, festivals, and conventions at permanent multi-use 

venues (e.g., arenas, stadiums, racetracks, fairgrounds, amphitheaters, and convention centers). 

They also include public events at temporary venues such as parades, fireworks displays, bicycle 

races, sporting games, motorcycle rallies, seasonal festivals, and milestone celebrations.1

 PSEs 

involve substantial costs and generate substantial revenues to private industry and 

governmental entities. A recent FHWA study conducted by Jack Faucett Associates estimated 

there are 24,000 large-attendance events in the U.S. annually.2

 The report defined PSEs as 

events with more than 10,000 attendees. The study also found that direct in-event revenues are 

about $40 billion annually in the U.S., but direct outside-of-event spending and secondary 

economic effects raise the total economic effect of large PSEs to $164 billion dollars. 

Government revenue from these events is estimated to be approximately $4 billion. The largest 

event category in terms of economic effect is professional team sports, at about $60 billion. 

 

1

 Managing Travel for Planned Special Events Handbook. FHWA, U.S. Department of Transportation, 2003. 

2

 Skolnik, J., Chami, R., & Walker, M. (2008). Planned Special Events- Economic Role and Congestion Effects. Washington DC: U.S.

Department of Transportation, FHWA. 
10 

The number of planned special events held annually around the nation is growing and this 

growth increases the strain on the budgets of many cities. Around the U.S., cities and towns are 

attempting to limit the effect of special events on public finances. The Portland Tribune recently 

published an article noting that in 2006, the traffic division of the Portland Police Department 

spent $363,000 in overtime expenses alone for special events, out of which the department 

recovered only $48,000. Recovering only a small percentage of expenses is a common 

occurrence, as special events are often held on evenings and weekends and personnel are 

frequently paid overtime. Many events, such as concerts and professional team sports, can be 

held only on evenings and weekends. Government agencies involved in planning and operations 

for planned special events frequently lack sufficient budgets to accommodate such large 

overtime expenses. However, with planning, normal duty hours can cover many elements of set 

up and day of event activities. 

The effort to reduce public spending on PSEs while retaining their many benefits includes cost 

tracking and improved cost recovery methods, and has garnered public attention and media 

coverage. Some examples of how various jurisdictions have grappled with the problem are 

provided in Exhibit i.

Document Contents 

The information provided in this document is intended to: 

• Provide departments with background information on PSE management in the U.S. and 

highlight additional resources. 

• Help departments take a comprehensive look at their use of resources. 

• Help departments weigh the merits of whether to institute a cost recovery program and 

assess how far its reach should be. 

• Help departments track costs specific to PSEs. 

• Help departments engage in appropriate cost recovery by providing a range of 

possibilities for cost recovery strategies. 

• Initiate discussion among agencies, departments, and planned special event partners 

regarding implementing cost management and determining cost recovery policy. 
11 

Exhibit i: Special Event Cost Recovery in the News 

Naples, FL (Naples News) 

August 12, 2008— The Community Services Advisory Board in Naples voted to increase special event fees and 

reduce assistance to non-profit organizations in order to improve the city’s balance sheet. Following the vote the 

city anticipated increasing application and vendors’ fees at the city’s art fairs, concerts, road races, and parades, 

which would recover an additional $56,000 per year. The board also voted to eliminate funding previously 

extended to non-profit organizations to pay a portion of the organizations' responsibility for police and fire 

services at events. Eliminating that program was estimated to save the city $25,000 each year.1

Solvang, CA (Santa Maria Times) 

July 27, 2008— The Solvang City Council recently considered whether to charge event organizers directly for an 

array of city services provided at special events. These would include sheriff’s services, City staff’s time, and rent 

of traffic control devices. The sheriff’s department already bills the City for additional services at special events, 

and this cost would be passed on to event organizers. Additionally, the City would account for staff time spent 

notifying residents of sidewalk and road closures and bill event organizers accordingly.2

Charlestown, RI (The Providence Journal)

July 2, 2008— City officials in Charlestown considered altering the fee structure for events at one of the city’s 

parks from a flat rate of $2,500 per day to a percentage of the event's gross revenue. The city hoped that the 

proposed fee structure would be more equitable to smaller events and would enable the Parks and Recreation 

Commission to raise more money to pay for improvements to the park. Regular event organizers complained 

that, despite paying roughly $200,000 to the city during the previous decade, they have seen little improvement 

and have funded some improvements themselves. Event organizers were concerned not only about paying more, 

and how the money was spent, but were also wary of the city auditing their accounts for each event. At least two 

of the four major events held at the park each year were seeking a new venue at the time the article was 

published.3

Gettysburg, PA (The Evening Sun)

March 2, 2008— Gettysburg city officials considered pricing plans that would affect both annual and weekly 

events by charging vendors for the space they use. One example was a proposal to raise the rent for a parking 

space at the semi-annual antique show to $1 per hour. The prospect of increased fees caused wine festival and 

antique show organizers, as well as farmers’ market vendors, to threaten to find new venues. A critic of the plan 

noted that special events draw more patrons to the municipal parking garage and argued that policy makers 

should not ignore that effect on the city’s finances.4

 

Tulsa, OK (The Journal Record) 

March 7, 2007— The Tulsa City Council discussed an increase of 38%, from $36 to $50 per hour officer-hour, for 

police services at special events as part of their effort to distribute costs to event organizers. The original cost 

reflected the police department’s calculations of average cost per officer at the overtime rate; a system that had 

been in effect since 1993. The proposed fee was a more comprehensive cost calculation that included the cost of 

fuel for police vehicles used at events. The increased fee drew concern over its potential effect on events 

sponsored by non-profits and charities.5

Sources: 

1

Buzzacco, J. (2008, August 12). Naples may increase revenue by raising fees for special events. Retrieved August 15, 2008, from

naplesnews.com: http://www.naplesnews.com/news/2008/aug/12/naples-city-council-look-revising-special-events 2

Times Staff. (2008, July 27). Solvang may hike fees for special events. Retrieved August 8, 2008, from MSNBC: 

http://www.msnbc.msn.com/id/25881400 

3

Armental, M. (2008, July 2). Ninigret event planners, panel members joust on fee hikes. Retrieved August 15, 2008, from Rhode Island 

News: http://www.projo.com/news/content/SC_CHARLESTON_PARKS_AND_RECREAT_07-02-08_VJA_v53.403ee18.html 4

James, E. (2008, March 2). Event-fee hike could end up costing downtown Gettysburg. Retrieved August 20, 2008, from Evening Sun: 

http://www.eveningsun.com/ci_8425910?source=most_viewed 
12 

Chapter 1: The Current State of the Practice 

Many aspects comprise sound planned special event (PSE) management. These aspects include 

management of direct and indirect costs, 

clarity of permitting process, and 

interagency coordination, as depicted in 

Exhibit 1.1.3

 Because PSE management is 

often highly fragmented, for most 

jurisdictions a high level in one category 

does not correlate with a high level in 

another category. Each aspect is generally 

independent from the others and can be 

thought of as a separate dimension of PSE 

management, as Exhibit 1.1 reflects. Cities 

must consider all of these dimensions in 

evaluating their current PSE management 

plan. 

One of the difficulties with cost management 

and recovery for planned special events is 

that the costs incurred in permitting, 

planning, and operations for each event are 

split among multiple departments and even 

divisions within departments. An example of 

how costs typically may 

be split among 

departments is pictured 

in Exhibit 1.2. Several 

agencies, generally 

including the police, city 

department of 

transportation (DOT), 

and public transit 

authority, are 

responsible for different 

aspects of 

transportation 

management for events. 

Other departments are 

involved in PSE planning 

and operations, such as 

the fire department and 

licensing agency, but 

these are not involved in 

 

3

 Cost recovery as well as direct and indirect costs appear in the glossary at the end of this handbook and are discussed in detail in 

Chapter 2. 

Exhibit 1.1: Dimensions of PSE Management

 

 Exhibit 1.2 Dispersion of PSE Costs 

 
13 

transportation. This disaggregation can make assembling a single cost estimate for PSEs very 

difficult; yet the benefits of PSEs accrue to the city and its population as a whole in the form of 

greater economic activity, city revenue, and increased civic participation in the case of those 

events considered to be first amendment rights. Many cities may find that one department or 

agency is already implementing a comprehensive approach to PSE cost management, but that 

the practice is isolated and knowledge is not transferred among departments. 

Interdepartmental discussion and knowledge transfer, therefore, may be a good place to begin 

implemention of cost management and cost recovery. Looking at the practices of other cities of 

similar size is also beneficial. PSE management is challenging because it is often split across 

multiple departments and PSEs often cross jurisdictional lines. Large planned special events 

cross jurisdictional bounds between state, city, and county and accrue regional, rather than 

jurisdictional, benefits. State authorities may have different incentives than authorities in 

individual cities, which are often willing to absorb 

the costs in exchange for greater name 

recognition and a positive change for city 

residents. 

Cost recovery will be most comprehensive when 

instituted as a collaborative, focused effort among 

relevant departments and jurisdictions. However, 

this holistic approach must conform to practical 

considerations as well. Implementation of sound 

cost recovery practices at the level of large 

departments in a city may be much easier to 

achieve than a city-wide cost recovery effort. 

Different departments – such as the Mayor’s 

Office, the City Council, and the DOT – may all 

have different viewpoints and their own concerns 

to address. Cost recovery for events often is a 

political issue. City council members must address their constituents' concerns about the effect 

of events, and there can be considerable public support for both small events, such as farmer’s 

markets, and large events that help to define the city, such as professional sports teams. Public 

opposition to certain direct charges (for example, ticket fees and taxes) can be strong. Each 

governmental office has its own mission and concerns, so agreeing on a city-wide policy or the 

amount of a line item can be difficult. These may be surmounted through an effort to build 

consensus and focus on the need to work toward a common goal. 

Previous Studies 

A previous research study conducted in 2006 examined the management of costs for planned 

special events.4

 The author conducted a scan of cities that included Baltimore, Boston, Los 

Angeles, New York, Philadelphia, Phoenix and Seattle. The methodology included a review of 

 

4

 Managing Costs for Planned Special Events, Paper for the 2nd National Conference on Managing Travel for Planned Special Events, 

Prepared by David Kuehn, FHWA, Draft revised November 27, 2006. 

The disaggregation of PSE 

management can make 

assembling a single cost 

estimate for PSEs very difficult; 

yet the benefits of PSEs accrue 

to the city and its population 

as a whole in the form of 

greater economic activity and 

city revenue.
14 

public material, policies, fee schedules and conversations with agency personnel. Exhibit I.3 

summarizes the results of the study. 

The study concluded that the Los Angeles Department of Transportation is the “gold standard” 

for cost management. The Department has a Special Traffic Operations Division with nine 

positions dedicated to special events, full authority for the planning and operations of special 

events, routine procedures for different event scenarios, and a well-trained cadre of traffic 

control officers with experience deploying procedures in the field. Los Angeles also has 

considerable experience with “on-the-fly adaptations” to the traffic system to relieve or lessen 

congestion. The Division develops cost estimates for events then reviews and approves actual 

costs after the event. However, the Department recovers very little, less than five percent 

according to the Division Chief, of the costs from event organizers. 

The study reported that Los Angeles appeared to be the only city with a separate budget line 

item for special events. In 2005, the Council approved a $2.7 million budget, which they 

increased to $4.1 million at the mid-year budget review to cover Department costs for special 

events. The author noted, “Providing cost information to the council and mayor, though, does 

lead to a political desire for cost recovery.”5

 The paper asserted that two cities that are most 

aggressive at recovering costs are Phoenix and Seattle. In both cities, this is a relatively recent 

policy and both cities have reviewed past costs to set fee schedules. Still, in both cities, the 

Departments do not recover costs for some types of events including City-sponsored events and 

first amendment demonstrations and marches. The author also discovered information on how 

 

5

 Managing Costs for Planned Special Events, Paper for the 2nd National Conference on Managing Travel for Planned Special Events, 

Prepared by David Kuehn, FHWA, Draft revised November 27, 2006, p. 7. 

Exhibit 1.3: Summary of Peer Cities Cost Management for Special Events 

City Budget 

Line Item 

Cost Estimates Cost Recovery and/or 

Cost Management 

Baltimore No Generally Cost Recovery is case-by-case for personnel & equipment; 

The city makes an effort to minimize overtime 

Boston No Sometimes The city recovers lost parking meter revenue; The city makes 

an effort to minimize overtime 

Los Angeles Yes Yes Cost recovery is estimated at approximately five percent; 

Special Operations Division reviews, approves & monitors 

PSE costs 

New York No No Occasional cost recovery 

Philadelphia No PD lead on costs Occasional cost recovery 

Phoenix No Yes Most costs are recovered 

Seattle No Yes Most costs are recovered 

Adapted from: Managing Costs for Planned Special Events, Paper for the 2nd National Conference on Managing Travel 

for Planned Special Events, Prepared by David Kuehn, FHWA, Draft revised November 27, 2006, p. 7. 
15 

peer cities manage and minimize the costs of supporting special events. New York and 

Philadelphia rely more on the police department to plan for and manage special events. Having 

workers on a shift schedule allows cities to perform more of the duties associated with special 

events while personnel are on their normal tours of duty. A large department staff can also be 

helpful. The author found that Baltimore, which has close to 700 positions in their Maintenance 

Division, provides enough depth to staff larger events without disrupting regularly scheduled 

activities. 

Case Studies 

Study staff contacted a large number of cities and other jurisdictions as part of the development 

of this primer. The purpose of these contacts was to develop information on the current state 

of the practice for cost management and cost recovery for planned special events. 

Exhibit 1.2 summarizes cost management and cost recovery activities for five large cities, all 

with populations greater than 500,000. In general, these cities engage in some cost tracking 

activities, require permits for special events, and require some reimbursement for services. 

There is less similarity across cities in terms of DOT involvement in planning, whether permits 

are issued on a flat or variable rate, the existence of a traffic specific fee and whether traffic 

mitigation plans are developed by government or by event sponsors. 

Exhibit 1.4: Cost Management and Cost Recovery Activities for Selected Large Cities 

City 

Cost 

Tracking 

Methods In 

Use 

DOT 

Involvement

In PSE 

planning 

PSE Permit

Required 

PSE Permit 

Flat Fee or 

Variable Fee 

City Reimbursement for Services 

TrafficSpecific 

Fee 

Traffic 

Mitigation 

Plan Developed

Privately 

Baltimore Yes Yes Yes Variable Yes Yes No 

Los Angeles Yes Yes Yes Variable 

For self 

promotional 

activities 

Reimbursement basis 

Not usually; but 

city contracts 

developed 

individually 

Philadelphia Yes No DOT Yes Flat Yes Yes No

Phoenix Yes No DOT Yes 

None for 

Application, 

variable for city 

parks 

Yes No Yes 

Washington, DC Yes Yes Yes Flat Yes Yes Yes 
16 

The following sections provide case studies for a 

selection of jurisdictions. These case studies 

describe how these jurisdictions manage plan 

special events and their methods of cost 

management and cost recovery. The case 

studies included in this section are: 

• Washington D.C 

• Phoenix, AZ 

• Los Angeles, CA 

• Ithaca, NY 

Washington, D.C. 

The Mayor’s Special Events Task Group (MSETG) 

coordinates the city’s planning efforts for special 

events and is responsible for providing an 

interagency review and assessment of the 

operational, public safety, and logistical 

components of special event proposals. The 

MSETG is composed of membership from District 

of Columbia government agencies, Federal 

government agencies, and private sector 

emergency service organizations. Event 

proposals must be submitted in writing (a 

minimum of 120 days prior to the event) and 

then presented in person (a minimum of 90 days 

prior to the event) to the MSETG. The 

concurrence of the task group is required prior 

to the issuance of permits or licenses by the 

permit-granting agencies. 

The First Amendment to the United States 

Constitution protects activities such as 

assemblies organized for public address, protest, 

and the exercise of worship or religion. These 

activities do not require the approval of the 

MSETG. The Special Operations Division of the 

Metropolitan Police Department handles these 

types of events. 

Events such as parades, walks, runs, bike rides, 

require both approval from the MSETG and an 

additional permit from the Special Operations 

Division of the Metropolitan Police Department. 

The requirements of the Metropolitan Police Department for the issuance of parade permits 

include route approval, with a Traffic Control Plan from the District Department of 

Exhibit 1.5: D.C. Mayor’s Special Events Task 

Group Member Agencies 

• Homeland Security and Emergency 

Management Agency 

• Metropolitan Police Department 

• Department of Fire and Emergency 

Medical Services 

• Department of Public Works 

• Department of Transportation 

• Department of Consumer and 

Regulatory Affairs 

• Department of Health 

• Department of Parks and Recreation 

• Department of Human Services 

• Department of Corrections 

• Department of Employment Services 

• Department of Housing and Community 

Development 

• Office of Contracting and Procurement 

• Executive Office of the Mayor 

• Office of the Attorney General 

• Office of Tax and Revenue 

• Commission on the Arts and Humanities 

• Office of Motion Pictures and Television 

• D.C. Sports and Entertainment 

Commission 

• Washington Convention Center 

• Washington Convention and Tourism 

Corporation 

• Washington Metropolitan Area Transit 

Authority 

• Federal City REACT 

• National Park Service 

• U.S. Park Police 

• Federal Protective Service 

• FBI Joint Terrorism Task Force 

• U.S. Supreme Court 

• U.S. Capitol Police 

• National Gallery of the Arts 

• Smithsonian Institute 

• Alcoholic Beverage Regulation 

Administration 

• Serve DC 
17 

Transportation (DDOT). The police department develops the Traffic Control Plan. The police 

department does not charge for such planning (although they do charge for officers during the 

event--see rate in Exhibit 1.6). Costs incurred in developing a Traffic Control Plan include driving 

through the route to ascertain traffic needs. No cost tracking efforts are in effect. 

Where street closures are required, the Metropolitan Police Department requires that all event 

organizers completely barricade roadways with barriers capable of stopping an oncoming 

vehicle (e.g., water-filled barriers). The event organizer is fully responsible for renting, insuring, 

transporting, installing, and removing the barriers.

Organizers of events requiring street closures are also required to submit a traffic control plan to 

the Department of Transportation that conforms to the Manual on Uniform Traffic Control 

Devices (MUTCD). The Department of Transportation will then determine whether the event 

organizer is responsible for the acquisition, installation and maintenance of traffic control 

devices. The event organizer must remove all traffic control devices within two hours following 

completion of the special event. 

Large events involving many buses require active liaison efforts with the police department and 

the Washington Metropolitan Area Transit Authority to ensure that adequate parking areas, bus 

identification, and drop-off/pick-up points are well planned and coordinated. These liaison 

efforts may also involve the need for re-routing of Metro buses or supplementation of Metrorail 

service to facilitate certain events. The newly enacted Federal Charter Service Rule improves 

upon several aspects of the old law. In particular, the new rule includes several exemptions 

under which public transit agencies may provide charter services for special events. When doing 

so, the transit authorities must follow reporting requirements outlined by the rule. For a 

complete list of exemptions and requirements see 

http://www.fta.dot.gov/laws/leg_reg_8391.html. 

Neighborhood block parties require a Neighborhood Block Party Temporary Street Closing 

Permit from the Homeland Security and Emergency Management Agency and are subject to 

different rules and regulations than those listed above. Approval is required from the 

Department of Transportation, Department of Fire and EMS, Metropolitan Police Department, 

and Washington Metropolitan Area Transit Authority. 

All sponsors of special events, regardless of non-profit status, are required to pay District of 

Columbia taxes on items sold. Tax-exempt organizations are not required to pay income taxes, 

but are required to pay all sales taxes. The Office of Tax and Revenue and the Department of 

Consumer and Regulatory Affairs cooperate in providing registration services. 

The City of Washington, D.C. posts rates for most of the services associated with special events 

and clearly states that event organizers are responsible for “the costs of services, as determined 

by the agencies, incurred by the city for administering the special event.” The rates, listed in 

Exhibit 1.6, are to be paid in full by event organizers fifteen business days prior to the event. 

Such transparency leads to greater ease of planning for event organizers and shows that the city 

is attempting cost recovery and maintaining communication with each department. This type of 

information is not readily available in many cities. 
18 

Exhibit 1.6: Reimbursement Rates for Washington, D.C. City Services 

Department of Consumer and Regulatory Affairs 

• A special event conducted for profit on public space is subject to payment of the 

Special Events License, $205 per day. 

• Sanitarians, building inspectors, electrical inspectors, plumbing inspectors, and 

alcoholic beverage control investigators, health food inspectors, and special event 

inspectors are billed at a rate of $43.17 per employee, per hour, for a minimum of 4 

hours. 

Department of Transportation 

• Installation and removal of flags from city street light poles, $32.75 per person, per 

hour. 

• Installing temporary “No Parking” signs, $27.61 per person, per hour. 

Department of Public Works 

• Space cleaning and trash removal, $27 per person, per hour. 

• Transfer station disposal cost (when warranted), $726.00 per event. 

• Disposable trash bags, $0.35 per bag. 

Metropolitan Police Department 

• Police services are billed at a rate of $55.71 per officer, per hour, for a minimum of 

four hours. 

Department of Fire and Emergency Medical Services 

• Over-the-Counter Permit Fee, $100– to cover the review, research and limited on-site 

inspection for an over-the-counter permit. 

• On-Site Permit Fee, $60 per Inspector, per hour – to cover the time required to 

perform an inspection of the site and/or the activities or equipment in use during the 

event that needs to be inspected. 

• On-Site Monitoring Fee, $60 per Inspector, per hour – to monitor the special event to 

ensure the safety of the public. 

• One Advanced Life Support Unit (includes two EMS providers and one supervisor), 

$190 per hour for a minimum of four hours. 

• EMS bicycle teams and EMS ambulance carts (includes two EMS providers, and either 

two bicycles or one cart,) $120 per hour. 

• Use of Fire Truck, four to five firefighters and equipment for parades, festivals, and 

other special events, $400 per hour for a minimum of 4 hours. 

Department Of Health/Emergency Health and Medical Services Administration 

• Advanced Medical Aid Station: total first hour cost $502.00, additional hourly cost 

$102.00. 

• Basic Medical Aid Station: total first hour cost $211.00, additional hourly cost $61.00. 

• If the event requires more than four Medical Aid Stations, for either type of Aid 

Station, a supervisor from the Office of Emergency Health and Medical Services 

(OEHMS) will be required. An EHMSA Supervisor is billed at $38.00 per hour. 

Source: Mayor’s Special Events Task Group, “Your Guide to Planning a Special Event in Washington, D.C.” 

(2007 Revised Edition) 
19 

Conclusions 

The District appears to recover a large majority of their expenses and has made an effort to 

unify the application and planning process. The District has one agency with the authority to 

oversee all aspects of special event planning and provides detailed cost structures for many of 

the direct services associated with special events. 

Although DDOT is a part of the Mayor’s Special Events Task Group, multiple departments and 

offices within DDOT coordinate different efforts and initiatives associated with special events. 

Not all of these departments are in close contact with the MSETG. While the city charges rather 

comprehensively for direct services, such as police traffic control during an event, many costs 

are being quietly absorbed behind those services that are listed. For example, traffic control 

during a parade would be the responsibility of event organizers, but there is no charge for the 

development of a traffic control plan for that same event. However, in some cases the city does 

require event organizers to submit a traffic control plan themselves. 

It is difficult to determine the extent of costs that remain unaccounted as they are spread 

between multiple agencies and among departments within those agencies. While departments 

which have a history of charging for their services are surprised by the notion of not being 

reimbursed, staff in similar roles at other departments view their contributions as part of the 

department’s mission and are surprised at the idea of asking for reimbursement. 

Phoenix, AZ 

The City of Phoenix Parks and Recreation Department handles special event applications, 

regardless of whether the event will be held on park property. However, public assemblies do 

not require applications and are coordinated by the Phoenix Police Community and Patrol 

Services. The City of Phoenix requires the applicant to be responsible for almost all issues 

associated with the event. Applicants must provide, at their own expense, services that include 

the following: 

• Neighborhood notification 

• Additional trash receptacles and clean up following the event. The city will bill event 

organizers for any sanitation services. 

• Appropriate security and medical response, as deemed necessary by the City. 

 Off-duty police officers are available for approximately $50 an hour. 

• A parking/shuttle plan and detailed Traffic Control Plan from a professional barricade 

company for any events involving street closures. This plan must then be approved by 

the Street Transportation Department. 

Phoenix's Steele Indian School Park, a city park, handles many large special events (events 

attracting more than 10,000 people) per year. The City's fees for personnel charged to special 

event organizers have recently risen from about $15/hour to $40/hour for set-up, event, and 

tear-down staff and $51/hr. for maintenance staff. This change was made when the City realized 

that employees were mainly called upon to work during holidays and evenings, when they 
20 

receive overtime pay (time and a half). The prior fees fell extremely short of the true cost to the 

department. 

Steele Indian School Park collects three fees, each calculated separately, from event organizers. 

The park charges a user fee that is dependent upon the section(s) of the park in which the event 

will be held. And whether the sponsoring organization is a commercial enterprise, a private 

entity, or a non-profit organization (the fess schedule is on a sliding scale). There is an additional 

charge per staff hour, with staffing needs being determined by the park. The park also requires a 

security deposit, ranging from $500 for an expected attendance of 300 participants to $2,000 for 

an expected attendance of 5,000 or more. 

Costs incurred in connection with the licensing process for activities such as liquor sales and 

mechanical rides/games are tracked and the associated fees set to achieve full cost recovery. 

The city’s licensing department implements this cost recovery system and has carefully tracked 

staff time, overhead, and all costs associated with regulatory licensing. An application is 

followed through its "lifespan" with attention to who handles the application, the handlers' payscale, how many hours of labor are required, and additional external costs that exist. Costs are 

updated annually. No special software or training is required for this tracking process, which 

would likely require the efforts of one employee for a few weeks each year. 

Conclusions 

Virtually all special events fall under the jurisdiction of the Phoenix Department of Parks and 

Recreation, which does not charge for the permit itself but does charge for almost all direct city 

services associated with the event. Despite the uniformity in creating one governing body for all 

events, event organizers still need additional permits and services for requirements including 

but not limited to emergency medical services, police services, sanitation services, 

food/beverage services, and tent/canopy permits. Each department involved with these 

services sets its own fees, and these fees are not published or made available by the 

Department of Parks and Recreation, which does not act as a coordinating agency. 

The City of Phoenix has set a clear objective of full cost recovery for PSEs. While many 

departments have internalized this advice and charge for the use of all direct services, cost 

tracking efforts are not part of the normal procedure. Several departments are still undercharging or are unaware of the difference between their true costs and the prices they set. 

Most city officials do not seem to know who would be in charge of cost tracking and where such 

efforts do occur, there is no system in place to assure unit costs are regularly updated. In spite 

of these shortcomings, the city’s comprehensive billing system likely results in the recovery of 

the majority of expenses. 

Los Angeles, CA 

Approvals for special events come from different agencies within the city: the Los Angeles 

Department of Building and Safety (LADBS), the Department of Public Works (DPW), and the Los 

Angeles Police Department (LAPD). The appropriate governing body is determined by the type 

of event, as outlined in Exhibit 1.5. 
21 

The Los Angeles Department of Transportation 

(LADOT) receives notifications from the three 

approval bodies and conducts preliminary 

screenings to determine the appropriate level of 

transportation response. LADOT is responsible for 

preparing and implementing special traffic 

management plans to regulate excess traffic and 

mitigate the effect of street closures for special 

events. These activities may include posting 

temporary parking restrictions at the event location 

or preparing a detailed Special Event Traffic 

Management Plan. Notifications of large upcoming 

special events and accompanying street closures are 

posted on the Department of Transportation’s 

Automated Traffic Surveillance and Control website. 

Those events falling under the jurisdiction of LADBS 

are required to be inspected and approved by the 

department prior to holding the event. Applicants 

must file applications and pay fees at least two days 

before the event, and inspections are conducted 

prior to event. The fee is $130 for tents up to 5,000 

square feet, with an additional fee for large tents of 

$130 for each additional 5,000 square feet. An 

additional fee is imposed for off-hour inspections 

made after 3:30 p.m. and before 7:00 a.m., or on 

declared city holidays. There is also systems fee of 6 

percent on all permits. 

Prior to obtaining approval from a LADBS field 

inspector, a safety plan showing the layout of the 

event is required to be approved by the Los Angeles 

Fire Department. The approved safety plan must be 

made available to the Department of Building and 

Safety inspector at the time of the site inspection. 

Events that exceed five days, or do not qualify as 

Temporary Special Events, such as the change of use 

of a building or Christmas tree and pumpkin lot 

sales, require a building permit from LADBS. Dances 

require specialized Dance Permits from the LAPD, 

which are processed by the Office of Finance. 

The LADBS application for a special event permit 

makes little mention of additional required permits 

or fees and contains no information regarding 

responsibility for traffic or parking plans or payment 

for police services. 

Exhibit 1.7: Agency Responsible for Issuance 

of Special Event Permits for the City of Los 

Angeles and Types of 

Events/Activities/Equipment Covered by 

Agency 

Los Angeles Department of Building and Safety 

(LADBS)* 

• Tents or canopies, larger than 450 sq ft 

on residential property or larger than 12 

feet in length or width on a commercial 

property. 

• Stages or platforms more than 30 

inches above grade. 

• Structures higher than 30 inches, 

intended for live loads, require 

engineering approval or an approved 

standard plan on file with LADBS prior 

to inspection. 

• Grandstands or bleachers. 

• Structures higher than 12 feet. 

• Temporary change of use (parking lot 

sales or use of building for special 

purpose). 

• Temporary auto sales require sign off by 

plan check and inspector prior to permit 

issuance. 

• Temporary generators and electrical 

wiring require an electrical permit. 

Bureau of Street Services (DPW) 

• Block parties 

• Celebrations 

• Street fairs 

• Charitable events 

• Ceremonies 

• Closures for political purposes 

• Marathons 

• 5k or 10k runs 

• Walk-a-thons 

• Bike races 

• Community events 

 

Special Events Planning Unit (LAPD) 

• Parades 

• Processions 

• Planned demonstrations or marches 

*Must have maximum duration of 5 Days to 

qualify as Temporary Special Events 
22 

Permits for events involving street closures are issued by either the Department of Public 

Works, Bureau of Street Services, Street Services Investigation and Enforcement Division, Street 

Closure/Special Event Unit or the Los Angeles Police Department, Emergency Operations 

Section, Special Events Planning Unit (SEPU). 

The permit fee for those events falling under the jurisdiction of the Bureau of Street Services 

and requiring street closure is $312. There is no fee if the event occurs on a city sidewalk, 

although a permit is still required. A fee of $216 is charged for events that include temporary 

selling activities. It is possible to both apply for and check the status of an application online. The 

Bureau inspects the area after each event and bills for any required cleaning. In the case of large 

events, a refundable cash deposit may be required to assure proper cleaning after the event. 

The city does charge for police officers to control traffic during the event. Event organizers also 

are required to install and maintain barricades with flashers during the entire period of the 

street closure. These may be rented from the city free of charge. However, the applicant is 

charged for damaged or lost equipment. 

Prior to processing a request for any street closure or event, the Street Services Investigation 

and Enforcement Division notifies a number of agencies of the time, place, location and nature 

of the event. These agencies include, but are not limited to the appropriate Council Office, Los 

Angeles Fire Department, Los Angeles Police Department, Los Angeles Department of 

Transportation and the Metropolitan Transit Authority (MTA). In the event that a protest of the 

closure is received from one or more of these agencies, the request for closure will be scheduled 

for a public hearing before the Board of Public Works. 

For those events requiring a permit from SEPU, a statement from the Los Angeles Department 

of Transportation of the estimated traffic control costs is required. However, this requirement is 

waived for non-commercial events. 

Conclusions 

The City of Los Angeles tracks all costs associated with planned special events, including 

planning and operations costs. A project number is assigned to each event, and staff time 

(including overtime and overhead) as well as equipment costs are tracked. Many large event 

organizers, rather than applying to one of the three agencies involved in planning, address the 

City Council and contract with them directly for event support. The City Council often waives 

reimbursement in these cases. Many permanent venues, such as Dodger Stadium, the Los 

Angeles Coliseum, Staples Center, the Hollywood Bowl, and the Greek Theatre have contracts 

with the city that do not require them to reimburse the city for any traffic management costs. 

The city does require some reimbursement for movie premieres. 

While the DOT has a line item for overtime, which includes emergency response, it does not 

have a line item for planned special events.6

 The cost of planned special events to the city as a 

whole is more than $10 million annually. However, this analysis of fiscal impact does not 

consider the economic and social benefit the city receives from these events. Most 

 

6

 Managing Costs for Planned Special Events, Paper for the 2nd National Conference on Managing Travel for Planned Special Events, 

Prepared by David Kuehn, FHWA, Draft revised November 27, 2006. 
23 

departments simply absorb the costs by leaving vacant positions unfilled and delaying planned 

equipment purchases. The DOT does try to trim costs where possible and engages in resource 

management. Strategies include shortening routes or creating routes that loop and holding 

events on days that do not conflict with other events in the nearby area to lessen congestion 

and expense. 

Sometimes departments conflict in their goals. For example, the DOT focuses on trimming costs, 

while other departments feel that publicity for the city is important. The DOT generally begins 

planning events only after the City Council has waived fees and approved the event's time, date, 

and location, which makes resource management very difficult. Approximately half of PSE 

transportation costs come from permanent venues. 

Cost recovery activities in the City of Los Angeles appear to be minimal. While some flat permit 

fees are relatively high and may cover some of the costs associated with processing the 

application, notification that the applicant is responsible for the reimbursement of city activities 

during PSE facilitation is largely absent from the information provided to event organizers by all 

three departments responsible for permit issuance. 

Ithaca, NY 

Ithaca has a centralized application process for large events. Events requiring three or more 

permits (Noise, Assembly or Parade, Street Closure, Use of a Park or Public Property, Alcohol, or 

Vending) are handled by the City Clerk’s Office and must be received at least one month prior to 

the event. Upon receipt of an application, the city assigns a liaison to be a single point of contact 

and guide applicants through the process. The city forwards copies of the application to all 

involved departments for review and approval. It also informs applicants if any additional 

information, permits, licenses, or certificates are required. The Ithaca Police Department, Fire 

Department, Office of the Mayor, Office of the City Clerk, Department of Parks and Recreation 

and occasionally the Deputy Director of Economic Development all meet for events requiring 

three or more permits. 

The Ithaca Department of Public Works does most of the traffic planning for special events, as 

Ithaca does not have a city DOT. Events necessitating street closures may be required to obtain 

traffic safety equipment, such as barricades, traffic cones, sign, and parking meter bags, from 

the Department of Public Works and may be required to place the equipment. Event organizers 

are also responsible for posting advisory and/or directional signage if the event affects a majoruse roadway. If sufficient parking is not available, the event organizer may be required to submit 

a shuttle plan. Event organizers are also required to submit a plan for all concessionaires, 

including security, fire lane and fire code compliances, evacuation plans in case of an 

emergency, and trash and grease clean up and disposal. 

The city has a general philosophy that special events are a positive contribution to the 

community and therefore does not currently charge event organizers for its services. However, 

there has been some interest in increased cost recovery, and recently the city made its first 

attempt to recoup a small part of their expenses through a special events parking fee. Parking in 

city garages, usually free on evenings and weekends, is now $3 per day during special events. 
24 

At this time, the city does not have an estimate of the amount of revenue generated through 

special events, though they are believed to generate economic activity and tax revenue. Each 

department associated with special event planning and operations tracks its costs; however, for 

the most part only direct costs, such as personnel hours, are included in this calculation. The city 

frequently requires event organizers to hire private security to supplement police presence, rent 

port-a-johns, and secure first aid services such as an ambulance to remain stationed at the event 

for its duration. 

As with many other cities, Ithaca also requires that vendors specify the City of Ithaca as the 

origin of sales and obtain a New York State Sales Tax Certificate. Ithaca requires event organizers 

to keep all such certificates on file for inspection and review by the city. This ensures that the 

city receives tax revenue associated with sales. 

Conclusions 

The City of Ithaca, New York, is a noteworthy example of PSE organization. The special event 

permit application is very clear about what constitutes a special event: Any event occurring 

within the City of Ithaca that requires three or more of the following permits is subject to the 

provisions of a Special Event Permit: Noise,Assembly or Parade, Street Closures, Use of a Park or 

Public Property, Alcohol,Vending. All permit applications are required to be completed and 

submitted to the City Clerk’s Office. 

The organization of the permitting system allows smaller or simpler events to avoid the process 

of a special event application while at the same time allowing for greater coordination of very 

large events. The guide is very specific about what additional permits, such as for large tents, are 

required and always provides appropriate contact information. The application is also very clear 

about what items event organizers will be responsible for and encourages communication with 

city staff on a variety of issues, rather than simply requiring permits. For example, under 

“Crowd, Control, and Security” the application states: “Event organizers are required to provide 

a safe and secure environment for their event. This is accomplished through sound preplanning 

by anticipating potential problems and concerns. The size, type, time of day, and location of the 

event, as well as the overall activities, are all areas that need to be analyzed in depth. Events 

having the potential to draw a large crowd are of particular concern, and should be discussed 

with the City event planning staff. Some events will require the services of a professional 

licensed security company.” 

One challenge with city-level PSE handbooks in general is that they are often complicated and 

difficult for first-time event organizers to understand. By contrast, the Ithaca handbook provides 

general guidelines to assist new event holders.7

 For example, the handbook notes, “The City of 

Ithaca recommends one toilet for every one thousand people. This figure is based upon the 

maximum number of anticipated attendees at your event during peak time. In cases where 

portable toilet facilities are required, at least 10% of the total toilets shall meet accessibility 

guidelines for people with disabilities. The total number of toilets required will be determined 

on a case-by-case basis.” The City of Ithaca has proven that the process of providing guidance on 

planned special events can be both simple and comprehensive. 

 

7

 The handbook is available on the city’s website, http://www.ci.ithaca.ny.us. 
25 

Chapter 2: Basic Principles of Cost Management and Recovery 

Cost management is the effective, overarching control of an organization’s finances across 

multiple stages (add citation). Such financial control is only possible with a comprehensive 

understanding of an organization’s service provisions: 

1. What services are provided? 

2. Who benefits from these services? 

3. What is the cost to the organization of providing these services? 

Cost management is an organizational responsibility and an integral element of general 

management; good management implies good cost management. Cost management may 

include a policy of full cost recovery, partial cost recovery, or none at all. Whether or not an 

organization engages in cost recovery for a particular service is dependent upon many 

considerations, including the organization’s mission, its traditional role, its legal responsibilities, 

and whether the service benefits the entire community. 

Cost Management 

Cost management allows us to view the cost-benefit relationship of various activities, setting the 

stage for more informed decisions. Cost management generally begins with an initial planning of 

costs, continues through cost tracking and analysis of the information collected, and includes 

evaluations and decisions based on information from the previous stages. There is no set 

blueprint for a cost management system, and these stages may be organized differently to meet 

different organizational needs. 

The four distinct stages described above are depicted in Exhibit 2.1. All of the stages are 

interdependent and decisions in any stage will affect the system as a whole. The system is a 

closed loop, so the last stage leads back to the first stage. The four stages are: 

Cost Planning: Includes activities such as cost 

estimating, forecasting, and budgeting. 

Cost Tracking: Includes discrete coding of 

activities and their associated costs, such as 

personnel time sheets, expense accumulation, 

and the use of financial systems. 

Cost Analysis: Includes reporting on actual costs 

incurred and an analysis of these costs. 

Evaluation and Decision: Includes evaluation of 

the costs with process changes implemented as 

necessary, regular consideration of shifting 

funding sources and options, assessment of 

current asset management and resource 

utilization, and decision-making regarding cost 

recovery. 
26 

The Elements of a Cost Management System 

Cost estimating, forecasting, and budgeting are a part of cost planning. Cost planning is the 

projection of future costs. Cost tracking is backward-looking: it is accounting for what has 

already occurred. Cost tracking refers to following the cost of various activities through the cost 

management system and is accomplished through the use of discrete coding of activities and 

their associated costs. "Discrete coding" refers to tracking time and expenses related to specific 

activities. It includes methods such as time collection (the use of personnel time sheets) and 

expense accumulation. This type of data collection associates costs and activities for the various 

services being performed, enabling accurate analysis and optimal decision-making. While every 

stage of the cost management system is important, cost tracking is one of the most critical 

stages, because weaknesses in data collection 

will have the most detrimental effect on the 

other stages. Inaccurate data will lead to poor 

decisions and poor planning. 

The analysis stage considers individual costs 

and related activities, while the decision stage

evaluates the entire cost management system 

and provides an opportunity to make 

appropriate changes and institutionalize best 

practices. This comprehensive evaluation offers 

an opportunity to improve the system as a 

whole. 

Evaluation and process changes (if necessary) 

should occur after every major event. Research conducted by the Federal Highway 

Administration in 2006 found that while some dialogue did occur following large special events, 

there was rarely a formal review process in place: “Even agencies that regularly conduct an after 

action assessment after major events do not use them as a source of reference for 

programmatic improvements.” The author of that research noted that “after action assessment 

is critical for effective cost management. It also is important when justifying costs and revenues 

and demonstrating the value of a department’s services to customers and the public.”1

Asset management is central to the idea of cost management and includes the ability to show 

how, when, and why resources were committed. Through a comprehensive review of the entire 

portfolio of resources available, asset management leads to an improved understanding of how 

investment can effectively be used in achieving system-wide agency goals at optimal cost 

benefit. The Asset Management Primer published in December 1999 by the U.S. Department of 

Transportation, Federal Highway Administration’s Office of Asset Management is an excellent 

resource for additional information about this topic.2

 

 

1

 Kuehn, D. (2006). Managing Costs for Planned Special Events. Prepared for the 2nd National Conference on Managing Travel for 

Planned Special Events. Federal Highway Administration. 2

 U.S. Department of Transportation, Federal Highway Administration, Office of Asset Management. (1999). Asset Management 

Primer. Available at: http://www.fhwa.dot.gov/infrastructure/asstmgmt/amprimer.pdf 

While different cost management 

systems may include different 

components, the indispensable 

element is an overall understanding of 

the interrelationship between 

activities and costs as well as the 

ability to manage these cost 

relationships to an organization’s

advantage. 
27 

The related concept of resource utilization is especially applicable to planned special events, 

because many changes can be implemented with relative ease. The City of Seattle found several 

methods of reducing costs through optimal resource utilization. The city relocated fun runs from 

city streets to city parks and chose to use alternate or shorter routes for parades. Both of these 

changes significantly reduced the cost of DOT and police traffic and crowd control services, 

reducing Police Department overtime expenses by 40 percent over two years. The Seattle DOT 

further reduced overtime expenses by varying the setup and tear-down times for certain events 

to coincide with regular work hours and by requiring event organizers to provide the labor and 

materials for signage along roadways. These methods are detailed in a 2008 study from the City 

Auditor.3

 

Keeping a cost management system effective is an ongoing process that requires continuous 

review and improvement of each of the elements of the system. Similarly, a cost management 

policy can only be as effective as its reach: it must be disseminated throughout the organization. 

Cost management is therefore a part of everyone’s job. Public officials need to understand what 

cost management means, what their role is in practicing cost management, and how to 

implement their organization’s policies. 

While different cost management systems may include different components, the indispensable 

element is an overall understanding of the interrelationship between activities and costs as well 

as the ability to manage these cost relationships to an organization’s advantage. 

Identifying Costs 

Identification of costs is a critical element throughout the cost management process. Identifying 

costs begins with understanding some the various types of costs, such as: fixed costs, variable 

costs, mixed costs, direct costs, and indirect costs. 

Fixed costs are costs that typically do not change (in total) in response to changes in volume of 

activity. Examples include depreciation, supervisory salaries, and maintenance expenses. 

Variable costs are costs that change (in total) in response to the changes in the volume of 

activity. It is generally assumed that the relationship between variable costs and activity is 

proportional. For example, if the volume of activity increases by 10%, then variable costs in total 

will rise by 10%. Examples include the consumption of direct labor, direct materials, and direct 

expenses. Mixed costs are costs that contain both a variable cost element and a fixed cost 

element. These costs are sometimes referred to as semi-variable costs. One example is a vehicle 

rental that is billed at a base rate plus a per-mile charge. Direct costs are costs that easily can be 

linked to a specific service, activity, or department. Indirect costs are costs that cannot easily be 

linked to a single specific service, activity, or department. 

Costs can also be broken down among labor, material, and overhead, each of which may be 

either a direct or indirect cost as well as a fixed, variable, or mixed cost. Labor, material, and 

direct overhead costs account for the majority of costs in many organizations. These costs are 

 

3

 Office of City Auditor, City of Seattle . (2008). Seattle's Special Events Permitting Process: Successes and Opportunities. Available at: 

http://www.seattle.gov/audit/docs/Special%20Events%20Report%20FINAL1-31-08.pdf 
28 

often easily traceable to specific activities and provide reasonably accurate cost information for 

cost management systems. 

The allocation of indirect overhead is often more complex, since overhead costs can be used by 

many activities and costs can be driven by the sub-activities that support many final activities. 

For example, the cost of maintaining traffic barriers (painting, storing, etc.) is not directly related 

to a specific event. Maintenance costs are incurred regardless of whether or not the barriers 

are used in any specific event, and in fact the barriers themselves may be utilized for other 

activities, such as normal traffic control. The cost associated with this maintenance should be 

allocated against all barriers as an overhead allocation in such a fashion as to ensure that all 

users receive their fair and equitable share of the cost of this activity. Thus the first allocation 

would be to assign the cost of maintenance of the barriers and then allocate the cost of the 

barriers to the event using them. If, as an example, the barriers were required to be painted a 

specific color for a specific event, then the cost of painting them and consequently repainting 

them to their original color would appropriately be a cost of the special event requesting them 

and not part of the general allocation of maintenance costs. 

Since the potential for cost recovery is an important element of cost management, it is helpful 

to follow a consistent and reliable approach which will ensure maximum cost recoverability. The 

U.S. Office of Management and Budget Circular A-87 establishes clear standards for 

distinguishing between various types of costs.4

 While these principles are designed for use with 

federal awards (such as grants or cost reimbursement contracts), they can be incorporated into 

any cost management system. Adopting the principles of Circular A-87 will create a uniform cost 

management approach that is useful in all instances of cost recovery, since recoverability under 

this thorough approach will recover costs under almost any circumstance. 

The circular defines direct costs as “those that can be identified specifically with a particular 

final cost objective” and provides the following examples of direct costs: 

1. Compensation of employees for the time identified and devoted specifically to 

the performance of those awards. 

2. Cost of materials acquired, consumed, or expended specifically for the purpose 

of those awards. 

3. Equipment and other approved capital expenditures. 

4. Travel expenses incurred specifically to carry out the award. 

 

4

 U.S. Office of Management and Budget. (2004). Circular A-87. Available at: 

http://www.whitehouse.gov/omb/circulars/a087/a87_2004.html 
29 

5. Minor items. Any direct cost of a minor amount 

may be treated as an indirect cost for reasons of 

practicality where such accounting treatment for 

that item of cost is consistently applied to all cost 

objectives. 

Circular A-87 defines indirect costs as “those: (a) incurred 

for a common or joint purpose benefiting more than one 

cost objective, and (b) not readily assignable to the cost 

objectives specifically benefited, without effort 

disproportionate to the results achieved... [It] applies to 

costs of this type originating in the grantee department, 

as well as those incurred by other departments in 

supplying goods, services, and facilities.” Examples of 

typical indirect costs that can be assigned to planned 

special events include certain central service costs of the 

organization, such as personal computers, accounting and 

personnel services, purchasing services, depreciation or 

use allowances on buildings and equipment, and the costs 

of maintaining facilities and equipment. The allocation of 

these indirect costs on a pro rata basis to all activities 

performed within the grantee department will provide for 

a more reasonable and equitable costing of the planned 

special event. 

Establishing a number of pools of indirect costs within a 

department may facilitate equitable distribution of 

indirect expenses. These indirect cost pools are 

distributed to benefited cost objectives on bases that will 

produce an equitable result in consideration of relative 

benefits derived. 

Understanding the cost driver, the key activity that drives 

the cost, is necessary for both cost management and cost 

recovery purposes. The cost driver is the activity that has the greatest correlation with actual 

cost. It is the best indicator of cost, although it most likely will not account for the total cost of a 

service. For example, for a street closure requiring the placement of barriers, the cost driver 

may be the number of miles along which barriers need to be placed, the number of personnel 

needed to install the barriers, the number of barriers used, or another related activity. 

Since a cost management system derives its information from the overall financial accounting 

system, the maintenance of a highly reliable, accurate, and timely financial accounting system is 

important. The financial accounting system should be easily understood, well maintained, and 

documented. Properly trained personnel who understand and adhere to the requirement for 

discrete coding of activities and costs will help ensure the integrity of the process. Practicing 

such a continuous improvement approach will not only keep the cost management system 

effective, but will require considerably less effort than large-scale but less frequent updates. 

Exhibit 2.2 

One best practice for allocating 

indirect costs is the concept of 

activity-based costing. In 

activity-based costing, 

resources consumed are 

allocated to the relevant cost 

objective based upon the 

activities being performed. 

Here is a simple, step-by-step 

approach to applying the activitybased costing concept: 

1. Identify the activities 

being performed. 

2. Form cost pools of the 

costs associated with 

those activities. 

3. Identify the cost drivers. 

4. Relate the cost of those 

activities to the planned 

special events that are 

consuming those 

activities. 
30 

Cost Recovery 

Cost recovery activities are optional: an organization may choose to absorb all costs associated 

with planned special events. However, regardless of the extent to which an organization 

engages in cost recovery, it is beneficial for each organization to have a well-defined cost 

recovery policy. Having such a policy will facilitate financial control, ensure an equitable fee 

structure, and distinguish an organization’s core programs and services from additional 

offerings.5

 

Some departments may consider it part of their mission to provide special event services to the 

general public at no charge. Other departments may not wish to achieve 100 percent cost 

recovery. Cost recovery decisions begin with a mission 

statement that provides a clear definition of a 

department’s organizational values and purpose. 

Deciding What Costs to Recover 

There are many issues to consider when 

determining what percentage of expenses should 

be recovered. One consideration is whether the 

services provided for the special event will 

benefit the community as a whole or provide 

individual benefit to a small or specialized group. 

The distribution of benefits from a public service can be viewed as a continuum stretching in 

two directions, as pictured in Exhibit 2.3. 

In general, the organization may choose not to recover costs for activities that are seen as 

benefiting the community as a whole and fulfilling the organization’s mission. These services 

and programs may “increase property values, provide safety, address social needs, and enhance 

quality of life for residents” (Greenplay LLC, 2003). These are usually covered by taxes —they 

benefit the entire community and therefore the entire community pays for them. For events of 

this nature, a minimal fee, rather than partial or full cost recovery, may be appropriate. 

Those activities that are considered highly individual are those which fall outside the core 

mission and may be priced to recover full cost plus a designated profit percentage. 

 

5

 The ideas regarding cost recovery and individual vs. community benefit contained herein were developed by Greenplay LLC and are 

copyright 2003. Their report, “Cost Recovery Pyramid Methodology” is available at www.GreenPlayLLC.com. Information in this 

section specifically relevant to planned special events is, however, the sole work of the author(s). 

Exhibit 2.3

Cost recovery decisions begin 

with a mission statement that 

provides a clear definition of a 

department’s organizational 

values and purpose.
31 

In deciding a level of cost recovery, the organization may also wish to consider to whom they 

provide services and whether this constituency targets certain populations, such as children and 

families, local residents, county residents, regional residents, or non residents of the 

community. Additional questions to consider include: 

1. What is the effect of the event on the resources generally offered by the 

organization? What is the effect to others? Events may be classified as Low 

Effect to Resources or Other People, High Effect to Resources or Other People, 

or Exceed Dept/Personnel Capacity. 

2. Is it the organization’s role to provide such services? Are such services legally 

mandated? The answer to this can range from a legal obligation to provide (such 

as to comply with ADA legislation), something the organization is traditionally 

expected to do, something the organization chooses to undertake because 

there is no other way to provide it, or something the organization should 

consider not providing as it is already being provided. 

3. Does the event provide marketing opportunities for the department or a chance 

to highlight the department’s work and the ways in which it serves the 

community? 

4. Is cost recovery politically palatable? Some decisions may be based in part on 

politics, with the department having little input.6

 

In considering the appropriateness of cost recovery, a few special considerations pertaining to 

planned special events should be thought through: 

1. Treatment of events relating to free speech and the right of freedom to assemble 

2. Treatment of events held by non-profit organizations 

3. Treatment of events held by small organizations 

4. Indirect benefits and increased city revenue 

For demonstrations and other time-sensitive assemblies that may occur in response to current 

events, a permitting process that requires applications to be submitted far in advance would not 

be appropriate. Departments must consider how to facilitate ease and speed in the permitting 

process for such events. Departments also may not wish to cost recover for these events, as that 

could cause an equity concern and limit the right of freedom to assemble for groups that may 

not be able to afford the fees. 

Events held by small organizations lacking funding pose a similar equity dilemma. However, 

good cost management can mitigate this issue as cost recovery will reflect the small share of 

resources used, and small groups will likely be able to afford the amount of resources they have 

used. Departments may nonetheless wish to waive or reduce fees based on the organization’s 

budget or operating expenses and ability to pay applicable fees. Historically, many departments 

waive or reduce fees for events organized by non-profit groups. These events may bring the city 

positive publicity or help a certain segment of the city population. 

 

6 The ideas regarding cost recovery and ‘additional questions to consider’ were developed by Greenplay LLC and are copyright 2003. 

Their report, “Cost Recovery Pyramid Methodology” is available at www.GreenPlayLLC.com. Information in this section specifically 

relevant to planned special events is, however, the sole work of the author(s).
32 

Departments may choose not to engage in cost recovery if indirect benefits associated with the 

event are realized. The city often benefits from large events due to positive publicity and 

revenue from consumer demand associated with the event: taxes on merchandise, tickets, and 

hotel rooms. These events provide a draw for area residents and may make the city a more 

attractive place to live and work. In fact, cities often compete to stage large events. Charging full 

price for such events may cause events to relocate or scale-down, and thus may not be an 

appropriate choice for the city. 

The basic principles for engaging in successful, equitable cost recovery efforts are summarized in 

Exhibit 2.4. These important best practices suggest the need to: implement cost recovery only 

where it is cost-effective, employ activity-based costing whenever it is appropriate, and conduct 

frequent process reviews. 

Exhibit 2.4 Cost Recovery Best Practices 

• Apply cost recovery only when it is consistent with government policy objectives. 

• Apply cost recovery only where it is cost-effective. 

• Do not recover costs for activities specifically funded by other sources, as that would be considered 

recovering twice for the same service. 

• Be aware of additional funding sources, such as private and government grant opportunities, as 

well as what activities may qualify for federal reimbursement. 

• Clearly identify cost recovery revenues through discrete coding. These recoveries should not be 

netted against the organization’s expenses. 

• Cost recovery is based on the provision of services and should ideally be imposed under a fee-forservice arrangement. In some cases, a simple levy is also an option and may be the most costeffective. 

• Within the fee-for-service arrangement, certain events will require certain resources; charge only 

for those services used for that event, rather than imposing an average cost. This is the 

implementation of activity-based costing and ensures that the people who benefit are the ones 

who pay. 

• Make event organizers aware of what the approximate charges will be and provide them with 

sufficient information regarding payment. 

• Organizations should review cost recovery activities annually. A review is necessary because 

funding sources may have changed, new funding opportunities may be available, the organization 

may have new objectives, administration methods may have changed, the cost of certain 

goods/services may have increased, or any number of other changes may have occurred that 

would require adjustment. 
33 

Conclusion

Good cost management is an integral part of good management and an organizational and 

individual responsibility. Cost management is an ongoing and interrelated process that requires 

frequent review to continue functioning successfully. Organizations should develop cost 

recovery policies, but may choose when and if to engage in cost recovery activities. 
34 

Chapter 3: Tracking Planned Special Event Costs 

The purpose of this chapter is to provide guidance to departments or jurisdictions in tracking 

costs for planned special events. As discussed in Chapter 2, cost tracking is critical to the process 

of cost management, as all subsequent 

decisions will be based on information 

gathered during this phase. Unless a 

department or jurisdiction has an accurate 

estimate of the costs incurred for each type 

of activity for special events, they will be 

unable to forecast future expenditures and 

also will be unable to critically examine the 

benefits and costs of hosting events. 

Developing Event and Activity Codes 

Cost tracking involves both event and 

activity codes. The first step is to develop a 

code for each event, so that the hours and 

equipment costs can be associated with a 

specific event. This can be done when a 

permit is requested. A set of codes should 

then be developed for each activity. Each cost that is incurred is assigned both an event and an 

activity code. 

The assignment of activity codes is somewhat more complex, as it is important to accurately 

capture the costs associated with each activity for 

the large number of potential activities. This level 

of detail will allow for the planning, forecasting 

and management of individual costs. The process 

of developing activity codes starts with 

determining the activities that need to be 

performed throughout the entire process, from 

planning all the way to the post-event review. 

Two references, the handbook Managing Travel 

for Planned Special Events,1 and Planned Special 

Events: Checklists for Practitioners,

2 are useful 

resources, as they provide listings of all the 

travel-related activities of staging a planned 

special event. 

 

1

 Federal Highway Administration. (2003). Managing Travel for Planned Special Events. Retrieved from 

http://ops.fhwa.dot.gov/program_areas/sp-events-mgmt/handbook/index.htm 

2

 Federal Highway Administration. (2006). Planned Special Events: Checklists for Practitioners. Retrieved from 

http://ops.fhwa.dot.gov/publications/psechecklists/index.htm 

Planned Special Events: 

Checklists for Practitioners

consists of six checklists on 

event-specific planning for 

planned special event travel 

management. It provides 

common, sequential steps for 

plans and activities that 

practitioners may use for most 

significant planned special 

events, regardless of the event 

or area type. 

Managing Travel for Planned 

Special Events communicates new 

and proven institutional and highlevel operational techniques and 

strategies for achieving a 

coordinated, proactive approach to 

managing travel for all planned 

special events in a region, in addition 

to facilitating successful and costeffective management of specific 

planned special events. 
35 

It is important to determine activities in advance to provide a road map to be used throughout 

each event. The activities list can remain flexible, but it should be understood that changes that 

are made will affect the ability to track changes in the number of units used per event and their 

costs across events and from year to year. Once the activities are determined, a distinct cost 

code can be assigned to each of the activities. This cost code allows tracking of the specific tasks 

undertaken and costs incurred as part of each planned special event. A sample breakdown of

planned special event activities is provided in Exhibit 3.1. The task list presented is 

representative and can be amended to meet a locality’s (or event’s) specific needs. The activities 

undertaken by each jurisdiction differ, and this task list can be modified according to the needs 

of each. The key to efficient cost-tracking is the preparation of this list as a first step, rather 

than as events progress. 
36 

In order to facilitate the tracking of costs in an efficient and accurate manner, the planning team 

should coordinate the development and assignment of cost codes with financial staff. The use of 

these codes by those involved in the planned special event will allow for the capture and 

consequent tracking of all costs associated with the various activities of the planned special 

event. Departments may develop their own cost codes and financial accounting system if there 

is no existing system, as long as all costs are summed when estimating city-wide expenses. It 

Exhibit 3.1 Task List 

Activity # Category Activity 

1 Pre-Planning Create Task List and Assign Distinct Cost Codes 

2 

Planning 

Review operations strategies and resource allocations from previous event occurrences 

3 Prepare contingency plans and emergency access routes 

4 Assess on-going or planned construction activities and their effects on the event 

5 Determine stakeholders involved in event as well as performance goals and objectives 

6 Determine internal and external Measures of Effectiveness for event 

7 

Feasibility 

Determine the event traffic generation, modal split and traffic arrival and departure rates 

8 Determine origins, travel times and distances traveled for event patrons 

9 Determine parking spaces required for event and locate parking lots and access routes 

10 Assign all event traffic to the roadway network and perform capacity analysis to determine deficiencies 

11 

Traffic Management 

Determine freeways, arterials, and local routes that require additional capacity 

12 Assign all traffic to parking lots and determine parking lot access and circulation 

13 Determine pedestrian routing from all sources (lots, mass transit, etc.) including disabled accessibility 

14 Determine techniques to be used to increase freeway capacity 

15 Determine techniques to be used to increase street-level capacity 

16 Determine techniques to increase transit service usage, including costs of additional service 

17 Develop travel demand management techniques and HOV Incentives 

18 Determine alternate routes and appropriate treatments 

19 Develop Incident Management operations (planning, coordination, and implementation) 

20 Traveler 

Information Determine devices and strategies to disseminate information 

21 

Implementation 

Determine quantity of equipment needed (barrels, signs, etc.) as well as communication devices 

22 Determine quantity of personnel needed (paid as well as volunteer) 

23 Conduct table-top exercises and field exercises 

24 

Day-of-Event 

Assign primary and/or secondary command posts and staff for each 

25 Develop briefing schedule, location and staff needed 

26 Conduct data collection, surveillance, and performance measures during event operations 

27 Note real-time changes made and cost effects during event 

28 

Post Event 

Schedule field personnel debriefing locations, time and staff 

29 Prepare event patron survey and analysis 

30 Prepare Post Event Report 

31 Prepare operational cost analysis and assessment for future events 
37 

should also be clear whether each department’s expenses include overhead and staff time 

involved in handling applications and planning, as these activities may be dealt with differently 

across departments. Discussion between members of the planning team, from State and local 

transportation officials to law enforcement, may assist with tracking costs consistently across 

departments and jurisdictions. Such information-sharing may also benefit those departments 

that are unsure how to implement cost-tracking. Financial staff should be involved in the 

process to ensure that costs are collected in accordance with overall financial system protocols 

governing direct costs and overhead items. 

Collecting Direct and Indirect Costs

Financial systems generally classify costs into direct and indirect costs. Direct costs can be 

specifically identified and assigned to a particular cost objective, which in this case is a specific 

special event. Indirect costs are incurred for common purposes and either cannot be assigned to 

a specific cost objective or can be assigned only at an effort disproportionate to the results 

achieved. 

The distinction between direct and indirect costs is important, as a department need only assign 

event and activity codes to direct costs. Indirect costs will be pooled in the financial accounting 

system and there may be multiple indirect cost pools, each of which will be distributed 

according to a different formula. 

Direct costs for planned special events will generally consist of direct labor, equipment, 

materials and purchased services. The collection of costs for each of these components is 

described in the following subsections. 

Direct Labor Costs 

Direct labor costs for each individual are found by multiplying the hours charged to an event by 

the individual’s labor rate. The sum of this calculation across all workers charging hours to a

particular event provides total direct labor costs. 

Typically, workers fill out a timesheet in which they charge their hours to distinct projects or 

activities. Hours may be differentiated between regular and overtime hours, with the latter 

reflecting a higher rate. 

Exhibit 3.2 Example of a DOT Timecard Entry Data Sheet 

Source: http://www.dot.ri.gov/humanresources/forms/FMS_Timecard_Manual.pdf
38 

An example of an employee timesheet data entry form from the Rhode Island Financial 

Management System Timecard Entry User Manual is provided in Exhibit 3.2. Note that 

employees assign hours to both projects (events) and tasks (activities). 

Equipment Costs 

Managing special events will often require the use of equipment such as trucks and other 

vehicles, barricades, signs, variable message signs, flashing arrow sign units, and temporary 

lights. Since equipment typically has a lifetime of many years and is used for multiple events or 

purposes, only a portion of the costs of these items is assigned to a particular event. Typically, 

the costs of an individual item are depreciated (see Exhibit 3.3) to derive an annual cost. This 

annual cost is then converted to a per-day, per-hour, or per-week charge based on average 

annual usage for that type of equipment. The individual event will pay for the piece of 

equipment based on the per-unit rate and the amount of usage. 

An example of an equipment price list--the short-term lease rates from the South Carolina State 

Fleet Management Motor Pool--is provided in Exhibit 3.4. Note that there is both a fixed (daily) 

and variable (per-mile) charge for each vehicle type. 

Exhibit 3.3 

The Concept of Depreciation 

“The established accounting technique of 'depreciation' can be used to convert 

capital outlays into annual costs. Depreciation is a method of allocating the costs of 

capital outlays over the useful life of the resource acquired. A simple 'straight-line' 

method of depreciation may be used to calculate costs of depreciation by dividing 

the acquisition cost of the resource by the number of years for which the resource 

is expected to provide services. For example, a collection truck that costs $150,000 

and has a useful life of 10 years would have an annual depreciation cost of onetenth of its total capital cost, or $15,000. Examples of costs that local governments 

should depreciate include the costs of equipment, vehicles, and structures owned 

by the local government... Local governments should recognize annually the cost of 

depreciation for all such assets until they are fully depreciated. No depreciation 

expense, however, should be recorded for assets that have remained in service 

after their estimated useful life has ended.” 

Source: Florida Department of Environmental Protection, “Municipal Solid Waste Management Full 

Cost Accounting Workbook for Local Governments in Florida,” Prepared by: Tetra Tech EM Inc, Vienna, 

VA, June 30, 1997. 
39 

Materials and Purchased Services 

Special events may require purchases of materials or services. For example, a particular special 

event may require extra security that is contracted to an outside vendor, such as a security firm. 

Since these purchases are made exclusively for a particular special event, they may be charged 

directly to that event. If an item is to be used for more than one event, it can be allocated to the 

events individually as long as it is allocated in a reasonable manner. 

Indirect Costs 

Once the direct costs of managing special events have been tabulated, these costs are 

augmented by indirect or overhead costs. Indirect costs are incurred for common purposes and 

either cannot be assigned to a specific cost objective or can be assigned, but only at an effort 

disproportionate to the results achieved. An example of an indirect cost is leave and fringe 

benefits for employees. These benefits include sick leave, annual leave, holiday leave, insurance, 

retirement, employer social security payments, etc. 

An example of a labor-loading analysis for the Nevada Department of Transportation is provided 

in Exhibit 3.4. In the exhibit, totals are developed for direct labor costs as well as costs for leave 

and fringe benefits. The total cost for leave and fringe benefits is then divided by total direct 

labor costs to develop a ratio of 62.46 percent as shown at the bottom of the exhibit. Direct 

labor rates for individual personnel can be multiplied by this rate to estimate indirect costs. 

Other types of indirect costs can be developed and divided by some measure of direct costs for 

allocation purposes. For example, costs for overhead items such as offices or data processing 

can be added together and allocated based on number of employees, hours, labor costs or total 

direct costs. 

Exhibit 3.4: Example of a State Motor Pool Lease Rate Table 

Motor Pool (Short-Term) Lease Rates 

Vehicle Type Daily + Per Mile 

Full-size Sedan $20 .17 

Intermediate Sedan $17 .16 

Compact Sedan $14 .15 

Intermediate Station Wagon $17 .16 

Compact Station Wagon $17 .15 

Full-size Van $18 .21 

Mini-Van $13 .17 

Source: http://www.ogs.state.sc.us/statefleet/SFM-lease-rates.phtm 
40 

Assigning Costs to Activities 

Assigning direct and indirect costs to each event allows a department or jurisdiction to 

understand how the cost of managing these events affects their budgets. It provides data which 

affords the ability to weight costs against the benefits of the events to the community. 

However, to be able to manage and forecast costs, the collection of data by both event and 

activity is imperative. A list of potential activities is provided in Exhibit 3.1. These activities are 

divided into eight categories, including: 

• Pre-Planning 

• Planning 

• Feasibility 

• Traffic Management 

• Traveler Information 

• Implementation 

• Day-of-Event 

• Post Event 

Note that the level of activity detail to be collected will depend upon the needs of the particular 

department or jurisdiction, sophistication of its financial management system, and the 

complexity of its events. Some may choose to collect data only at the level similar to the eight 

categories listed above, while others may collect data at a more detailed level, such as the 31 

activities listed in Exhibit 3.1. The following subsections describe one of the activities from each 

of the eight categories. The purpose is to illustrate what these activities are comprised of and 

how direct costs can be assigned to them. 
41 

Exhibit 3.5: Example of Labor-Loading Analysis 

Actual Costs Fringe %2 Loading3

Direct Labor

5100 Salaries 59,336,737 $ 

5810 Overtime Pay (Non Holiday) 3,514,266 $ 

5880 Shift Differential 53,903 $ 

5901 Payroll Adjustments (2,780) $ 

5910 Standby Pay 25,056 $ 

5940 Dangerous Duty 3,458 $ 

5980 Call Back 204,418 $ 

Total Direct Labor 63,135,057 $ 

Leave Employer Costs

5610 Sick Leave 3,459,132 $ 3,459,132 $ 

5620 Annual Leave 4,686,250 $ 4,686,250 

5630 Holiday Leave 3,077,648 $ 3,077,648 

5640 Compensatory Leave 1,057,848 $ 1,057,848 

5650 Other Leave 225,065 $ 225,065 

5820 Holiday Pay-OT 175,015 $ 175,015 

5830 Compensatory Leave Payoff 286,883 $ 286,883 

5930 Longevity Pay 726,201 $ 726,201 

5960 Terminal Sick Leave 389,073 $ 389,073 

5970 Terminal Annual Leave 380,085 $ 380,085 

5975 YE Leave Payoff 36,483 $ 36,483 

Total Leave Costs 14,499,683 $ 14,499,683 $ 

Total Labor (Direct and Leave) 77,634,740 $ 

Fringe Costs

5200 Industrial Insurance 3,444,271 $ 4.44 % 643,279 $ 

5300 Retirement 11,217,954 $ 14.45 % 2,095,155 

5400 Personnel Assessment4 $ 0.00 % - 760,749 

5500 Group Insurance 9,244,652 $ 11.91 % 1,726,605 

5700 Payroll Assessment4 $ 0.00 % - 272,606 

5750 Retired Employee Insurance4 $ 0.00 % - 1,339,737 

5800 Unemployment 141,612 $ 0.18 % 26,449 

5840 Medicare 790,775 $ 1.02 % 147,691 

5841 Social Security 96,520 $ 0.12 % 18,027 

7170 Clothing/Tool Allowance4 $ 0.00 % - 58,850 

Total Fringe Cost 27,367,727 $ 4,657,206 $ 

Total Leave, Fringe and Labor $ 19,156,889 105,002,467 $ 

Labor Loading Factor (Total Labor Load/Direct Labor) 30.34%

Labor Load for Fringe-Leave/Direct

Total Direct Labor 63,135,057 $ 

Total Leave Cost 14,499,683 $ 

Total Fringe Cost 27,367,727 $ 

Total Ineligible Fringe Cost4 $ (2,431,942)

Total Leave and Eligible Fringe Cost 39,435,467 $ 

Total Fringe and Leave Cost/Direct Cost 62.46%

Object and Description
42 

Pre-planning 

The first step in tracking costs for planned special events is to determine the activities that need 

to be performed throughout the process (activity #1 from Exhibit 3.1). Since in our hypothetical 

community the DOT Traffic Engineering Division is the lead agency for planned special events, 

Senior Level staff in Traffic Engineering determined the appropriate activities and assigned a 

distinct cost code to each of the activities. Their selections were then reviewed by staff at other 

departments involved with planned special events. During this process, each of the individuals 

involved in this activity assigned the hours on their biweekly time sheet to the appropriate cost 

code for activity #1. The hours were then tabulated, and the hypothetical staff time breakdown 

for this activity is shown in Exhibit 3.6. In total, this activity required 50 hours at a direct cost of 

$2,036.00. Since this is the first event for which our hypothetical community has used these 

activity cost codes, the cost of this activity will be lower for subsequent events and years, as this 

list will only require minor revisions. Having cost data for this individual activity will aid in 

developing future budgets. 

Planning

The Planning category is the development of contingency plans. The planning category develops 

scenarios in the event that day-of-event modifications to the traffic management plan are 

Exhibit 3.6: Create Task List and Assign Distinct Cost Codes 

Department Level Hours Rate Total 

DOT Traffic Engineering (TE) Senior Staff 6 $55.00 $330.00 

Mid-Level Staff 8 $38.00 $304.00 

DOT Planning Department Senior Staff 2 $55.00 $110.00 

Mid-Level Staff 4 $38.00 $152.00 

Police Senior Staff 2 $57.00 $114.00 

Mid-Level Staff 4 $28.00 $112.00 

Office of Emergency Management 

(OEM) 

Senior Staff 2 $56.00 $112.00 

Mid-Level Staff 4 $39.00 $156.00 

Incident Command Center (ICM) Senior Staff 2 $52.00 $104.00 

Mid-Level Staff 4 $29.00 $116.00 

Traffic Control Center (TCC) Senior Staff 2 $50.00 $100.00 

Mid-Level Staff 4 $24.00 $96.00 

Transit Senior Staff 2 $59.00 $118.00 

Mid-Level Staff 4 $28.00 $112.00 

TOTAL $2,036.00 
43 

needed. These are packaged into a plan that provides a selection of options for a range of 

potential unexpected occurrences or events. 

Task #4, Assess Construction Activities and Effects, was chosen for illustrative purposes. This 

task requires meetings that include members of the DOT Construction Department, as well as 

the Design Department, to determine any road construction projects that are currently 

underway or are in the planning phases and are scheduled to be in place on the day of the 

event. A typical scenario would be to reschedule planned roadway construction and 

maintenance projects to accommodate known events. The breakdown of staff time for this 

activity is shown in Exhibit 3.7. 

Feasibility 

The feasibility category enumerates steps and associated considerations for gauging the effect 

that one or more proposed special events may have on surface transportation operations in the 

vicinity of the venue and the region as a whole. The project team develops a feasibility study to 

determine if a planned special event will cause travel problems, where and when identified 

problems will occur, and the magnitude of each identified problem. 

Activity #10, Traffic Assignment and Capacity Analysis, was chosen to illustrate the feasibility 

category. In this activity, staff members from the DOT’s Traffic Engineering and Planning 

Departments begin the process of assigning all event traffic to the roadway network and 

performing capacity analysis to determine roadway deficiencies. This is a labor-intensive task 

Exhibit 3.7: Assess On-going or Planned Construction Activities 

Department Level Hours Rate Total 

DOT Traffic Engineering (TE) Senior Staff 3 $55.00 $165.00 

Mid-Level Staff 14 $38.00 $532.00 

DOT Planning Department Senior Staff 4 $55.00 $220.00 

Mid-Level Staff 14 $38.00 $532.00 

DOT Construction Management Division Senior Staff 5 $58.00 $290.00 

Mid-Level Staff 18 $39.00 $702.00 

DOT Design Division Senior Staff 4 $59.00 $236.00 

Mid-Level Staff 12 $40.00 $480.00 

Traffic Control Center (TCC) Senior Staff 2 $50.00 $100.00 

Mid-Level Staff 8 $24.00 $192.00 

Transit Senior Staff 1 $59.00 $59.00 

Mid-Level Staff 4 $28.00 $112.00 

TOTAL $3,620.00 
44 

involving an analysis of all of the data that was gathered in earlier activities as part of the 

planning phase. 

A first step in this process might be to estimate event attendance. The second step would be to 

determine the percentage of event patrons who will use modes of travel other than the 

automobile and then to determine average automobile vehicle occupancies. This allows the 

number of vehicles arriving at the event to be calculated. A third step determines event patron 

origins and their arrival and departures rates. For example, for events that have a definite start 

and end time, most patrons will generally arrive within one hour of the beginning of the event 

and depart within a half hour of the end of the event. These three steps will provide estimates 

of automobile volumes by time. 

Estimated volumes are then factored into the roadway network, and a capacity analysis is 

performed to determine whether there are any deficiencies in the roadway network. The 

breakdown of staff time for this portion of the project, tabulated from employee time sheets, is 

shown in Exhibit 3.8. Once the deficiencies are determined, roadway plans can be implemented 

to reduce congestion, manage travel demand, and insure safety. 

Traffic Management

The traffic management category includes activities that analyze traffic, parking, and pedestrian 

management techniques to mitigate any and all anticipated problems on the day of the event. 

Operations strategies and resource applications are developed to mitigate potential congestion, but all 

operations tactics need to be examined in depth to ensure that one particular strategy does not defeat 

the objectives of another. A successful traffic management plan: (1) satisfies the customer requirements 

of all transportation system users, and (2) meets the allotted budget for personnel and equipment 

resources assigned to the day-of-event operation. 

Activity #13, Determine Pedestrian Routing, was chosen to illustrate the traffic Management Category. 

Traffic Engineering and Planning staff will have to consider all types of parking, including on-site, off-site, 

disabled, reserved, participant, valet, media, employee, bus, recreational vehicle, taxi and limousine, 

Exhibit 3.8: Traffic Assignment and Capacity Analysis 

Department Level Hours Rate Total 

DOT Traffic Engineering 

(TE) 

Senior Staff 5 $55.00 $275.00 

Mid-Level Staff 52 $38.00 $1,976.00 

DOT Planning Department Senior Staff 2 $55.00 $110.00 

Mid-Level Staff 39 $38.00 $1,482.00 

TOTAL $3,843.00 
45 

and emergency vehicle staging. After the parking types are determined, each type is assigned to the 

appropriate lot and then the internal parking lot layouts evaluated. 

If the majority of patrons will arrive within an hour of the event, circulation of pedestrians and 

automobiles is critical. Vehicles will be arriving while pedestrians are walking from their cars, homes and 

public transit. The major design criterion is to minimize contact between pedestrian routing and vehicles 

entering the parking lots. This effort maximizes safety and efficiency. In addition to the internal parking 

lot layout, the design of the access drives to the lots needs to be analyzed and the appropriate traffic 

control, including police presence, should be determined. The breakdown of staff time for this portion of 

the project can be seen in Exhibit 3.9. 

Implementation

The implementation portion of managing travel for planned special events includes testing and training 

activities, as well as the development and deployment of a traffic management plan. Implementation 

activities are a transitional phase between planning and operations. These activities improve the 

efficiency of traffic management plan deployment and increase traffic management team preparedness. 

The implementation phase of the project uses the data and analysis from all of the other phases to 

determine what will be needed to ensure safe and efficient traffic and pedestrian flow throughout the 

event, including any contingency plans. 

Exhibit 3.9: Determine Pedestrian Routing

Department Level Hours Rate Total 

DOT Traffic Engineering (TE) Senior Staff 6 $55.00 $330.00 

Mid-Level Staff 42 $38.00 $1,596.00 

DOT Planning Department Senior Staff 4 $55.00 $220.00 

Mid-Level Staff 39 $38.00 $1,482.00 

Police Senior Staff 2 $57.00 $114.00 

Mid-Level Staff 15 $28.00 $420.00 

Transit Senior Staff 3 $59.00 $177.00 

Mid-Level Staff 26 $28.00 $728.00 

TOTAL $5,067.00 
46 

Activity #21, Determine Quantity of Equipment, was chosen to illustrate the traffic Implementation 

Category. The traffic management plans are followed to determine the type and quantity of equipment 

necessary for the event. The implementation portion of the project deals only with the equipment itself 

and not design and layout, which are determined in previous activities. This allows the focus to be on 

equipment availability and cost. The costs for equipment used during the event are presented in Exhibit 

3.9. "Linear feet" is abbreviated as "LF" and "square feet" as "SF." It is assumed that existing equipment 

will be used and that new equipment will not need to be purchased. Each piece of equipment has a 

purchase value as well as a depreciation value. The DOT can establish a cost-per-unit per day that takes 

into consideration the purchase price and the expected lifespan of the equipment. Cost can be 

determined in this manner for each piece of equipment used for planned special events. This is a usage 

cost, rather than the cost of the good itself. These values need to be determined prior to tracking costs 

for the planned special event and need to be updated periodically to account for changes in value. 

Exhibit 3.10: Equipment Cost 

Code Equipment Quantity Unit Cost Per Unit Total Cost 

1A Traffic Cones 2500 Each $0.25 625.00 

1B Traffic Guides 200 Each $0.28 56.00 

1C Drums 2000 Each $0.35 700.00 

1D Type III Barricades 600 Each $1.15 690.00 

 

2 Pavement Markings 2500 LF $1.90 4,750.00 

3 Signs 6000 SF $7.00 42,000.00 

3A Sign Stands 150 Each $2.25 337.50 

3B Portable Signs 85 Each $2.30 195.50 

3C Sign Bagging 600 Each $12.00 7,200.00 

3D Variable Message Signs 15 Each $12.00 180.00 

3E Flashing Arrow Sign Unit (FASU) 12 Each $9.00 108.00 

 

4 Concrete Barrier 2500 LF $2.50 6,250.00 

4A Water Filled Barrier 1500 Each $1.25 1,875.00 

5 Temporary Lights 400 Each $1.75 700.00 

 TOTAL 65,667.00 
47 

Day-of-Event

The day-of-event activities facilitate the actual operation of the traffic management plan, as well as 

monitoring of real-time conditions before, during, and after the event. These activities support real-time 

traffic management and control decisions during the day of event and provide key performance 

evaluation data for future planning. 

Activity #26, Data Collection and Surveillance during Event Operations, was chosen to illustrate the Dayof-Event Category. It includes data collection, surveillance and performance measurement during the 

event operations. The types of data to be collected, along with the surveillance methods, are 

determined in earlier activities, so this activity involves only actual collection and surveillance. The data 

should be collected in a consistent manner and may be used for future events at the same site or for an 

event of a similar type. The possible methods used to collect data include: 

• Road sensors for measuring traffic flow 

• Vehicle probes for collecting data on travel times, trip origins, and trip destinations 

• CCTV systems for viewing real-time traffic information 

• Traffic signal system detectors to measure congestion 

• Manual turning movement traffic counts 

• Parking occupancy counts 

The data collected is also used to determine when and if additional parking lots should be opened due 

to overflow conditions. The volume necessary for the overflow condition, as well as the method used to 

direct people to the overflow lots, should have already been determined as part of the Traffic 

Management category of activities. This includes the placement and bagging of signs along the routes in 

case additional lots are necessary. The staff time and equipment costs for this task can be seen in Exhibit 

3.11.
48 

Post-Event

The Post-Event category includes the evaluation of local and regional operations based on debriefings 

and an analysis of traffic data collected on the day of event. The outcome of each and every activity 

represents the first step in planning for future events. This can contribute toward proactively improving 

travel management for all planned special events in a region. The project team can compile comments, 

develop surveys, and identify successes and failures to create a post-event report, often called an afteraction report. The after-action report should be completed in conjunction with the project team and 

conducted with a focus on resource management and improving the delivery of services for the next 

planned event. 

Activity #29, Event Patron Survey Preparation and Analysis, was chosen to illustrate the Post-Event 

category. An event patron survey is a useful tool for determining what can be changed for future events 

as well as assisting in the planning of similar events. The survey itself should be developed during the 

planning phase of the project. Unlike all of the other tasks discussed as part of this project, event patron 

survey preparation and analysis spans the life of the project and encompasses time spent throughout all 

of the phases of the project. The survey also encompasses the remaining sections of the project, since 

the survey should reflect real-time conditions on the day of the event. The survey needs to be 

completed, and the means of distribution determined, before the event itself so the process is seamless. 

 Exhibit 3.11: Data Collection and Traffic Surveillance during Event Operations 

Department Level Hours/Quant. Rate Total 

DOT Traffic Engineering (TE) Senior Staff 3 $55.00 $165.00 

Mid-Level Staff 24 $38.00 $912.00 

DOT Planning Department Senior Staff 2 $55.00 $110.00 

Mid-Level Staff 18 $38.00 $684.00 

Police Senior Staff 6 $57.00 $342.00 

Mid-Level Staff 12 $28.00 $336.00 

Incident Command Center (ICM) Senior Staff 6 $52.00 $312.00 

Mid-Level Staff 11 $29.00 $319.00 

Traffic Control Center (TCC) Senior Staff 3 $50.00 $150.00 

Mid-Level Staff 8 $24.00 $192.00 

Transit Senior Staff 6 $59.00 $354.00 

Mid-Level Staff 12 $28.00 $336.00 

Equipment 

Road sensors 15 $250.00 $3,750.00 

Vehicle probes 10 $175.00 $1,750.00 

CCTV systems 8 $285.00 $2,280.00 

Traffic signal system 

detectors 12 $180.00 $2,160.00 

TOTAL $14,152.00 
49 

When the event is completed, this survey needs to be analyzed and a report prepared that discusses the 

results of the survey. This allows meaningful data to inform future event planning. The staff time for this 

portion of the project can be seen in Exhibit 3.12. 

Cost-Tracking for an Example Special Event 

The final activity identified in Exhibit 3.1 includes cost analysis of the event. An analysis of the total costs 

of managing the event is developed by tracking direct costs throughout the project and assigning 

indirect costs collected through the financial management system. 

The purpose of this section is to provide a simple stylized example of the tabulation of costs of a 

hypothetical event. This example will help to familiarize the user of this primer with the types of data 

necessary to successfully track the costs of a planned special event. 

The stylized example is provided in Exhibit 3.13. The example uses the following hypothetical event: An 

outdoor concert at Jones Field Park in Any Town, USA that is held on July 4, 2008 and located off State 

Route 1. The hypothetical event is also assumed to be the 47th PSE event in the area in 2008. The exhibit 

lists the DOT costs for the activities with direct costs, including: 

• Hour and rate detail for staff members 

• Usage and rate for equipment 

• Costs for purchased materials and services 

• Leave and fringe rates for staff costs 

• General overhead rate that is applied to labor costs 

• Equipment and materials handling rate that is applied to equipment and material costs 

Exhibit 3.12: Event Patron Survey Preparation and Analysis 

Department Level Hours Rate Total 

DOT Traffic Engineering (TE) Senior Staff 11 $55.00 $605.00 

Mid-Level Staff 24 $38.00 $912.00 

DOT Planning Department Senior Staff 8 $55.00 $440.00 

Mid-Level Staff 18 $38.00 $684.00 

TOTAL $2,641.00 
50 

Exhibit 3.13: Costs for a Hypothetical Example Planned Special Event 

Code Activity Item Quantity Unit Unit Cost Cost

PSE-08-47-1 Create activity list and assign cost codes Senior Staff 8 Hour $55.00 $440

PSE-08-47-1 Create activity list and assign cost codes Mid-Level Staff 12 Hour $38.00 $456 PSE-08-47-4 Assess construction activity impacts Senior Staff 16 Hour $55.00 $880 PSE-08-47-4 Assess construction activity impacts Mid-Level Staff 58 Hour $38.00 $2,204

PSE-08-47-10 Traffic Assignment and Capacity Analysis Senior Staff 7 Hour $55.00 $385

PSE-08-47-10 Traffic Assignment and Capacity Analysis Mid-Level Staff 91 Hour $38.00 $3,458

PSE-08-47-13 Determine Pedestrian Routing Senior Staff 10 Hour $55.00 $550

PSE-08-47-13 Determine Pedestrian Routing Mid-Level Staff 81 Hour $38.00 $3,078 PSE-08-47-26 Event Data Collection/Traffic Surveillance Senior Staff 5 Hour $55.00 $275 PSE-08-47-26 Event Data Collection/Traffic Surveillance Mid-Level Staff 42 Hour $38.00 $1,596

PSE-08-47-29 Event Patron Survey Preperation/Analysis Senior Staff 19 Hour $55.00 $1,045

PSE-08-47-29 Event Patron Survey Preperation/Analysis Mid-Level Staff 36 Hour $38.00 $1,368 TOTAL 385 $15,735

PSE-08-47-21 Determine Equipment Traffic Cones 2,500 Daily $0.25 $625 PSE-08-47-21 Determine Equipment Traffic Guides 200 Daily $0.28 $56 PSE-08-47-21 Determine Equipment Drums 2,000 Daily $0.35 $700 PSE-08-47-21 Determine Equipment Type III Barricades 600 Daily $1.15 $690 PSE-08-47-21 Determine Equipment Signs 600 SF $7.00 $4,200 PSE-08-47-21 Determine Equipment Sign Stands 150 Daily $2.25 $338 PSE-08-47-21 Determine Equipment Portable Signs 85 Daily $2.30 $196 PSE-08-47-21 Determine Equipment Sign Bagging 60 Daily $12.00 $720 PSE-08-47-21 Determine Equipment Variable Message Signs 15 Daily $12.00 $180 PSE-08-47-21 Determine Equipment Flashing Arrow Sign Unit 12 Daily $9.00 $108 PSE-08-47-21 Determine Equipment Concrete Barrier 500 LF Daily $2.50 $1,250 PSE-08-47-21 Determine Equipment Water Filled Barrier 1,500 Daily $1.25 $1,875 PSE-08-47-21 Determine Equipment Temporary Lights 400 Daily $1.75 $700 TOTAL 8,622 $11,637

PSE-08-47-21 Determine Equipment Pavement Markings 2,500 LF $1.90 $4,750 PSE-08-47-21 Determine Equipment Paint 50 Gallons $29.95 $1,498 PSE-08-47-21 Determine Equipment Security Services 1 Each $3,595.00 $3,595 TOTAL 2,551 $9,843

LFR Leave/Fringe Rate Apply to Labor Costs Percent 0.6246 $9,828

LOH Labor Overhead Rate Apply to Labor Costs Percent 0.6513 $10,248

EMHC Equipment/Materials Handling Charge Apply to Equip/Material Costs Percent 0.0547 $1,175

TOTAL $58,466

Total Cost

Event Name:

Event Code:

Date:

Department:

Outdoor Concert

Labor Costs

Equipment Costs

Materials and Purchased Services Costs

Indirect and Overhead Costs

PSE-08-47

July 4, 2008

Transportation

ANY TOWN, USA - SPECIAL EVENT COST SUMMARY FORM

Location: Jones Field Park
51 

Chapter 4: Strategies for Cost Minimization and Cost Recovery 

The following strategies are designed to guide departments and agencies that desire to improve 

resource management and cost recovery. The methods fall into four groups: data collection, resource 

utilization, direct cost recovery, and indirect cost recovery, each with a few suggested strategies, as 

described in Exhibit 4.1. The strategies are provided merely as guidelines and a platform for featuring 

examples that jurisdictions may incorporate or learn from. Each strategy has its benefits and drawbacks, 

and each jurisdiction must weigh these with regard to their particular local needs. 

PSEs can generate economic activity and provide communities with publicity and an outlet for 

community expression. Engaging in data collection and proper resource utilization prior to direct cost 

recovery will prevent unnecessary expenses from being passed on to other agencies, the federal 

government, or the public. This approach can be beneficial to the jurisdiction as well, since their goal is 

often to retain and promote special events when they benefit the city and its residents. 

Data collection, a part of cost management, is necessary in part because agencies must collect costs 

before they can bill for them. However, engaging in cost management also provides accountability and 

transparency and can inform public policy. Data collection allows jurisdictions to understand their costs 

and quantify the financial burden and benefits of special events. In this chapter, we expand the concept 

of data collection to include fiscal effect data and non-financial items such as number of attendees and 

number of PSEs. Fiscal impact data is especially relevant to informing local policy on event recruitment 

and cost recovery. Fiscal impact data allows jurisdictions to understand the net effect of events, 

comparing the costs associated with planning and operations with the increased tax revenue. 

Resource utilization is the application of asset management. Once the greatest costs are identified 

through data collection, targeted resource utilization strategies can be applied to reduce costs where 

they will have the most effect. 

Direct cost recovery is useful when a jurisdiction feels that the event largely provides a private or 

individual benefit, rather than a public service. Direct cost recovery can also be used to offset a portion 

of costs and to pass some incentive along to event organizers to minimize costs. Fiscal effect data, if 

available, can be used to inform the policy debate on direct cost recovery. 

Indirect cost recovery recognizes that the tax revenues generated by events may be captured by 

different agencies and jurisdictions than those responsible for facilitating the PSE. A budget line item can 

be used to capture the revenue necessary to cover costs. In other instances, an agency or jurisdiction 

may face costs for events for which they have limited responsibility for, such as a national event, and 

they may look to the Federal government for financial support. 
52 

Resource Utilization

Strategies to reduce costs and improve resource utilization include scheduling the time and 

location of events to minimize traffic disruption and traffic management costs. While these 

activities do not result in direct recovery of costs, they reduce the costs to be recovered by 

increasing efficiency. For jurisdictions that already engage in direct cost recovery, resource 

utilization strategies will reduce the cost to event organizers. In this primer, detailed 

instructions are provided for two mitigation strategies: 

Strategy 4 – Event Time and Location Planning

Strategy 5 – Traffic Mitigation Planning

Exhibit 4.1 Cost Recovery Activities
53 

Strategies 

The following subsections contain descriptions of each strategy in detail, including an overview, 

discussion of strategy implementation, examples of jurisdictions that have employed such strategies, 

and additional considerations. 

Data Collection 

Strategy 1: Collect Event and Venue Information 

Overview 

It is important for officials to have an understanding of the 

number, frequency, type, and attendance of PSEs in their 

jurisdiction. This information is useful because it allows officials to 

plan resource allocations and activities to help facilitate these 

events and minimize the effects these events have on non-PSE 

government operations and the general public. 

Implementation 

Information about PSEs in most regions is largely fragmented and 

dispersed. There are a series of actions, however, that can be 

taken to develop meaningful estimates of the number of PSEs in a 

region, while at the same time minimizing the duration and effort 

of the data collection and estimation process. 

Developing estimates is a four-step process. The first step is to 

identify the region of interest, whether it is a district, city, 

metropolitan area, county, state, or the entire nation. Planners 

can spatially bound their study area based on their area of 

responsibility, or segment the areas to delegate the datagathering responsibility to small administrative units. It is 

important to consider, however, that an event in one area can 

affect departments in another. All event venues that affect the 

department should be considered a part of the study area, even if 

the event does not occur in that area. 

The second step is to establish a minimum event attendance size 

to define PSEs. This attendance-determined definition decides the 

attendance level at which PSE traffic related congestion becomes 

an issue of concern. A small city may consider an event with 500 

attendees to be a PSE that would have significant transportationrelated implications, while a large city may consider an event with 5,000 attendees to be a PSE with 

large transportation implications. It should be noted that attendance is not the only factor that 

influences PSE-related congestion. Other PSE congestion factors include event location, parking 

availability, accessibility by public transportation, sufficient public transportation capacity, and use of 

transportation management technologies such as intelligent transportation systems. Nevertheless, 

Exhibit 4.2

Example categories of Planned 

Special Events: 

College and Professional Team 

Sports 

• Football 

• Baseball 

• Basketball 

• Ice Hockey 

Other Professional Sports 

• Auto Racing 

• Horse Racing 

• Boat Racing 

• Golf 

Street and Park Events 

• Marathons 

• Walk-a-thons 

• Bike-a-thons 

• Parades 

• Fairs 

• Festivals 

• Protests 

• Political Events 

Shows & Concerts 

• Expositions 

Conventions 

• Trade Shows 

• Concerts 
54 

attendance is a major contributing factor in PSE related congestion, and it is difficult to plan parking, 

public transportation needs, and transportation management systems without having estimates of the 

number of event attendees. 

The third step is to identify events in the region of interest that are likely to have attendance levels that 

exceed the minimum attendance definition of a PSE in the region. 

Next, micro- and macro-level approaches to data collection can be implemented to gather information 

from secondary sources, event organizers, event venue managers, governmental agencies, and eventrelated associations. The dual-level approach is useful because it helps overcome challenges in data 

dispersion and availability. 

The micro-level approach involves contacting event venue officials, event organizers, and permitting 

authorities such as police departments. The macro-level approach involves collecting data from trade 

associations representing the relevant entities within various special events categories. The primary data 

items that need to be collected and estimated for each of the identified event types in a region are the 

following: 

• Number of event days annually 

• Average attendance 

• Total attendance 

Any of these three can be determined when the other two are known. 

Additional Considerations 

Additionally, if it is possible, revenue or spending-perattendee estimates should be collected for each PSE 

category. This will help determine the economic and fiscal 

effects of local PSEs. Once this information has been 

collected and a better understanding of the number, 

frequency, and attendance size of PSEs in a region has been 

developed, the data can be used to effectively plan and 

facilitate PSEs. 

Strategy 2: Collect Cost Data 

Overview 

It is important for transportation officials to collect cost data 

regarding the provision of goods and services related to 

facilitating PSEs. However, collecting cost information can be 

difficult for transportation officials due to frequent 

misunderstandings of costs concepts, the involvement of multiple agencies, and difficulty differentiating 

PSE-related activities from other activities. Chapter 3 provides a detailed description of how government 

agencies can track costs of PSE planning and operations. 

A useful reference on how to 

develop an estimate of PSEs in 

a region is a FHWA report by 

Jack Faucett Associates 

entitled “Planned Special 

Events – Economic Role and 

Congestion Effects” (FHWAHOP-08-022). The report 

documents the development 

of the first-ever estimate of 

the annual average number of 

PSEs with more than 10,000 

attendees in the U.S. 
55 

Implementation 

When detailed cost data for a number of events have been collected, it becomes easier to estimate the 

costs associated with similar events in the future. This is particularly helpful if the number, frequency, 

type, and attendance of PSEs are known. PSE facilitation cost information helps officials plan resource 

allocation and budget development. Additionally, when major cost categories are known, it is possible 

to analyze which services cost the most and might benefit from gains in service or technological 

efficiency. 

Strategy 3: Collect Fiscal Impact Data 

Overview 

Estimates of the fiscal and economic effect of PSEs in a region have multiple uses. These estimates can 

help public officials determine whether specific PSEs cost the government more or less to facilitate than 

the event generates in positive economic and fiscal effects. If the fiscal effects of PSEs are found to be 

large, they may completely offset the need to recuperate PSE facilitating costs from event organizers, 

attendees, and other sources. However, PSE facilitation costs and fiscal effects may accrue to different 

agencies and are difficult to track. 

Implementation 

Fiscal impact can be calculated by estimating tax revenue collected from economic activity associated 

with PSEs. Taxes can be levied on good and service sales, hotel 

stays, and event tickets. Attendance at PSEs often increases 

demanded for goods and services provided at or near PSE 

venues. These goods and services, which are often taxed, 

include food, beverages, and fuel. However, many local and 

state governments do not tax food and beverage sales. 

To estimate the fiscal impact of a PSE, the first step is to 

develop estimates of average spending per attendee on goods 

and services related to an event. These estimates can be 

developed from surveys and secondary sources. As noted 

earlier, attendees spend money on event merchandise, food, 

beverages, hotels, and transportation. The next step would be 

to collect the applicable tax rate for each of these expenditure 

categories. Lastly, multiply average spending per expenditure 

category, the applicable tax rate, and the total number of event 

attendees. The sum of this value for all the expenditure 

categories is equal to the total fiscal impact of the PSE. 

For example, in the FHWA 

study titled " Planned Special 

Events – Economic Role and 

Congestion Effects” (FHWAHOP-08-022), a per capita 

multiplier was used to 

estimate the fiscal impact of 

the average number of annual 

PSEs in the U.S. with more 

than 10,000 attendees. The 

multipliers used in the FHWA 

study were based on a San 

Jose, California report, which 

estimated the fiscal effects of 

six different events that 

occurred in the city and was 

based on data collected from 

10,000 event attendees. 

Source: Skolnik, J., Chami, R., & Walker, M. 

(2008). Planned Special Events- Economic 

Role and Congestion Effects. Washington 

DC: U.S. Department of Transportation, 

FHWA.
56 

A 2007 study performed for the City of San Jose provides an example of this estimation process. The 

types of tax revenues that were estimated in the San Jose study include: sales, hotel occupancy, hotel 

business improvement district fee, ticket, and gasoline.1

 

Additional Considerations 

It is important to estimate and consider the fiscal effects PSEs have on different agencies and groups. 

Since different levels of positive and negative effects can accrue to different stakeholder groups, it is 

necessary to address questions of equity and responsibility with regard to PSE facilitation and PSE 

effects. In order to address these issues meaningfully, it is also necessary to attempt to quantify the 

positive and negative fiscal effects of PSEs. However, this is not an easy task. Tracking the costs and 

benefits of facilitating PSEs is difficult and often involves estimates that can vary widely based on 

specific assumptions, such as event participant spending and fiscal effects. 

Resource Utilization 

Strategy 4: Event Time and Location Planning 

Overview 

Resource utilization is a central element of cost management. Simple changes, such as having marathon 

courses loop rather than extend from a fixed point, can reduce traffic management costs. These changes 

are dependent upon having the ability to negotiate with event organizers. 

Implementation 

Seattle structures its permitting system such that the Seattle DOT assesses costs involved and attempts 

to minimize them prior to granting a permit. To be able to engage in such resource management, a 

department must be able to have recourse to deny the event or certain elements of the event. Resource 

management is also about assessing available opportunities and alternatives. For example, the city of 

Rockford, IL is considering replacing some of its police traffic personnel with trained volunteers to 

reduce costs. 

Marketing to encourage the use of public transportation and alternative modes of transportation, such 

as biking and walking, can also prove cost-effective. The city of Washington, D.C. uses money obtained 

through a CMAQ grant to aid event organizers in providing alternative transportation options to patrons. 

Similarly, just before the opening of Nationals Stadium and the Pope’s visit in 2008, Metro engaged in 

large marketing campaigns to encourage ridership and defray downtown congestion. For more 

information on resource management, see Chapter 2. 

Additional Considerations 

Proper resource utilization can often be beneficial. For many events, changing the start time or day may 

be undesirable, but the additional costs incurred from having an event during overtime hours should 

 

1

 Sports Economics. 2007. “Analysis of the Economic and Fiscal Impact of Cultural and Sporting Events in San Jose.” Accessible at 

http://www.sjeconomy.com/publications/oedpubs/economic.impact.report.2007.pdf 
57 

always be recognized and considered. The goal of resource utilization is to increase efficiency, a topic 

that may at times be complicated and difficult to address, but is otherwise desirable. However, 

increasing efficiency and evaluating all events’ use of resources can raise political issues as resources are 

shifted. 

Strategy 5: Traffic Mitigation Planning 

Overview 

Simple changes, such as stretching event start and end times to avoid traffic clustering and locating 

venues or events near each other to take advantage of shared resources, can reduce costs. Some ideas 

and examples are provided below, but the only thing this strategy really requires is creative planning 

that makes the most of available resources and identifies opportunities for cost-saving measures. 

Implementation 

Events held within a few days of each other at the same location or in close proximity can reduce setup 

costs; equipment can be left in place between events, as well, and would only need to be unloaded and 

loaded once. Cones and barriers can be collected and held near the event site; signs can remain 

displayed for events that are only a few hours apart and be bagged between events, rather than taken 

down for events held a few days apart. The two events will be able to use either the same or very similar 

traffic management plans, and personnel will already be familiar with the desired traffic pattern and 

associated challenges. Some cities have adopted similar strategies for permanent venues. Philadelphia 

and Detroit both have several large venues built in close proximity to each other to take advantage of 

shared resources, such as parking capacity and signage. This strategy also allows equipment to be stored 

nearby, which reduces transit and provides the opportunity to employ a staff dedicated solely to these 

venues. 

Alternatively, very large events can benefit from stretching out their start and end times to reduce the 

clustering of traffic flows. At the Indianapolis 500, NASCAR held a free car show prior to the actual race 

to encourage some portion of patrons to arrive over a two-hour time period rather than just before the 

official start of the event. Some minor league baseball teams, such as the Scranton Wilkes-Barre 

Yankees, allow children onto the field to run around the bases, thus stagger the rate at which patrons 

leave the event. Holding fireworks or concerts after events is another popular approach. Often, staging 

these before-and-after events is less expensive than paying for the additional personnel that would 

otherwise be needed to maintain traffic flow. 

Additional Considerations 

The start and end times for events held near each other can be staggered as much as possible to prevent 

congestion caused by traffic clustering. Permanent venues located near each other may sometime be 

unable to stagger appropriately and may occasionally lack adequate parking capacity. With festivals and 

other similar events, changing the event days to facilitate resource-sharing may be unrealistic or 

undesirable. When creating before-and-after-event plans, it is worthwhile to consider whether the 

benefits outweigh the costs. 
58 

Direct Cost Recovery 

Strategy 6: Initiate a Pilot Program 

Overview 

For departments that historically do not recover costs from event organizers, but are currently 

considering billing for certain city services, a pilot program is a good approach. A pilot program that 

allows cost recovery to be phased in over time will allow for feedback, adjustments, and lessen the 

burden on event organizers. A pilot program should include disseminating information about cost 

recovery regulation, fee structures, and fee exceptions to event organizers and will most likely include 

elements from Strategy 7 “Developing a Retail-like Environment.” 

Implementation 

Initiation of a pilot program should begin with discussions regarding cost recovery goals, pilot program 

objectives, fee structure, time-frame for the program, and whether certain events will be exempt. 

Consideration of the fee structure should include whether to reduce fees for non-profit or community 

events, ways to ensure access to city services for small groups lacking funding, and a decision regarding 

which types of events are considered to have First Amendment rights and therefore will be exempt from 

cost recovery. While almost all jurisdictions differentiate between First Amendment gatherings and 

other planned special events, jurisdictions often follow different guidelines. For example, the City of San 

Francisco considers parades to be cultural expressions akin to First Amendment rights and therefore 

does not seek cost recovery for such events. Other jurisdictions consider a march, but not a parade, to 

be a First Amendment right. Additional fee structure options include a flat permit fee, a permit fee 

based on attendance or a fee levied as a percentage of actual city expenditures. For example, the City of 

Seattle found attendance to be highly correlated with event management cost.2 

Jurisdictions should also consider the economic activity and revenue generated by each event when 

designing a fee structure. While the City of Seattle recently instituted greater cost recovery for barricade 

set-up and take-down, it continues to provide this and other services free of charge for more than 20 

long-standing city special events such as Seafair. These costs can be significant: the cost to the city in 

2006 for set-up and take-down of barriers at Seafair alone was $85,000.3

A person or committee can be designated to oversee the implementation of the pilot program. This 

entity will then be responsible for soliciting and coordinating reviews, public comments, and internal 

department communication regarding the program. Evaluations can be completed after each planned 

special event and include commentary from event organizers and all departments affected by the new 

program. The department can also provide a forum for public comment and consider the feedback 

provided from the public, event organizers, and other city officials or departments in revising the 

program. The department will need to engage in communication efforts to inform event organizers of 

the new fees. 

 

2

 Office of City Auditor, City of Seattle . (2008). Seattle's Special Events Permitting Process: Successes and Opportunities. 3

 Office of City Auditor, City of Seattle . (2008). Seattle's Special Events Permitting Process: Successes and Opportunities.
59 

Additional Considerations 

The department can consider the costs of staff time and resources that will need to be committed and 

compare this to the anticipated returns of the program. The department may also want to carefully 

consider whether direct cost recovery is appropriate for their jurisdiction. 

Strategy 7: Develop a Retail-like Environment 

Overview 

Recovering costs from event organizers in a consistent manner can be facilitated by the use of a retaillike environment, which includes the ability to hold deposits, bill the appropriate party, generate 

receipts or other proof of payment, reconcile actual payments received against amount owed, and 

provide refunds as necessary.4

 This retail-like environment may also include the set up of a designated 

place to pay fees in person or a virtual payment center where fees can be paid online. All forms should 

clearly state where payments can be made. In addition to the physical capacity to handle billing and 

tracking of payments, providing clear information to event organizers regarding estimated costs or fees 

is an important component of creating a retail-like setting. 

Implementation 

This strategy requires a reliable system for handling payments and deposits. In addition to this, 

departments may consider making fee structures more transparent and providing this information to 

event organizers as they begin to plan the event. 

A clear, detailed, and readily available fee structure accomplishes two objectives. In addition to allowing 

the department to bill parties and reconcile payments with greater ease, it can allow event organizers to 

be active participants in applying resource utilization and lowering costs. A published fee structure that 

includes options and shows cost differentials will allow event organizers to minimize costs subject to 

their constraints. Organizers may then choose to reduce their costs by holding their event during nonovertime hours or holding the event in a different location, if possible. Jurisdictions or departments, 

where such interdepartmental coordination is too difficult or not possible, may want to consider having 

one location where all permits and fees can be gathered and paid and information regarding all fees and 

fee exceptions is available. Currently, it can be very difficult for event organizers to gather such 

information, as it is frequently provided separately by each agency, is difficult to aggregate, and in some 

cases may only be available after the event details have been finalized. Sharing cost information with 

event organizers as they develop the event will give them an incentive to work with the city and be 

more active participants in the effort to reduce costs. While this is not a substitute for the department 

engaging in optimal resource utilization, as discussed in Chapter 2, this can enhance that effort. 

Research conducted by the Federal Highway Administration found that many departments are not setup to engage in retail-like activities and may therefore not be collecting all applicable fees.5

 One city 

audit found that the police department had waived administrative overhead costs (normally 22.6%) for 

several organizations without proper authority, despite availability of a legitimate channel to waive or 

 

4

 Kuehn, D. (2006). Managing Costs for Planned Special Events. Prepared for the 2nd National Conference on Managing Travel for Planned 

Special Events. Federal Highway Administration. 

5

 Kuehn, D. (2006). Managing Costs for Planned Special Events. Prepared for the 2nd National Conference on Managing Travel for Planned 

Special Events. Federal Highway Administration. 
60 

reduce fees upon demonstration by an event sponsor that it is unable to pay the full fee.6

 Inconsistent 

fee collection can reduce department credibility and will often result in fewer available funds. 

Departments that already engage in direct cost recovery may wish to ensure proper payment and 

processing of received funds prior to increasing cost-sharing. 

Additional Considerations 

Fees for events held by non-profit organizations or events considered to be expressions of free speech 

are often waived or reduced. If waiving fees, the department should be sure to look at whether optimal 

resource utilization has been used, since event organizers are insulated from the cost. 

For small cities that do not hold many planned special events, the costs of implementing this strategy 

may outweigh the benefits. However, jurisdictions should keep in mind that the benefits include not just 

increased cost recovery, but also a more consistent application of a rule, which may be a goal in its own 

right. The strategy would involve staff time and may also require physical space, the services of a 

consultant to create a virtual space, a physical space, or specialized accounting software. An additional 

consideration is that creating a “one-stop shop” for all permits requires a high level of interdepartmental cooperation and support from the city. 

Strategy 8: Direct Negotiation with Major Event or Venue Operators 

Overview 

Many departments of transportation have successfully persuaded other stakeholders to incur certain 

costs associated with planned special events. While this strategy may be employed for any large event, 

it is particularly useful for recurring events or events held at permanent venues, such as convention 

centers, stadiums, and arenas, which may rely heavily on city resources. Negotiations should stress that 

all parties involved in the execution of an event are partners. 

Implementation 

The negotiation process starts with preparation, which sets the tone for discussions. Enter negotiations 

with the understanding that a “win-win” solution is possible and frame the negotiation as a problemsolving process in which all the partners bear a responsibility. Clearly communicate the city’s willingness 

to collaborate and find alternative solutions while remaining focused on the overarching goal 

established during preparations. A thorough understanding of the conditions is needed before 

contacting special event partners.

• Establish goals for engaging event holders in negotiations. 

• Identify major stakeholders, such as venues, event organizers, event sponsors, and local 

economic development authorities. Chart who is involved in each event. The most obvious party 

may not be the one who steps in to contribute. In Washington, D.C., the D.C. Sports and 

Entertainment Commission provided funding to compensate for police overtime at late ending 

baseball games. 

 

6

 City and County of San Francisco Office of the Budget Analyst. (n.d.). Special Events. Retrieved September 17, 2008, from SfGov: 

http://www.sfgov.org/site/budanalyst_index.asp?id=5190 
61 

• Calculate the costs of the services provided for events, considering all costs: policing, 

disruptions, changes to traffic patterns, and anything else. Be prepared to discuss benefits as 

well, especially the effect on city tax revenue. 

• Develop an engagement strategy that prioritizes who to negotiate with, and how cost recovery 

from each event contributes to the overall cost recovery goal. Start with events or venues that 

cost the city the most on a yearly basis. Regular event holders with an investment in the city, 

such as sports teams, are usually a good place to start. Prepare to engage all the major players 

who have a stake in the events and determine what you hope to achieve from each negotiation. 

• Understand all event partners’ assets and liabilities in individual negotiations; these can be used 

as bargaining chips and facilitate a quid pro quo between negotiators. For example, in return for 

receiving compensation for traffic disruption, a city can shift a portion of city resources to event 

area road improvements and beautification. 

In the proper environment, negotiating directly with major event partners can recover a significant 

amount of special event costs. Cities like Washington, Phoenix, San Francisco, and New York all 

successfully negotiated with major event holders to at least partially recover their costs. The San 

Francisco Giants and the 49ers currently pay 31% of the cost of providing police coverage at 3 Com Park, 

and The Office of the Budget Analyst has recommend that the city pursue further negotiations with the 

two teams prior to the opening of a new downtown ball park. The New York City Department of Parks 

and Recreation has a twenty-year lease agreement with the Brooklyn Cyclones granting the Cyclones 

exclusive use of Key Span Park. The rent is based on, among other things, a per-ticket fee, actual game 

attendance, special event income, advertising, and the Surf Avenue retail area. BBC, the company that 

owns the Cyclones, is required to deposit $27,670 into a sinking fund that permits the Parks Department 

to perform capital improvement projects at the stadium. 

Additional Considerations 

Major event holders may feel unfairly singled out with this strategy. To ensure that the concerns are 

mitigated, consider establishing a well-justified distinction between their events and those that will not 

be targeted. The media can play a role in swaying public opinion on the matter and should also be 

considered as a factor. 

Strategy 9: Institute Special Event Parking Fees or Taxes 

Overview 

For jurisdictions that do not wish to bill event organizers directly for costs, a special event parking fee is 

one strategy that can provide some level of cost recovery. Benefits of the strategy include the potential 

for the fee to encourage people to carpool or take public transportation, thereby reducing congestion 

and the associated expense of traffic control. Charging a fee for parking during times of high parking 

demand can “manage parking demand, manage vehicle traffic, and generate revenue.”7

 Unlike 

individual parking meters, wireless pay stations have a centrally-controlled system that can that be 

programmed to charge a certain amount during certain hours. 

 

7

 Litman, T. (2006). Parking Taxes: Evaluating Options and Impacts. Victoria: Victoria Transport Policy Institute. 
62 

Implementation 

City parking garages that do not charge for parking on evenings and weekends can begin charging during 

a special event or charge a special event fee in addition to any fees already in place. Jurisdictions may 

choose to charge a premium for parking that is especially close to the venue. If there are no pubic 

garages near the event, jurisdictions may also consider implementing an additional special event tax on 

privately-owned parking garages located near the event. 

In 2007, the New Jersey Legislature approved the imposition by any municipality of a special event 

parking tax,8

 and the City of Tampa has implemented special event parking rates at city garages and 

certain venues like the Tampa Bay Performing Arts Center, Tampa Convention Center, St. Pete Times 

Forum, and the Tampa Library.9

 The city garage rates are a flat fee per event, but vary between facilities. 

The fees are generally $5 to $10. At Nationals Stadium in Washington, D.C., which is located in an area 

with little available parking space, valet parking is available for $50, nearby parking is available for $20, 

and free parking and shuttle service are provided from RFK Stadium, which has excess capacity. 10 The 

City of Ithaca implemented a special event parking fee of $3 this year and recovered $3,000 at their last 

event, the Ithaca Festival. Estimated city costs for the Ithaca festival were between $45,000 and 

$60,000, but city officials view special events as a net benefit for the city and were pleased with the 

additional income generated by the parking fee, even though it was a small portion of the costs. 

The City of Pasadena has implemented pricing on street spaces which had previously been free of 

charge.11 The city felt the pricing was necessary to improve parking availability. Initially, local merchants 

opposed the idea, but they consented when the city offered to dedicate all revenues to downtown 

improvements. This policy has been extremely successful. Parking revenue funding has resulted in 

extensive downtown redevelopment including new street furniture, trees, and pedestrian facility 

improvements, which have attracted new visitors. Local sales revenue and sales tax revenue has also 

increased. 

Additional Considerations 

While one benefit of this strategy is that it will generate revenue without restricting access to the event, 

the percentage cost recovery from this method is likely to be small relative to the cost of city services. 

 

8

 State of New Jersey. (2008, January 13). Retrieved from P.L. 2007, c.296. 

9

 City of Tampa. (n.d.). Special Events Parking. Retrieved September 17, 2008, from TampaGov: 

http://www.tampagov.net/dept_parking/Programs_and_Services/event_parking.asp 10 http://wtopnews.com/?nid=25&sid=1390834 11 Litman, T. (2006). Parking Taxes: Evaluating Options and Impacts. Victoria: Victoria Transport Policy Institute. 
63 

Strategy 10: Institute a Ticket Tax 

Overview 

Implementing a traffic management tax on special event tickets is another method of direct cost 

recovery. The tax would be collected from event patrons when they purchase a ticket. However, the tax 

is also likely to affect event organizers. A small tax on a small ticket price is likely to have little effect. For 

events with tens of thousands of attendees, a flat tax of just a few cents per ticket can be enough to 

cover traffic management expenses. However, the implementation of a 15% tax on relatively expensive 

tickets, such as those for sporting events, could have a negative effect on both event organizers and 

event patrons. As with all taxes, the burden of the tax depends on the sensitivity of demand to a change 

in price. The tax could also be extended to cover merchandise sold as part of the event. 

Implementation 

The tax rate on tickets and merchandise at the Verizon Center in D.C. was recently increased from 5.75 

percent (D.C. sales tax) to 10 percent, part of a plan approved by the D.C. Council to pay for $50 million 

in renovations at the sports arena.12 The D.C. Council also recently considered raising taxes on Nationals 

tickets, concessions, merchandise and parking from 10 to 15 percent to cover a shortfall in revenues and 

pay down the stadium debt.13 While such "stadium district" taxes have traditionally been used to fund 

development, the City of San Jose charges a 5% “gate fee” on gross admissions revenue for special 

events. The tax revenue is paid to the city, but earmarked for the Festival, Parade, and Celebration grant 

program. 

Additional Considerations 

Ticket taxes only work when there are tickets. This strategy would not work with many large recurring 

events, such as the Washington, D.C. Cherry Blossom Festival, that are free to the public and feature 

small vendors likely to deal largely in cash. There also may be considerable opposition to implementing a 

tax on tickets. Michigan recently considered a tax on tickets to professional sporting events, shows, 

movies and concerts. The tax was expected to generate $100 million a year, but faced considerable 

opposition by the public, who viewed it to be an unnecessary additional tax on activities that contribute 

to quality of life. 

Indirect Cost Recovery 

Strategy 11: Develop a Line Item 

From a political and administrative perspective, adding a line item for planned special events can lead to 

better decisions. The line item reveals the cost of events and enables discussion as to whether special 

event cost recovery policy is meeting the needs of the community. Additionally, it helps legislatures 

manage costs, because public administrators required to predict and justify the budget are accountable 

to manage resources effectively to meet the stated budget. A discussion of line item implementation is 

provided in Chapter 5. 

 

12 http://www.washingtonpost.com/wp-dyn/content/article/2007/04/19/AR2007041902588.html 13 http://www.news8.net/news/stories/0708/536200.html 
64 

Strategy 12: Apply for Grants 

Jurisdictions should make an effort to discover whether federal funding is available to defray PSE 

transportation costs. Sources of federal funding are discussed in Chapter 6. 

Conclusion

As part of effective cost recovery, when a Department of Transportation or other entity considers which 

of these activities to undertake, it must evaluate the resources involved and the expected benefits. Once 

such an evaluation is completed, a set of appropriate activities can be selected and implemented to help 

them improve cost recovery efforts.
65 

Chapter 5: Developing a Planned Special Events Line Item 

Introduction 

Regardless of a jurisdiction’s cost recovery policy, introducing a line item to a department or city budget 

can be a useful cost management tool. A line item clearly identifies the costs incurred to host planned 

special events and is useful for policymakers who, when clearly confronted with the magnitude of the 

funds, will more closely consider the benefits that special events provide to the community versus the 

costs that are absorbed. For an administration that is interested in understanding how much planned 

special events cost each year, the line item is a way to motivate those involved in the tracking process to 

accurately record expenditures and receipts. 

Benefits of a Line Item 

Adding a line item to the municipal budget for planned 

special events improves the transparency of department 

or municipal finances. This facilitates more effective 

decision-making by state and local leaders and 

encourages more productive citizen participation. 

Planned special events positively affect the community, 

but they come at a cost. Events generate direct benefits 

for some organizers and increase the stature and name 

recognition of the city. These effects ripple through the 

economy, creating indirect and induced effects. The costs of hosting events, however, are not 

necessarily paid by those who benefit from the event. 

From an administrative perspective, including a well-justified line item in the budget clearly states the 

anticipated costs of planned special events and ensures that policy makers recognize the costs of the 

events. Accurately categorizing and forecasting costs will reduce unexpected expenditures which 

necessitate drawing-down the general fund and lead to political difficulties, especially concerning the 

use of overtime hours. 

The recovery costs from individual events can also raise issues regarding free speech, support for 

charitable causes, or community-building needs. Direct cost recovery may not be an issue over which 

politicians want to risk popularity. An alternative is to fund the cost explicitly through the budgets of the 

affected agencies with a designated line item. 

Anatomy of a PSE Line Item 

An effective planned special events line item is a comprehensive forecast of how much the department 

or municipality expects to spend to host events during the upcoming year. It is the natural next step 

from cost tracking, because it only requires analyzing the data collected, estimating changes to 

individual items, and presenting the results clearly. 

The more comprehensive and well-justified the line item is, the more useful a tool it can be. A city that 

can get all departments involved in special event planning and implementation to account for their 

In Rochester, New York, staffing 

special events was the leading 

cause of police overtime over a 

10-year period. Those costs can 

be anticipated. 

Source: Democrat and Chronicle, 

November 19, 2006 
66 

expenditures and forecast them for the coming year has made substantial progress toward 

implementing the most appropriate policy for the community. Even if it is only used at the departmental 

level, the line item demonstrates responsible management practices. The more special event cost 

factors that are included in the line item, the better justified it will be to policymakers. 

A line item can be as basic as budgeting for expected overtime or as detailed as including every cost a 

department or municipality incurs to fulfill its role in staging events. Similarly, the level of analysis can 

vary depending upon the budgeters’ desire to be thorough. While the most accurate estimates 

anticipate how a variety of trends may affect costs, it is also possible to estimate costs by trends from 

previous years. 

More detailed line items include several cost 

categories, as well as multiple indicators of future 

costs. For example, a line item for a city department 

of transportation may include overtime and regular 

hours spent on special events, as well as fuel, 

equipment, administrative overhead, and any other 

costs. Predicting those costs for the upcoming fiscal 

year could incorporate historic trends of costs and 

events, effects of anticipated new events, and the 

effects of any policy changes towards planned special 

events. 

Calculating a PSE Line Item 

There is no standard for forecasting costs when 

formulating a line item. What works best for one 

agency may not work well for another, because it 

largely depends on the resources and data available. 

Generally, however, the more detailed the forecast, 

the better. 

Each department’s ability to develop a well-justified 

forecast will depend on the level of detail of cost 

information that it currently collects. At the least, a 

department can modify its current-year expenses by 

adding an inflation adjustment. At best, a department 

that itemizes costs for each individual event can 

generate a very accurate estimate of the upcoming 

year’s costs by estimating the following: 

1. The number of events and the size of each 

2. The changes in the amount of each itemized unit, 

such as overtime 

3. The change in cost per unit for recurring events 

4. The number of unexpected events based on 

historical trends 

Bay City, Michigan hosts 

numerous regular special events, 

including the second biggest 

Independence Day celebration in 

the State of Michigan. Planned 

special events are an important 

part of community life that also 

creates economic benefits. 

In 2000, the police department 

began including a line item for 

police overtime in its annual 

budget, according to Police Chief 

Michael Cecchini. Budgeting for 

overtime is a simple way of 

capturing the majority of special 

event costs, and it can be done 

simply. For the 2008 budget, 

Cecchini adjusted the previous 

year’s overtime by a 2 percent 

cost of living adjustment. He feels 

that the presence of the line item 

is beneficial to the department 

and the city because it allows 

citizens and public servants to 

have a “total budget picture” 

from which to track costs in 

relation to benefits. It has also 

helped the police department 

stay on budget by reducing 

surprise costs. 

Source: Interview with Police Chief Michael 

Cecchini, October 3, 2008 
67 

Tables 5.1 and 5.2 show how a hypothetical department of transportation budgets for planned special 

event costs. It is a simple method requiring only yearly aggregate data. The department of 

transportation, in this case, knows how many itemized units were used for the entire year for planned 

special events and their costs. From the total units used, it can then determine an average per event 

using the total number of events hosted. Therefore, the department has a basis from which to estimate 

the number of events, the average units used per event, and the price per unit for the upcoming year. 

The first step is to estimate the number of events for the upcoming year, based on information about 

new events and the historical trend of new events. This process is shown in the first third of Table 5.1. 

The example shows that a regular Mardi Gras parade was cancelled, reducing the number of anticipated 

parades, and that if the trend of unexpected events were to continue, another three (rounded to the 

nearest whole number) would occur the following year. 

Next, the budgeter can adjust the number of units required to stage each event by estimating the effect 

of any changes in special events policies or management practices. This process is shown in the middle 

Exhibit 5.1 Special Events Unit Estimation Table 

 Current 

Year 

Predicted 

Change Proposed Notes 

Events 

 Parades 5 -1 4 Mardi Gras parade cancelled 

 Golf 

tournaments 

4 +2 6 Rotary and ABC, Co. tournaments 

added at SCC 

 Farmers’ 

markets 

26 0 26 No change 

 Street festivals 17 +3 20 New Turkish & Salvadorian festivals & 

crafts fair 

 Unexpected 52 +5.0% 55 5% average increase over 5 years 

Total events 104 111 

Units/event 

 Regular hours 50 +5.0% 53 New overtime policy 

 Overtime 100 -5.0% 95 New overtime policy/ volunteer 

requirement 

 Fuel 150 -5.0% 143 New volunteer requirement 

 Equipment -- -- -- No unit measure, priced per event 

Price/unit 

 Regular hours $35.00 +2.7% $35.95 COLA adjustment 

 Overtime $52.50 +2.7% $53.92 COLA adjustment 

 Fuel $3.60 +9.5% $3.94 Energy information administration 

estimate 

 Equipment* $200 +5.0% $210 *Cost per event 
68 

third of Table 5.1. For example, the new overtime policy is expected to require more special events 

shifts to be covered during regular hours, increasing the regular hours, while it also contributes to a 

decrease in overtime hours. 

Third, the budgeter should estimate changes to factors that influence the price of each unit. This process 

is shown in the bottom third of Table 5.1. For example, the Energy Information Administration forecasts 

a 9.5 percent increase in fuel prices, resulting in a fuel cost estimate 34 cents higher than the current 

year. 

Fourth, the budgeter multiplies the estimated number of events by the estimated units per event and 

their cost to get the projected expenses for the upcoming year, as shown in Table 5.2. For example, the 

estimated total of 111 planned special events multiplied by an estimated 53 hours of regular work time 

per event results in 5,883 estimated hours for the whole year. At an estimated rate of $35.95, the 

expected regular hours will cost the department $211,494. 

Finally, the sum of all the special events items becomes the expenditure line item in the department 

budget, as shown in the lower portion of Table 5.2. 

 

Averaging across number of events is a very basic way of using aggregate data. It may be more useful to 

use the unit per event attendee if that is possible, should aggregate attendee data be available. If 

resources are available, it is best to categorize costs by size or event type for estimation, or even 

estimate the cost for each event individually. 

Additional Considerations 

From a policy development perspective, an expenditure line item only provides half of the information 

necessary to calculate the total fiscal effect of planned special events on the municipal or departmental 

budget. The other half is the amount that the department or city expects to receive from fees and billing 

for cost recovery. 

Depending on the structure of financing and cost recovery methods, the budgeting organization may 

wish to include costs and receipts together in a net cost line item or present forecasted receipts 

separately in the budget. For example, a department that recovers costs from event organizers itself 

must provide the city with a net cost line item for the city budget, in order to avoid billing the city and 

organizers for the same costs. On the other hand, if the city recovers special events expenditures into 

the general fund, then the department should submit a gross cost line item to the city, and the 

department responsible for recovering costs should produce a separate estimate as part of the 

budgeted revenues. 

Estimating recoverable costs is similar to estimating costs. It can be done simply by trending recovered 

costs as a percentage of gross costs, or be more thorough and include items like the number of events, 

fee structures, recovery rates, and incidence of fee waivers. 
69 

Conclusion 

A planned special events line item is an excellent way for administrators, politicians, and the general 

public to account for and acknowledge the costs of events so they can be measured against the benefits 

they bring to the community. Line items improve expenditure control, provide management 

accountability, and facilitate evaluation of policy. Including special event costs in a line item ensures that 

all parties understand the substantial costs that special events have on a community and is a definitive 

step towards creating a planned special events policy. 

Exhibit 5.2 Itemized Planned Special Events Costs and Budget Line Item 

 Current Year Projected 

Item Units Unit Cost Budget Units Unit Cost Budget 

Regular Hours 5,200 $35.00 $182,000 5,883 $35.95 $211,494

Overtime 10,400 $52.50 $546,000 10,545 $53.92 $568,586

Fuel 15,600 $3.60 $56,160 15,873 $3.94 $62,540

Equipment $20,800 $23,310

Total $804,960 $865,930

 Current Year Projected Amount 

Fund Budget Budget Proposed 

Parking Enforcement $123,000 $135,000 $137,000

Road Maintenance $1,305,000 $1,675,000 $1,700,000

Planned Special Events $804,960 $865,930 $875,000

Downtown Shuttle Program $189,000 $206,955 $208,000
70 

Chapter 6: Federal Funding for Planned Special Events 

The federal government’s role in providing funding for planned special events is generally 

limited to funding that addresses specific concerns, such as security or air quality. For the most 

part, this funding does not take the form of cost recovery, but rather is either appropriated by 

Congress or doled out as part of grants awarded by the Department of Homeland Security (DHS) 

or the Highway Trust Fund (HTF). 

A major portion of the DHS funding is provided for National Special Security Events (NSSE), and 

in particular, a large amount of funding has been appropriated for the last two cycles of 

presidential nominating conventions. In addition, some jurisdictions target other general 

transportation planning grant programs for funds to use for special events. For example, 

Congestion Mitigation and Air Quality (CMAQ) Improvement Program funds may be used to 

encourage public transit or bicycle use. 

National Special Security Events1

Major events that are considered to be nationally significant may be designated as National 

Special Security Events (NSSE). This designation is made by the President, or his representative, 

the Secretary of the Department of Homeland Security (DHS). From September 1998 through 

February 2008, there have been 28 events designated as NSSEs. A list of these events is 

provided in Exhibit 6.1. Some of these events have included presidential inaugurations, 

presidential nominating conventions, major sports events, and major international meetings. 

Most of these events involved planning, traffic management and congestion issues and 

therefore fit within the definition of a planned special event as used in this document. 

 

1

 A major portion of the discussion of National Special Security Events is taken from the Congressional Research Service Report to 

Congress, “National Special Security Events,” authored by Shawn Reese, Analyst in Emergency Management and Homeland Security, 

Government and Finance Division, Order Code RS22754, updated March 19, 2008. 
71 

On May 22, 1998, President William J. Clinton issued Presidential Decision Directive 62 (PDD 62), 

Protection Against Unconventional Threats to the Homeland and Americans Overseas.2 PDD 62 

established a framework for federal department and agency counter-terrorism programs, which 

addressed terrorist apprehension and prosecution, increased transportation security, enhanced 

emergency response, and enhanced cyber security. 

On December 19, 2000, Congress enacted P.L. 106-544, the Presidential Threat Protection Act of 

2000, and authorized the U.S. Secret Service (USSS), when directed by the President, to plan, 

coordinate, and implement security operations at special events of national significance. The 

special events were entitled National Special Security Events (NSSEs). Prior to the establishment 

of DHS in January 2003, the President determined what events of national significance were 

 

2

 Presidential Decision Directive 62 is classified. The White House issued a fact sheet abstract about it, and the Federation of

American Scientists has posted an “unclassified abstract” said to be “derived from” PDD 62, available at 

http://www.fas.org/irp/offdocs/pdd-62.htm. 

Exhibit 6.1 NSSE Designated Events— September 1998-January 2008 

Event Location Date 

World Energy Council Meeting Houston, TX Sep. 13-17, 1998 

NATO 50th Anniversary Celebration Washington, DC Apr. 23-25, 1999 

World Trade Organization Meeting Seattle, WA Nov. 29-Dec. 3, 1999 

State of the Union Address Washington, DC Jan. 27, 2000 

International Monetary Fund Spring Meeting Washington, DC Apr. 14-17, 2000 

International Naval Review (OpSail) New York, NY Jul. 3-9, 2000 

Republican National Convention Philadelphia, PA Jul. 29-Aug. 4, 2000 

Democratic National Convention Los Angeles, CA Aug. 14-16, 2000 

Presidential Inauguration Washington, DC Jan. 20, 2001 

Presidential Address to Congress Washington, DC Feb. 27, 2001 

United Nations General Assembly 56 New York, NY Nov. 10-16, 2001 

State of the Union Address Washington, DC Jan. 29, 2002 

Super Bowl XXXVI New Orleans, LA Feb. 3, 2002 

Winter Olympic Games Salt Lake City, UT Feb. 8-24, 2002 

Super Bowl XXXVII San Diego, CA Jan. 26, 2003 

State of the Union Address Washington, DC Jan. 20, 2004 

Super Bowl XXXVIII Houston, TX Feb. 1, 2004 

Sea Island G8 Summit Sea Island, GA Jun. 8-10, 2004 

President Reagan State Funeral Washington, DC Jun. 11, 2004 

Democratic National Convention Boston, MA Jul. 26-29, 2004 

Republican National Convention New York, NY Aug. 30-Sep. 2, 2004 

Presidential Inauguration Washington, DC Jan. 20, 2005 

State of the Union Address Washington, DC Feb. 2, 2005 

Super Bowl XXXIX Jacksonville, FL Feb. 6, 2005 

Super Bowl XL Detroit, MI Feb. 5, 2006 

President Ford State Funeral Washington, DC Jan. 3, 2007 

Super Bowl XLI Miami Gardens, FL Feb. 4, 2007 

State of the Union Address Washington, DC Jan. 28, 2008 
72 

designated as NSSEs. Since the establishment of the department, the DHS Secretary, as the 

President’s representative, has had the responsibility to designate NSSEs. NSSE designation 

factors include: 

• Anticipated attendance by U.S. officials and foreign dignitaries 

• Size of the event 

• Significance of the event 

State and Local Government Involvement 

When an event is designated an NSSE, USSS becomes the lead federal agency in developing, 

exercising, and implementing security operations. The goal of these security operations is to 

“develop and implement a seamless security plan that will create a safe and secure environment 

for the general public, event participants, Secret Service protectees, and other dignitaries.”3

The USSS’s Major Events Division (MED) is responsible for NSSE planning and coordinates with 

other USSS headquarters and field offices. Some of the coordination includes advance planning 

and liaison for venue and air space security, training, communications, and security 

credentialing. Additionally, MED coordinates and conducts liaisons with other federal, state, and 

local agencies—primarily law enforcement entities. 

NSSE security is planned, exercised, and implemented through a unified command model that is 

comprised of representatives of participating federal, state, and local agencies with NSSE 

responsibilities. During the NSSE’s planning phase, each participating agency is tasked according 

to their expertise or jurisdictional responsibility. USSS states that “with the support of hundreds 

of federal, state, and local law enforcement and public safety organizations, each of these 

events has successfully concluded without any major incidents.”4

NSSE operational plans include the use of physical infrastructure security fencing, barricades, 

special access accreditation badges, K-9 teams, and other security technologies. Specific teams 

and groupings of teams are designed for each event based on coordination with other federal 

entities, state and local jurisdictions, available local resources, and mutual aid agreements. 

Additionally, USSS sponsors training seminars for command-level federal, state, and local law 

enforcement and public safety officials to provide principles for managing security at major 

events and strategies for reducing vulnerabilities related to terrorism.5

 

3

 U.S. Department of Homeland Security, U.S. Secret Service, Office of Legislative Affairs, “National Special Security Events: Meeting 

the Counter-Terrorism Challenge,” Washington, 2006. This document is only available by contacting the U.S. Secret Service’s Office 

of Legislative Affairs. 

4

 U.S. Department of Homeland Security, U.S. Secret Service, Office of Legislative Affairs, “National Special Security Events: Meeting 

the Counter-Terrorism Challenge,” Washington, 2006. This document is only available by contacting the U.S. Secret Service’s Office 

of Legislative Affairs. 

5

 U.S. Department of Homeland Security, Office of the Press Secretary, “National Special Security Events Fact Sheet,” July 9, 2003, 

available at http://www.dhs.gov/xnews/releases/press_release_0207.shtm. 
73 

General NSSE Funding 

Even though NSSEs have been conducted since 1998, Congress has only appropriated funding 

specifically for a general NSSE fund since FY2006. According to the CRS report, federal funding 

for NSSE costs incurred by federal, state, and local entities is one issue that Congress may wish 

to address.6

 In FY2008, Congress appropriated $1 million for NSSE costs within the Secret 

Service. 

The CRS report also noted that the $1 million Congress has appropriated for NSSEs in FY2008 

may not be adequate to fund unexpected NSSE expenditures, such as the funeral of a former 

President. The amount appropriated could be additionally problematic considering that the 

Secret Service is not authorized to reimburse state and local law enforcement entities’ overtime 

costs associated with NSSEs. According to the CRS report, Congress might consider establishing a 

program within Secret Service that not only provides the agency with additional funds for 

unexpected NSSE security costs, but also authorizes the Secret Service to reimburse state and 

local law enforcement entities for security costs. 

Funding for Presidential Nominating Conventions 

Two sources of federal funds support different aspects of presidential nominating conventions. 

First, funds for convention operations come from the Presidential Election Campaign Fund 

(PECF), which provides financial assistance to publicly financed presidential candidates. Amounts 

in the PECF are determined by “checkoff” designations on individuals’ federal income tax 

returns. Federal law permitted the two major parties’ conventions to receive grants of $16.8 

million for the 2008 election cycle (an inflation-adjusted base amount of $4 million each).7

 These 

grants were awarded to the relevant party’s convention committee. Qualifying convention 

committees are not obligated to accept PECF funds, but doing so is standard practice. Third 

parties are eligible for limited public convention funds, but they rarely qualify. 

Federal law places relatively few restrictions on how PECF convention funds are spent, as long as 

purchases are lawful and are used to “defray expenses incurred with respect to a presidential 

nominating convention.” FEC regulations provide additional guidance on permissible and 

prohibited spending. Per FEC regulations, permissible PECF convention expenses include items 

such as: 

• “Preparing, maintaining, and dismantling” the convention site 

• Personnel and staff expenses (including bonuses) 

• Convention operations and planning 

• Security 

• Transportation 

• Certain entertainment 

• Administrative items (e.g., office supplies) 

• Gifts for convention staff or volunteers, limited to $150/person or $20,000 total 

 

6

 Congressional Research Service Report to Congress, “National Special Security Events,” authored by Shawn Reese, Analyst in 

Emergency Management and Homeland Security, Government and Finance Division, Order Code RS22754, updated March 19, 2008. 7

 PECF data appears in U.S. Treasury Department, Financial Management Service, “Disbursements From the Presidential Election 

Campaign Fund and Related Payments,” July 31, 2008. 
74 

• Production of candidate biographical films 

• Investment of PECF funds if the profits are to be used to defray convention costs 

Several of these costs could be considered part of the recoverable costs of a planned special 

event. 

The second source of federal convention funds come through the Office of Justice Programs 

(OJP), within the Department of Justice (DOJ). This OJP funding has only been available in 

FY2004 and FY2008. In 2004, Congress appropriated $100 million, through DOJ, for the 

Democratic and Republican presidential nominating conventions in Boston and New York City.8

More recently, Congress appropriated $100 million for the Democratic and Republican 

presidential nominating convention security in Denver and Minneapolis-St. Paul, respectively.9

In 2008, the $100 million is to be administered through OJP’s Edward Byrne Memorial State and 

Local Law Enforcement Assistance Programs. According to the CRS report, DOJ uses most of this 

funding to reimburse state and local law enforcement entities for overtime costs associated 

with convention security.10

DHS Security Funding Grants 

State and local jurisdictions can use DHS grants, such as the State Homeland Security Grant 

Program (SHSGP) and the Urban Area Security Initiative (UASI), for security activities, including 

planned special events. The grant approval process for these programs is not flexible, and states 

and localities would need to plan funding annually in their grant applications. For unexpected 

NSSEs, which may be the result of an unexpected death of a President or a change in location of 

a planned event, states and localities are unable to plan in advance for these grants. DHS does 

authorize states and localities to reprogram SHSGP and UASI funding with the DHS Secretary’s 

approval; however, that may result in states and localities not funding other planned homeland 

security activities. 

The Homeland Security Grant Program Guidance and Application Kit has an appendix that 

provides additional information on allowable expenses for planning training and exercise 

activities under the heading “Special Event Planning.” This section describes how states or urban 

areas hosting an upcoming special event can use federal funding to finance training and exercise 

activities in preparation for that event. The Kit notes that: 

“If a State or Urban Area will be hosting an upcoming special event (e.g., Super Bowl, 

G-8 Summit); they anticipate participating in a Tier 2 National-Level Exercise as defined 

by the National Exercise Program Implementation Plan (NEP I-Plan); or they anticipate 

that they will apply to be a venue for a Tier 1 National-Level Exercise, as defined by the 

I-Plan, they should plan to use SHSP or UASI funding to finance training and exercise 

activities in preparation for that event. States and Urban Areas should also consider 

exercises at major venues (e.g., arenas, convention centers) that focus on evacuations, 

 

8

 In P.L. 108-287, An Act Making Appropriations for the Department of Defense for the Fiscal Year Ending September 30, 2005, and

For Other Purposes, Sec. 11002, Congress appropriated $25 million for Boston and $25 million for New York City presidential 

nominating convention security. In P.L. 108-199, An Act Making Appropriations for Agriculture, Rural Development, Food and Drug

Administration, and Related Agencies for the Fiscal Year Ending September 30, 2004, and For Other Purposes, Sec. 103, Congress 

appropriated an additional $50 million for the 2004 presidential nominating conventions. 9

 P.L. 110-161, Div. B, Title II. 

10 U.S. Department of Homeland Security, U.S. Secret Service, Office of Legislative Affairs, Anthony Lawrence, conversation with the 

author on August 9, 2007. 
75 

communications, and command and control. States should also anticipate 

participating in at least one Regional Exercise annually. States must include all 

confirmed or planned special events in the Multi-year Training and Exercise Plan.”11

In summary, these DHS grant programs are only for specific types of events, generally only 

cover security related costs, and must be applied for in advance. 

Funding From General Transportation Planning Sources 

Funds from the Congestion Mitigation and Air Quality (CMAQ) 

Improvement Program, often referred to as the “funding arm” 

of the Clean Air Act, are available “for surface transportation 

and other related projects that contribute to air quality 

improvements and reduce congestion.”12 CMAQ funds can be 

used for certain congestion mitigating activities performed as 

part of special event planning. These funds are a good option 

for cost-recovering certain transit planning expenses, an 

activity which is rarely billed directly to event organizers since 

it is part of the planning rather than the operations phase. 

Programs that promote bicycling and walking as a means of 

transportation are also eligible for CMAQ finds. Eligible bicycle 

programs “may include the creation of trails, storage facilities, 

and marketing efforts designed to support bicycles as a form 

of transportation.” 13 Special event transportation planning is 

often spread between multiple departments and agencies. 

Funds for CMAQ may support an office that, for example, 

promotes alternative transportation to work in addition to 

promoting alternative transportation for planned special 

events. 

CMAQ funds require a state or local match, typically 20 

percent of the proposed project expense. CMAQ funding 

consists of a basic authorization which is based on population 

and EPA's severity classification for ozone and carbon 

monoxide air pollution and distributed at the state level. For 

each state, this basic authorization is guaranteed to be a minimum of 90.5 percent of the funds 

that are paid into the Highway Trust Fund (HTF). Funds are apportioned to State DOTs on an 

annual basis and remain available for four years, during which they may be "obligated" or 

dedicated, to specific CMAQ projects. However, CMAQ funds are only released as 

reimbursement payments for completed work, and unused funds lapse at the end of the four 

year availability period. After four years, these funds are no longer available for use by the 

state.14 

 

11 U.S. Department Of Homeland Security, Fiscal Year 2008 Homeland Security Grant Program Guidance and Application Kit, 

February 2008, p. C-9. 

12 http://www.fhwa.dot.gov/environment/cmaqpgs/ 

13 http://www.fhwa.dot.gov/environment/cmaqpgs/ 

14 http://www.fhwa.dot.gov/environment/cmaqpgs/ 

The Washington, D.C. 

Transportation Policy and 

Planning Administration, a part 

of DDOT, uses CMAQ funds to 

promote bicycling, walking, 

and public transit options for 

planned special events. The 

Administration collaborates 

with event organizers to aid 

them in advertising and 

offering alternative methods 

of transportation. The city also 

maintains a website, 

goDcgo.com, which has 

information on upcoming 

special events and provides 

detailed maps, including bike 

trails and bus/rail routes, to 

aid event attendees.
76 

Glossary

Activity-Based Costing–A method of allocating indirect costs in which the cost of resources 

consumed is assigned to the activity consuming the resource. 

Asset Management–The practice of taking a comprehensive view of the entire portfolio of resources 

available in order to achieve system-wide agency goals at optimal cost benefit. This includes the 

ability to show how, when, and why resources were committed. 

Cost Analysis–The gathering of various cost tracking information to prepare reports which can be 

reviewed to determine the nature and relationship of the cost elements. 

Cost Driver–The activity that is the best indicator of cost. 

Cost Management–Effective, overarching control of an organization’s finances across multiple 

stages. 

Cost Objective–A cost objective, also called the cost object or cost target, is the good or service 

being provided. All costs should be assigned to cost objectives. Costs are allocated to the cost 

objectives that benefit most from incurring the cost. 

Cost Planning–Activities such as cost estimating, forecasting, and budgeting. 

Cost Recovery–Charging users of a service for that service, rather than the organization absorbing 

the cost. 

Cost Tracking–Following the costs of various activities through the cost management system, relying 

upon the use of discrete coding of activities and their associated costs. Discrete coding includes 

methods such as time collection (the use of personnel time sheets) and expense accumulation. 

Direct Costs–Costs that are directly linked to a specific service, activity, or department. Direct costs 

can be identified specifically with a particular final cost objective. 

Fixed Cost–Costs that do not vary with increases and decreases in activity. 

Indirect Costs–Costs that are not directly linked to a specific service, activity or department. Indirect 

costs are incurred for a common or joint purpose and may either benefit more than one cost 

objective or not be readily assignable to the cost objectives specifically benefited without effort 

disproportionate to the results achieved. 

Mixed or Semi Variable Cost–Costs that contain both a variable cost element and a fixed cost 

element. These costs may vary incrementally with increases and decreases in activity. 

Resource Utilization– Examining resources to ensure optimal allocation. Restructuring shifts so that 

police work fewer overtime hours is an example of resource utilization. 

Variable Costs–Costs that vary with increases and decreases in activity. 

Cost Pool- The accumulation of costs whose total is allocated using one allocation base, such as a 

cost driver. 
77 

Page Intentionally Left Blank
Planned Special Events: 

Cost Management and Cost Recovery Primer 

U.S. Department of Transportation 

Federal Highway Administration 

Office of Operations 

1200 New Jersey Ave., SE 

Washington, DC 20590 

Toll-Free "Help Line" 866-367-7487 

Publication number: FHWA-HOP-09-028