Sound of Music needs a short term loan - could be as much as $125,000

By Pepper Parr

June 11th, 2024

BURLINGTON, ON

 

A full day for City Council.  Not only will they handle an agenda that has some major items – there will also be a Special Meeting of Council during which the Sound of Music people will be before Council  with their tin cup – looking for a short term loan – they have run out of money and need some cash in the bank to cover operating costs until revenue from events comes in.

This was a desperate close to last minute request.

Items to be considered at the Special Meeting of Council: 6.1 Sound of Music Festival – 2024 Loan Request (RCC-14-24) 1 – 4 Approve a short-term loan to Sound of Music Inc. in the upset amount of $125,000 to support cash flow requirements for the 2024 Sound of Music Festival.

Huge crowds – but no cash

Sound of Music Inc. (SOM) is a non-profit organization that has been bringing people to the City of Burlington’s waterfront to celebrate live music for over 40 years. They host the Sound of Music Festival each June. This event is made possible by the support of local levels of government, sponsors, and volunteers. The event provides cultural and community value to Burlington, while also providing a strong economic impact to local businesses.

SOM has had challenges in past years including but not limited to pandemic recovery, shift to a more sustainable event model including a new paid event and overall turnover in staff and their Board of Directors (BOD).

The current BOD is working diligently to ensure that this year’s event is a success. SOM is estimating a revenue neutral budget for 2024 and is optimistic about its projected merchandise and food and beverage profit from the event. As is the case with many outdoor events, weather is a critical success factor. Due to a grant application that went in late, mainly attributed to the various changes in personnel, SOM is 3 weeks late for funding approval.

Many vendors require upfront payment and thus creating a cash flow issue for the festival and as such, SOM is requesting a short-term loan from the City of Burlington to cover various pre-festival expenses.

Strategy/process/risk
The recommendation is for the City to provide a short-term loan in the upset amount of $125,000 to the SOM to help with their immediate cash flow situation. This option will not affect the operating budget but would result in a loan receivable on the City’s books from SOM. The loan would be repayable within a 6-month period.

In addition, City staff, coordinated through the Festival and Events team are providing some additional support to SOM for this year’s festival. Staff will be reporting back in the fall of 2024 to re-cap the event, summarize the in-kind and other support provided by the City as well as discuss sustainability options for the festival.

Financial Matters:
The City’s annual operating budget provides a grant to support the SOM festival. For 2024 this grant was $150,000. On a typical year, the City provides additional “in-kind” support, such as;

 Event logistical support (this support is enhanced for the 2024 festival).
 RPF and Transportation staff time and resources used for planning and the management of multiple road closures throughout the event.
 ITS provides WiFi access through the City’s provider.
 The use of Central Park field for SOM parade staging.
 Additional power used in Spencer Smith Park for the event.

Other City fees associated with the events, such as permits and licenses, are billed directly to SOM.

The Gazette has information regarding the flow of funds from the Sound of Music to an individual we cannot name at this point.  There appear to be some significant failures in how the financial side of the Sound of Music is being handled.

Is this the beginning of the end of Sound of Music as a signature event for Burlington?

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3 comments to Sound of Music needs a short term loan – could be as much as $125,000

  • Michael Hribljan

    We are a city not a bank, good grief, they need to get their act together. Making advance payments is not new, this festival has been going on for several decades.

  • Joe Gaetan

    Follow the bread crumbs left by Burlington Green and the Chamber of Commerce. The taxpayer cupboard will soon be bare.

  • Grahame

    They need for find a way to gain more income from Sound of Music.The days of a free four day event are over.

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