Planned Special Events: Cost Management and Cost Recovery Primer
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.
|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|
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 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
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
- Certain entertainment
- Administrative items (e.g., office supplies)
- Gifts for convention staff or volunteers, limited to $150/person or $20,000 total
- 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, 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
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.
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
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.
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.
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.
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.
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.
11 U.S. Department Of Homeland Security, Fiscal Year 2008 Homeland Security Grant Program Guidance and Application Kit, February 2008, p. C-9.