24 comments on “Black Rock Beacon – Swamp Edition

  1. Just happened to see this now. Always good to show exactly where you get your info from in these cases.

    I was quoting the stipulations attached to the permit on the BLM website here:

    https://www.blm.gov/epl-front-office/projects/nepa/39776/49115/53424/CD_Signed_BRC_2014_Stips_(1).pdf

    If you download the PDF and scroll down to stipulation #34, you’ll see it said that “The fee, as set by regulation 43 C.F.R 2930 will be equal to 3% of the ADJUSTED gross income derived from the use authorized under the SRP.”

    On first glance, especially since subsequent references talk about gross receipts, you might think this the adjustment is inconsequential. But the real-life BLM guy who I spoke to by phone sold me specifically that it could include materials and travel costs. So, it’s somewhere between gross revenue and net income.

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    • No Mitch. As burnersxxx stated ‘It’s 3% of net revenue ($900k) + costs. BLM Costs I expect are in the order of $1-2m as they have been in previous years’.

      Mitch, you conversed with the BLM, by phone, in regards towards the levies paid, as ‘usage fees’, by the BRC LLC, towards the BLM, but, you did not publish the number that I am of the belief that you were told. What is the rationale of you not publishing the number, the number did not match the rubbish $4.5 million cool aid number, published by the BMOrg, and published by you, in regards towards your article upon ‘The Mysteries of the BMOrg Budget’? What is the number that I am of the belief you were told? The BRC LLC paid the the cost recovery payment levies, for 2014, within the week of prior to you penning your article within the Black Rock Beacon, the BLM guy knew the number. My estimate of the number, of the usage fees paid towards the BLM, is near to $2.3 million, of which, $0.9 million is of the ‘commercial use fee’, and $1.4 million is of the ‘cost recovery payment’. How near is my estimate?

      FEE SCHEDULE

      34. The BLM shall collect a commercial use fee from BRC for the use of public lands for the event. The fee, as set by regulation 54 C.F.R. 2930, will be equal to 3% of the adjusted gross income derived from the use authorized under the SRP. Payment equal to at least 25% of the estimated commercial use fee (3% of estimated gross receipts) must be received by the BLM prior to the start of the event. Determination of gross income will be based on all payments received by BRC and its employees or agents for goods or services provided in connection with commercial activities authorized by the SRP. This includes, but is not limited to, ticket sales, coffee and ice sales, fees associated with outside services and private donations received by management of the event on public lands.

      The following schedule for payments will be used:
      Payment Due date Amount Due
      1. 10 days after permit issued by the BLM 25% of estimated commercial use fees
      2. January 31, 2015 The remaining balance of commercial use fees

      36. BRC is responsible for the cost recovery payment, consisting of the actual costs of administering the Special Recreation Permit, including all direct and indirect costs, in addition to the commercial use fees. BRC must sign a Cost Recovery Agreement (CRA) within 10 days of the issuance of the permit. 100% of the cost recovery fee estimate shall be received prior to the start of the event as provided in the 2014 CRA.

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      • it would be great if Mitch could get this answered for us. I’ve been emailing and voicemailing Gene Seidlitz for more than a week now. At first he said he would answer my questions, and now, silence. Hmmm…perhaps he didn’t like my accent. 🙂
        My questions were pretty basic:
        1. Did the BLM charge Burning Man $4.5 million in 2013, or less? If less, what was the amount?
        2. Did the BLM increase charges to Burning Man between 2012 and 2013?
        3. Do the BLM do anything to enforce the Vehicle Pass restrictions, or was this something Burning Man came up with?

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        • Kudos, burnersxxx, wow. I was of the hope of a fresh reporter querying the BLM as to the levies paid by Burning Man, within 2013, and within 2014, and of the rationale of the levies.

          Whatever might be the response to the query, of if the BLM levies are solely a tad over $2 million each burn, or, might the $4.5 million number be real, and, thusly, the rationale of the increase of the ’36 cost recovery fee’ from near $1 million within 2012, to near $3.5 million within 2013, there is a story behind the number.

          Kudos.

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      • I think you are spot on with your estimate. If we were having a sweepstakes, I would say $2.5m, just for the sake of a bet. This would allow for some of Pershing’s costs to have been transferred across to the BLM with the new Sheriff/Feds integration (because they appeared to drop, even though the law suit was settled in their favor). Which gives us a $2m royalties estimate to Decommodification. https://burners.me/2014/08/12/where-does-your-ticket-money-go/

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        • ABP: If BLM had told me a number, I would have written about it. What the spokesman (not Gene Seidlitz, btw), told me was that that the phrase “adjusted gross income” meant that they took the total revenue received and adjusted it for specific costs, of which he named two: travel and materials. He wouldn’t go beyond that except to say that the BLM learned new things every year and that whatever they charged was consistent with a specific chapter of the Code of Federal Regulations (sorry, I’m at work now, notes are at home, but I think it’s under 2930). He also said it varied widely from year to year.

          I don’t know where you guys are seeing “net revenue.” What he described might be gross income (sales minus cost of sales) but I’m just going by the passage in Stipulation 34. There are two calculations involved:

          1. The total fee is 3% of *adjusted* gross income.

          2. The downpayment on the fee is 25% of 3% of estimated *gross receipts.*

          Note the subtle difference, it’s like paying tax for three quarters based on your estimated sales and then doing a firm calculation for the fourth quarter.

          I agree with Burnersxxx that stipulation 36 is a second fee paid to BLM to reimburse its actual costs. I’m confused about how much Bmorg is paying directly to Pershing on top of this (here’s an article that says Pershing will get $240,000 a year: http://www.nbcbayarea.com/entertainment/entertainment-news/Burning-Man-Lawsuit-Extinguished–231568061.html )

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          • Apologies, Mitch, for being of the belief of the BLM stated the number to you. As burnersxxx stated ‘it would be great if Mitch could get this answered for us’.

            The ’34 commercial use fee’ is near to 3% of gross revenue, whether it be termed adjusted gross income, or estimated gross receipts, or gross income, it is near to $900,000, 3% of near to $30 million, it does not ‘vary widely year to year’, it is not ‘net income’, and it is not ‘sales minus cost of sales’.

            The query is in regards towards ’36 cost recovery fee’, is it the $3.6 million of the $4.5 million ‘BLM usage fee’ number within 2013, or is it solely a tad over $1 million?

            The levies paid towards Pershing County are of no matter in this query, they are upon a separate ledger line within the afterburn reports.

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          • ABP: How do you know the following?

            1.The ’34 commercial use fee’ is near to 3% of gross revenue, whether it be termed adjusted gross income, or estimated gross receipts, or gross income, it is near to $900,000, 3% of near to $30 million, it does not ‘vary widely year to year’, it is not ‘net income’, and it is not ‘sales minus cost of sales’.

            2. The levies paid towards Pershing County are of no matter in this query, they are upon a separate ledger line within the afterburn reports.

            For the first one, I asked the BLM, that’s what they told me. Why would they lie? (The person I talked to was familiar with the data). And why would they call it “adjusted” if it wasn’t?

            For the second, I’m confused by the fluctuations in several of the budget categories, and I wouldn’t be surprised if Bmorg was moving things around, which would have the effect of making the accounting opaque, whether they indend it or not.

            For example, you might think that the Pershing fees are under “Local Agencies,” but then why did that go DOWN in 2013, to $300,000, when Bmorg said it paid $400,000 to Pershing and its schools (latter in a different category but that also went down) and that the county was asking for $600,000 for 2013. The only category I can see that could include that, other than the BLM/Usage fees line, is Tax and Licenses . But they could also be moving Pershing payments into (or out of) other categories, such as Fire Safety; Fees, Permits, and Royalties; Outside Services; and Computers, Electronics, and Radios (I believe Pershing wanted BRC to pay for the communications system). So I’m curious to know which ledger line you think all of the Pershing fees are on and why they are there.

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          • burnersxxx: If the fall in local agencies is accounted for solely by a $300 million shift of law enforcement expenses to the BLM line, then why did Tax and Licenses go up by $866.9 million?

            The stipulations take precedence over the permit. Plus, the BLM guy TOLD me that it was adjusted. I mean, unless you think I made that up.

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          • because of licenses to Decommodification, LLC for the trademarks, intellectual property, royalties from DVDs and movie soundtracks, etc. I can’t think of any other reason. Seriously, I’ve considered it A LOT.

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          • burnersxxx: Thing is, if they’re pulling some money out as royalties, why not pull it all out that way? The taxes are MUCH lower than on earned income. To take some of it out of the usage fees and possibly some of it as salaries doesn’t make sense from a tax standpoint, and presumably, once the not-for-profit starts showing its figures, it’ll be fairly easy to calculate what’s been leaving the house.

            Pursuing the BLM by back and side doors for now.

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          • Decommodification won’t be showing it’s figures. It gets paid from BRC LLC, which only gives us the unaudited and incomplete Afterburn. Any profit from BRC will be donated to BMP, I doubt we will see more information than a line item for contributions.
            Donating Decommodification LLC to BMP in a few years, might get them some significant tax deductions they could use to offset a big gain. That is, if they can accumulate a few years of profit in Decom so that giving it away to a non-profit is worth something.
            Was involved in recent years with a non-profit where someone had donated them a boat to get a tax write-off. This seems like it could be a similar style of transaction.

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          • I think settling the lawsuit and integrating operations of Pershing/Feds is what led to some of the costs being shifted out of that item and into BLM and Other. I can’t see why it would be more than a couple of hundred grand though, ie difference between 2013 and 2012 $313k. Bringing it to $2,181,367, leaving $2,341,585 of “other” usage fees. Plus a large increase in licensing. There’s your Decommodification, right there.

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          • Wow, I was of the hope of a newbie reporter might be interested in penning a story. Kudos, Mitch, upon ‘Pursuing the BLM by back and side doors for now’.

            I am not of the belief that tax levies are of much matter to them. They donated the BRC LLC towards the Burning Man Project, within 2013, for a big deduction upon their tax levies, perchance, 1x or 1.5x of their sales? That is the rationale of the Burning Man Project being a 501(c)3, the rationale is not to promote the PLUR Tin Principles(TM) around the globe. In addendum, my mate states to me that Decommodification LLC is a ‘pass through entity’ in regards of trademarks and images licence fees, something in regards of all cash directed towards them, they pay towards the 6 prior BRC LLC owners, thus Decommodification LLC does not pay tax levies. The $6 million of cash they paid towards lawyers and accountants obtained brilliant advice.

            The magick query, upon the Department of Interior BLM website, prior of their servers forbidding access, is ‘how might I obtain this information within a U.S. Freedom of Information Act request, which document might I need to request?’ The direction, from the ministry of the Department of the Interior, towards their employees, is to provide the information prior of the necessity of a U.S. Freedom of Information Act request. It should not need to get to this level.

            The culture of rural Nevada is, they do not term it a lie, they term it ‘bullshitting’.

            Here is an awesome post, Burning Man took 10 per cent licence upon all images within 2002. I feel hoodwinked upon drinking the grape cool aid prior to 2013. With Spark, a Burning Man Story, upon Netflix, Showtime, and others, I will update the BMOrg cash out post this weekend, estimating $1 million to $3 million each year for licence of images, from the founding of Decommodification LLC. Edited by a mate, ha.

            I now know my art project for 2015, Larry will like it as much as he likes my comments.

            burnersxxx, please do not respond to this comment, perchance, I might have consumed a Scotch or two, and I do not desire to consume your time.

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          • Apologies in regards of the tone of the prior comment, wake up in the morning, and regret the night before. The Department of the Interior servers were down for repair, and, I should not have made a statement in regards of an art project.

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    • I just got a response from the BLM. Will probably do a more detailed post on this later, I have some big news to break. ABP you might want to include this in your follow-up.
      Costs went up to $2.8m
      plus 3% revenue shar $685k

      Note at 3% BM’s on-Playa revenues were $22,833,333.

      looks like maybe $1m of “Other” went somewhere…

      _________
      from Gene Seidlitz, BLM:

      Burning Man is required to pay fees and costs to the Bureau of Land Management (BLM) as part of a Special Recreation Permit (SRP) issued by BLM to Burning Man each year. Fees are set by Congress and are currently 3% of revenue related to the SRP. For Burning Man this includes 3% of ticket sales, ice & coffee sales and other miscellaneous revenue. The funds go toward BLM’s overall program management within the Winnemucca District with a priority in the Black Rock Field Office.

      Burning Man also reimburses (cost recovery) BLM for all reasonable and justifiable costs related to BLM’s administration of the SRP. Processing includes, but not be limited to, the following: coordination, administration and approval of any necessary NEPA compliance; consultation with appropriate Federal, State, Tribal, and local officials; preparation of the administrative record and resolving any protests, appeals and litigation that might result from the proposal, preparation of all decisions and authorizations resulting from those decisions, monitoring the construction, operation and termination of any resultant authorization; and other necessary processing actions consistent with a final decision.

      In 2012 BLM did a comprehensive analysis of the 2011 operations after the event and determined the BLM needed and would enhance the BLM planning and implementation in 2013 to ensure public health and safety for an event of 70,000 participants in a remote environment was adequately addressed. As a result BLM’s costs increased from $1.2 million to $2.8 million that year. This was the largest jump in BLM’s costs in the history of Burning Man. Before and since the cost increases have been more incremental and were the result to inflation, growth of the event, etc.

      1. Did the BLM charge Burning Man $4.5 million in 2013, or less? If less, what was the amount?

      BLM charged BRC approximately $2.8 M for costs and approximately $685,000 were the 3% revenue for 2013

      2. Did the BLM increase charges to Burning Man between 2012 and 2013?

      Yes, see above.

      3. Did the BLM do anything to enforce the Vehicle Pass restrictions, or was this something Burning Man came up with?

      BRC instituted the vehicle pass program. This was not something that BLM enforced.

      Again, sorry for the delay in your request. Take Care

      Cheers

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      • Wow, kudos for pursuing it, and kudos to Gene Seidlitz for responding honourably, and big kudos to Mitch for querying the BLM.

        Comments,

        I do not know whether the 2013 permit required the BRC LLC to pay the 3% ‘fee on outside services’, as was required within the 2014 permit. The 41 vendors, likely, paid their own 3% fee, within their permits with the BLM, and, I do not know the meaning of ‘outside services’. And, ‘BRC instituted the vehicle pass program. This was not something that BLM enforced.’ but the vehicle pass program was likely in due of a BRC proposal, within a negotiation, to sell a higher number of tickets.

        Perchance, the adjustment of ‘adjusted gross income’ subtracted the ‘BLM cost recovery fee’, that might be what was stated to Mitch, the ’36 BLM cost recovery fee’ varied widely. By appearances, the numbers are rational in that manner, $22,833,333 +$2.8 million equals 2013 tickets + ice + coffee?

        Kudos. I’ll update the cash out post this weekend.

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  2. Pingback: The Shroom: Caravansary Edition | Burners.Me: Me, Burners and The Man

  3. I was penning a long comment in regards to the false statements upon the payments towards the BLM, within the PR article by Mitch, but, in due of the horrible news today, I do not desire to do so.

    The permit, with the BLM, is upon the Burning Man website, any person might view the permit. The permit states 3 per cent of all revenue, as a ‘usage fee’, in addendum to a ‘cost recovery fee’, for the BLM and their police, is to be paid from the BRC LLC, Burning Man, to the BLM. By appearances, a reporter queried the BLM as to the levies paid towards the BLM within 2013 and, within 2014, which was paid in the prior week. We might gain this knowledge shortly.

    My gf, whom, in addendum, is not at the awesome burn in due of my penning of the BMOrg cash out post, states ‘when you are in a hole, stop digging’. Listen to your sole professional PR person, perchance, she is stating the same. The BRC LLC is owned by the 501(c) non profit Burning Man Project, with near the same people in control. Real financials, perchance, might not be required to be released, by the Project, prior to 2016, but false PR statements, in regards of the cash directed towards the pockets of the people in control are not permitted, in due of the Project being a bloody 501(c)3.

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