More on AC cost in San Francisco

Fundraising to help offset city costs for hosting the America’s Cup regatta has fallen well short of targets to reach $32 million in three years, but the city’s costs are also projected to be considerably less, fueling debate Wednesday about what the event will mean for San Francisco’s bottom line.

City staff projects the cost to taxpayers for putting on the races, like increased police, Muni and ambulance services, will be about $22.5 million. That’s notably less than the $40 million to $52million in costs projected a little over a year ago.

But fundraising has also lagged, with only about $14 million raised in either cash or pledges, according to the city controller. About $3 million has gone to related commitments, and almost $2.7 million to operating expenses for the group of civic leaders leading the fundraising effort. Almost $1.6 million of city costs incurred to date have not been paid.

The America’s Cup Organizing Committee, the civic fundraising group, has reimbursed the city for $6.8 million of its expenses, city documents show. If revenue from hotel, payroll and retail taxes linked to the event hits the $13 million projection, that leaves will leave a $2.7million shortfall in city coffers, according to a report from Michael Martin, the city’s America’s Cup project director. He made the presentation Wednesday to the Board of Supervisor’s’ Budget and Finance Committee.

Supervisor John Avalos, though, questioned the use of applying increased tax revenue from the event toward the city’s general fund costs.

“That, to me, was not what the intent was originally,” Avalos said, adding later: “The intent was to (have) $32 million to cover the city’s costs.”

Mark Buell, head of the America’s Cup Organizing Committee, agreed.

“Supervisors, I would not disagree with you that that was clearly the intent going forward” after the host agreement was signed in 2010, Buell said.

But city documents show applying tax revenue was contemplated for more than a year.

A February 2012 report by board Budget and Legislative Analyst Harvey Rose projected city costs for hosting the event at almost $52 million. With $32 million from the America’s Cup Organizing Committee and $22 million from estimated event-related tax receipts, Rose’s report projected the city would have a $2.2 million surplus from the event. If the organizing committee raised only $8 million, the amount it had at the time, the city would have a $22 million deficit, the report noted.

Separate February 2012 documents from the city’s economic development office also applied increased hotel and other tax revenue to the city’s hosting costs. That analysis projected a surplus of $7.7 million to $8.5 million at the end of the day if the organizing committee raised the full $32 million.

It may prove a tough sell, though, trying to convince private donors to contribute to city costs if the money is simply adding to the city’s profit line.

How much in private funds can be raised and whether the projected tax revenues materialize are central questions.

“I want to make sure our general fund doesn’t get hit,” Supervisor Eric Mar said.

With Mayor Ed Lee making his pitch to various CEOs over breakfasts in recent weeks, and other fundraising efforts, some were confident the city would be made whole.

“The bottom line here is we’re going to have an event that in all likelihood is going to cost zero dollars to our general fund,” while generating $900 million of economic activity and the chance to “showcase our city in an international spotlight,” said Supervisor Mark Farrell.