If the city was a commercial consulting company, provide advice and guidance, and facilitating other businesses to achieve their goals, no one would bat an ey lid at the consultants being appropriately compensated. It's more than likely that most if not all the events the city holds will employ or pay some sort of commercial organization for professional services to make their event a success.
Why shouldn't the city be treated the same way? The city and it's staff are not a charity or an obstruction, the city are the guardians of the roads, streets and parks on whom the event organizers depend.
The city has passed the point where it needs more events.Most existing events can afford to pay for the services provided by the city, upfront. Those that can't raise the question why? If they are so poorly managed, or scraping by on such a small budget that they cannot afford to pay for the requisite services. If the event folds due to the cost of city services, it would like fail anyway and will be replaced by another event.
For first year, and (small) charity events, consideration can be given to allow them to pay in arrears. All events though must pay for their services for year-1 or the prior year, before being able to apply for permits or reserve facilities for a follow-up event.
A 2nd consideration would be to have tiered charges, but there should be no "free" events. While many events are for noble causes, and many Austin Residents either participate or are recipients from the events, expecting the city to provide services to these events is not sustainable, especially where they are paying for other commercial services, or unprofitable. If they can't be, other events can.