The Lilac Festival is facing a financial challenge.

Organizers say they're near the breaking point because of soaring fees imposed by the city.

Every May, thousands of Calgarians descend on 4 Street S.W. for the Lilac Festival.

The one-day street festival features vendors and entertainers.

"There's great food and culture to experience. It's just a great time to go out with your family and friends," says Orry Fidler, a fan of the festival.

The festival may be fun for the public but it is becoming too costly for organizers.

"Now with increasing city fees and lower sponsorship dollars, it puts us in a difficult situation financially," says Jennifer Rempel from the 4 Street Business Revitalization Zone (BRZ).

The BRZ has to pay fees for road closures, monitors and police officers. In 2005, those costs totaled $3,300. In 2008, those costs totaled $50,000.

The City of Calgary says the price tag for the Lilac Festival has increased because the festival has grown and needs more resources to support the event.

Aldreman Ric McIver says festivals are important for the city and it may be time to help subsidize them. "We may have to put something in the budget for it. But either way, we need to be a festival friendly city," says McIver.

Organizers of the festival say they will never charge admission to the event. But, for the first time ever, they will be collecting donations.

They also say the soaring costs may force them to reduce the size of the festival in coming years.