I wouldn't do it for free. You could throw this yourself and charge good money for it. However, if you still wish to help your city, and I understand why you might feel sympathetic, then I'd have the powers that be pay you a fee. Charging a fee, even if it's nominal, will help cover the operating expenses for this event and you will have expenses even if it's just electricity and dealing with the cleanup afterwards. Charging a fee also creates a sense of community buy-in, which means they'll be more invested in making sure everything goes well.
For what it's worth, I think it's incredible that you're thinking of others and just trying to do something positive for your community. But if it's not open to everyone, and it isn't since they want groups of 10, then whom are you really helping? I'd be aggravated if it was a party for wealthier folks and their kids. It's happened to me. It's usually presented as an event to thank the people of the community who have done X thing or donated Y amount or sponsored Z team and it all sounds great, but after volunteering to help I've gotten there and it's usually business people being thanked who don't need my help. It wasn't a great feeling.