OCEAN CITY — Resort officials this week began exploring possible tweaks to the town’s discount policy for certain non-profit organization’s special events that utilize public space in the resort.
During a Recreation Committee meeting on Tuesday, Special Events Director Frank Miller briefed members on proposed revisions to the town’s discount policy for special events put on by non-profit organizations. Under the current policy, certain non-profits based in Worcester County are offered deep discounts of as much as 75 percent for the use of sections of the beach, the Boardwalk or the Inlet lot, for example.
Miller was careful to point out the discount is only applied to the application fees and the space usage fees and not labor and equipment provided by the town, which have tangible costs associated with them. For example, if a certain event needed three extra Ocean City Police Department officers, there would no discount on the cost of providing that labor.
However, the debate on tweaking the discount for non-profit special events was borne out of a discussion earlier this year at the Mayor and Council level. During a review of one special event, the council learned the space usage fee for a full block of Ocean City beach was just $250 for a locally based non-profit. When the 75 percent discount was applied, a qualifying non-profit could essentially reserve a full block of prime beach real estate for around $62 for a special event.
“When you start at $250 for a block of beach and then you offer the 75-percent discount, it becomes pretty nominal,” he said. “There seems like there is room here to adjust some of those fees, especially for the non-profits that don’t directly benefit Worcester County and Ocean City residents.
Miller said the criteria could be adjusted to limit the discount to those non-profits that serve the residents and visitors of the resort area.
“It would be limited to non-profits located in Ocean City’s county election district, or basically just the island itself,” he said. “It would eliminate all of West Ocean City, for example, but I’m not sure that’s the direction we want to go.”
Miller said a distinction used when determining a non-profit’s eligibility for the discount is the type of status they hold. For example, a 501c3 non-profit is defined as a charitable organization that serves some public need such as feeding the poor or providing for the impoverished or guiding troubled teens. A separate 501c6 status is reserved for those organizations that essentially just serve their own needs, such as professional membership clubs, trade organizations of sports leagues, for example.
“Right now, the only thing we look for is if they are a non-profit,” he said. “We haven’t added that level of depth yet. One criterion could be determining if the non-profit actually benefits Ocean City and Worcester County. Some of the 501c6 non-profits just serve the needs of the group.”
Miller said there he had researched three basic options for revising the town’s discount policy for special events. The first option would apply the 75 percent discount to those non-profits on the island only and use the election district as criteria. He said that option could have the reverse effect of eliminating many worthy non-profits whose work benefits the county and Ocean City.
The second option offer a scaled fee structure based on the size and footprint of a special event and perhaps more importantly, its overall economic benefit to the resort in terms of putting heads in beds. Naturally, some events bring more people to Ocean City than others and option 2 would look at amount of space used, the number of days of the event and the size of the event using the existing return on investment criteria.
However, a potential flaw in that option could be awarding a 75 percent discount to an organization that might be large enough and have enough resources that it doesn’t “need” the cut rate. Other smaller events that don’t have many resources could actually need the discount more than the larger events.
The third and preferred option is essentially a hybrid of the first two. It would limit the discount to only those organizations with 501c3 status, or those that actually serve a public need. It would also require an organization to submit an IRS Form 990, which confirms the validity and active status of the non-profit applying for the discount. Option 3 would eliminate the 501c6 non-profits, or those whose work essentially just benefits the group.
Councilman and committee member John Gehrig said whatever option is chosen, it shouldn’t be overly complicated.
“It has to be easy and it has to be consistent,” he said. “Not all events are created equal. Maybe reduce the discounts for the 501c6’s, or those clubs that come in and rent the beach for next to nothing.”
Councilman and committee chair Wayne Hartman said any option chosen should meet the needs of those events that best serve the town.
“The sand soccer tournament, for example, brings a lot of people to town and that’s the type of wholesome event we want to attract,” he said. “That has to be considered in this.”