OCEAN CITY — The resort’s parking task force met for the second time this week, but for the first time it became clear the intent of the comprehensive look at parking issues all over town centers on revenue.
When the task force, appointed by Mayor Rick Meehan at the request of the council, met for the first time two weeks ago, members went to great lengths to assert the point of the exercise is not an indication that town is leaning toward adding more paid parking meters in certain areas of the town. After noted consultant Dan Kupferman of Walker Consultants, hired by the city to lead the parking task force had time to digest comments from the initial session two weeks ago, he returned for a second session on Wednesday with a power point presentation covering a myriad of parking issues from the Inlet lot and the paid municipal lots to the existing metered street parking. The presentation also covered the issue of expanding paid street parking in the ocean block in certain areas of the resort.
After a steady stream of slides and charts, task force member Chris Mitchell brought the discussion around to its simplest terms.
“Do we have a parking problem?” he said. “That’s the question. I’ve never had to leave Ocean City because I can’t find a place to park. I might have to ride around awhile during the peak season, but there are always spots to be found.”
It’s no secret Ocean City is facing challenges on the revenue side in the upcoming budget. On Tuesday, the Mayor and Council had an hours-long debate on a proposed room tax increase to help offset expected budget shortfalls before eventually passing the measure. It now appears increasing parking revenue is also part of that larger equation.
The conventional thinking has always been the three basic pillars of revenue for the town are property taxes paid by the resident and non-resident property owners, the room tax paid by vacationers who choose to rent accommodations and parking revenue, which is largely borne by day-trippers.
To that end, expanding parking revenue can offset some of the responsibilities carried by property tax and room tax revenue. While task force members were reluctant to couch their efforts in those terms during their first meeting two weeks ago, it became apparent Wednesday it’s the heart of the effort.
Much of the task force’s discussion focused on supply and demand for parking. Two weeks ago, City Engineer and parking guru Terry McGean explained there were currently around 2,600 paid parking spaces in the resort including 1,270 at the Inlet lot, 727 more on the various municipal lots and about 569 paid on-street parking spaces, mostly clustered in the downtown area.
Those paid parking spaces combined produced about $4.2 million in parking revenue in 2018. In addition, there are roughly 3,975 free on-street parking spaces in the resort’s ocean blocks. Whether to expand paid parking to some of the on-street ocean block parking spaces remains the multi-million-dollar question and the task force was no closer to recommending that at the close of Wednesday’s second session, but at least the potential for that was made known in no uncertain terms.
“I think we cut to the chase today,” said Kupferman. “One of the parking problems is you’re not making enough money. It’s a revenue issue.”
Councilman and task force member John Gehrig took that sentiment a step further.
“We’re not talking about a demand problem, we’re talking about a dollars and cents problem,” he said. “From the council’s perspective, this is about revenue.”
Task force member Joe Groves, president of the Delmarva Condominium Managers Association, said the focus should be on all of the parking issues from end of the resort to the other, but did not shy away from getting to the heart of the matter.
“We’re sitting here because the city needs revenue,” he said. “If anybody in this room doesn’t believe that, they’re kidding themselves. We have to be honest about that.”
With that 800-pound gorilla in the room addressed, task force members began exploring ways to potentially expand parking revenue in a way that is fair and equitable for all involved. Task force member and business owner G. Hale Harrison offered a solution to avoid the controversial expanded paid parking issue while addressing the town’s revenue needs.
“Every so often this comes up and we talk about adding meters and there is always a backlash,” he said. “Why don’t we look at raising the rates? The rate at the municipal lots and on the street is $2, but maybe that can go to $2.50. The same with the Inlet lot from $3 to $3.50. That might be more palatable for people and meet the revenue needs. Let’s keep it simple. That’s something that could be done this summer.”
For others, it boils down to simply a supply and demand issue. For example, McGean explained the Inlet lot nears capacity during the height of summer only for a couple of hours each night and during the day on weekends. That’s perhaps symptomatic of a larger issue Ocean City has been battling with filling in those midweek down times. For example, if the demand was greater throughout the week during the summer, the parking revenue issue could take care of itself without a major overhaul including an expansion of paid parking.
“We need to figure out how to get more people to come here, especially during those slower times we’ve talked about,” said Mitchell. “That’s the goal. I don’t think adding paid parking or more fees is the answer. We have a demand problem.”
Harrison said figuring out where the demand is greatest and making adjustments to paid parking in those high-demand areas, especially in the ocean block in and around the Boardwalk area, could be paramount to solving the parking revenue issue.
“Free parking is going to vary from neighborhood to neighborhood and from street to street,” he said. “In the downtown area, a lot of day-trippers are visiting businesses, but it shifts as you go further north. We have to look at demand. There is a place where it drops off. I’m not sure where that line is, but it may be in that area of 10th or 11th or 12th Street.”
McGean agreed whatever came out of the task force would need to be applied on a case-by-case basis.
“Whatever we do, we have to recognize it’s not one size fits all,” he said. “We literally have to look at it street by street.”
Task force member Danielle Amos said the demand changes from time of day to time of week and was largely driven by the visitors’ needs.
“It depends on where you’re going and what you’re doing,” she said. “If you’re going to the beach, you’ll drive around for a few blocks until you find a spot. If you’re going to a specific restaurant or business, you’re not going to park five or 10 blocks away.”
For other task force members, it was an issue of fairness. Downtown business owner Bill Gibbs pointed out some businesses are surrounded by paid on-street parking, while in other areas of town, street parking is free for potential customers.
“It is a money issue,” he said. “It’s a money issue for the town, but also for the businesses. In the downtown area, if you want to improve business, you have to improve the ability to park for customers.”
Councilman and task force member Dennis Dare pointed out there might not be a simple black-and-white solution.
“We need to look at some of the premium parking spaces closest to the beach,” he said. “It doesn’t have to be all or nothing. There could be a half a dozen spaces closest to the beach that could be paid parking if people are willing to pay for it and the rest could be free parking.”
Kupferman said the entire issue relates to what is palatable for the public, whether they are day-trippers, vacationers or even residents. He said the expectation is to pay for parking at destinations and Ocean City is no different.
“The issue is whether the tourists are willing to pitch in,” he said. “Will they pay to park, or will they not come because they have to pay to park? The perception is people won’t come if they have to pay to park, but that’s not true. People will come. You’re a destination people want to come to and they are willing to pay to park.”
Whatever solutions come out of the task force, it’s apparent the town is exploring all sources of potential revenue including eking more out of parking. Dare explained there are expectations of operating a clean, safe environment for visitors and residents and that is coming in ever-increasing costs. He said the alternative could be cutting services, but there were expectations to be met and used an analogy to illustrate his point.
“The City Council essentially operates 25 different businesses and we try to operate those businesses to meet the expectations, but it takes ‘X’ amount of money to do that,” he said. “If you sell French fries by the bucket and you want to keep the price at the same $2 it’s always been, maybe there are just three or four fries in that bucket. If you sell pizza by the slice for $2, maybe you cut it in 16 pieces instead of eight. It’s the same thing, but there are expectations.”
Dare said Ocean City would continue to meet those expectations, but it has come at an increased cost and used the same analogy to illustrate his point.
“We want to continue to provide the same level of service, but we can’t sell a bucket of fries with just four or five fries in it,” he said. “They want it brimming over and that’s the expectation, but they’re willing to pay more if its brimming over.”
Dare said the parking issue was only part of the equation, but whatever came out of the task force had to be equitable.
“It’s not a specific number, it’s a fairness issue,” he said. “Last year was very tight and we’ve been told it’s going to be tight again this year. If we go into the budget without exploring room tax or paid parking, the only thing left is property tax. We’re going to be faced with tough decisions if we don’t at least explore all of these things.”
The task force closed its session with more questions than answers. McGean explained he and the consultant would go back to the drawing board and pick up the discussion again when the task force meets in two weeks.