OCEAN CITY — Most special events throughout the year put a strain on the various departments in terms of staffing and resources, raising the question this week if the return on investment is always worth the cost.
That was a question debated extensively this week during the town’s strategic plan update work sessions. It’s no secret the various special events throughout the shoulder seasons put heads in beds and keep the resort’s private business sector thriving for the most part, but there is an increased cost in terms of the manpower and other resources the town provides to host them.
In a perfect world, the special events would be largely self-sufficient, but it has come to light in recent years special events have come with an increased cost to the resort, some more than others. Naturally, the signature events such as Springfest, Sunfest, the Air Show, the White Marlin Open and St. Patrick’s Parade, for example, typically result in big boom weekends for Ocean City. Others including Bike Week and the various other motorized special events do the same, but in all cases, there is an increased cost to the town in supporting them.
From the public works department building stages, installing lighting and other electrical components and even setting up cones for a 5K race, to the extra police manpower needed to safely monitor events and direct traffic, all of that comes with increased costs to the town suffering an employment drain in the offseason when the seasonal workforce is long gone.
“The salaries and overtime associated with the special events is about $1 million per year,” said Budget Manager Jennie Knapp this week. “That’s just the labor cost. The most expensive special events in terms of staffing and salaries are the motor events.”
Public Works Director Hal Adkins said his department can continue to stretch manpower to accommodate special events, but it might come to the point other important city work is compromised.
“If we keep adding special events, there will be some attrition with what we’re able to do,” he said. “Maybe curbs don’t get painted or streets aren’t maintained. We’re just barely hanging on now.”
City Engineer Terry McGean agreed dedicating much of the public works department’s manpower and resources to the special events has caused a strain on getting other city projects done in some cases.
“These events have an impact,” he said. “We used to be able to use city carpenters and city electricians. We talk about putting lights at the bus stops, well we used to be able to use city electricians for projects like that. Now, those people are consumed with doing the special events week in and week out.”
Mayor Rick Meehan pointed out the cost of manpower and other town resources is only part of the special events equation.
“It’s tough to gage the entire economic impact in terms of the city’s costs,” he said. “It’s not an exact science. We have to look at the big picture. We have to look at the businesses these events support, the jobs they support and the money they bring into the town.”
Dedicating a portion of the recently increased room tax to offset the cost of town resources to support special events is an idea bandied about. Naturally, if the events are truly putting heads in beds, the room tax portion should be sufficient in terms of offsetting the town’s expenses. However, Councilman Dennis Dare pointed out the large percentage of room tax is still derived from the peak season months.
“Look at the room tax in the offseason,” he said. “About five months out of the year contribute around 87 percent of the room tax. If that’s what we’ve been doing and it’s working, maybe we should keep doing that. Maybe we find out being able to keep the lights on, so to speak, 24/7, 365 days a year might not be possible.”
Councilman John Gehrig pointed out the town was likely at a crossroads in terms of continuing to support offseason special events, but had to be in it to win it if that was the path taken.
“We can’t stay here,” he said. “We have to scale it back or charge forward. That’s the decision. Nobody is saying January and February are ever going to match July, but there is room for growth in the offseason.”
Dare said the municipal bus system was analogous to the acceptable costs associated with special events.
“We run the bus 24/7 during the summer and it makes money,” he said. “We run it all winter and it loses money, but that’s acceptable because it’s a necessary service. Maybe it’s kind of the same way with the special events. We’re subsidizing the offseason with what we do in the summer.”
Knapp explained the room tax contribution to the general fund in the context of special events and the need for additional staffing and resources. She said for the month of December, the growth in the room tax contribution to the general fund in the last 10 years has been $35,000, or just $3,500 on average in each December. In October over the last 10 years, the growth in the room tax contribution to the general fund has been a little better at $86,000, or $8.600 in each October, but that doesn’t begin to cover the town’s costs for the special events.
“Special events cost the town an average of $133,000 per month in terms of staffing, overtime and other expenses,” she said. “When you look at the numbers over the last 10 years, you have to wonder if we’re ever going to get there.”
Nonetheless, Meehan again pointed out the vast difference between winter in Ocean City now and winter in the resort two decades ago and attributed in part to the various special events.
“Look at December in Ocean City now compared to 20 years ago,” he said. “There are a lot more non-resident property owners and they’re here on the weekends in the winter. They are going to restaurants and supporting our businesses. Look at the Christmas parade. There are people packed along the route. Yes, there is always a cost associated with that, but we are a year-round community.”
Council President Lloyd Martin said identifying funding sources to offset the town’s cost of supporting the special events was paramount.
“We sit here every budget season and say we’re not going to raise taxes,” he said. “We keep doing more with less, but there comes a tipping point. We want to continue to grow these events, but we have to come up with a way to fund them.”
Dare said the town has accomplished some revenue enhancements in recent months that could offset the costs associated with special events.
“We’ve taken a lot of positive steps in the last year,” he said. “We raised the room tax, we keep fighting for tax differential, we set the constant rate property tax and we have a task force looking at parking revenue. We’re nibbling away at it with a lot of these things.”
Ocean City Police Chief Ross Buzzuro said the special events, particularly some of the motorized events in the fall, continued to put a strain on his charges.
“Our people work all summer without a break, then we go into September and October and we have back-to-back-to-back events,” he said. “By then, our seasonal support staff is gone. It would give us some relief. Now, we’re heading into November and we’re just starting to get some relief.”
