OCEAN CITY – Discussions on a new special event fee structure highlighted a recent resort commission meeting.
Last week, Tourism and Business Development Director Tom Perlozzo presented members of the Ocean City Tourism Commission with a new fee structure for special events. Featuring four tiers that categorize events by size and profit status, he said the changes would not only increase year-round occupancy and revenues but would create a fee structure that is fair to the promoter while minimizing reliance on city resources.
“Like everyone today, with the workforce shrinking, we need to figure out a way to minimize city resources and use private-sector resources in some cases,” he said. “It could be anything from on-site security to traffic control to EMS. We’ve taken a peek at all of that as we’ve designed this.”
In his presentation last week, Perlozzo pitched a new fee structure that would divide special events into tiers. Tier one, for example, would include gatherings of up to 999 people and would only require a permit, while tier four would include multi-site events of more than 6,000 people with a higher impact on city resources. Tiers three and four, he noted, would not only require council approval, but would include negotiated agreements.
“Each one of those tiers has some triggers associated with them,” he said.
Perlozzo added the new fee structure would be based on profit status and the time of year in which an event is held. Fees for in-season, for-profit events, for example, would differ from off-season, nonprofit events. The formula also sets vendor space fees and cost-per fees, which would be based on ticket sales or the number of registered participants.
While he supported the new fee structure, Councilman John Gehrig said he had concerns about some aspects of the model.
“Say a promoter comes up with an alternative method,” he said. “They don’t want to pay per person. Now they are going to make it free and charge some other way.”
Perlozzo said that was a possibility.
“Let’s say I’m a promoter and will get charged,” he replied. “I might want to be a nonprofit or run my event through a nonprofit.”
Gehrig said that was the case with several special events in town. He noted nonprofits such as the Ocean City Development Corporation (OCDC) partnered with special event promoters each year.
“I think that also had something to do with liquor license things in the past,” OCDC Executive Director Zach Bankert replied.
Gehrig also questioned how the town would charge large special events that are essentially free to the public. He noted events such as the OC Air Show and the White Marlin Open attract tens of thousands of people, who ultimately use town resources. Fees for those events, he argued, would not cover the town’s costs.
“Whatever that cost per person, that’s what we’re trying to cover. That seems to be the basis behind this entire discussion, whether that’s a paid event or a free event,” he said. “Except we’re only covering our cost if it’s paid. My point is that’s biased. Are we solving the problem we’re trying to solve, or is the problem we’re just trying to make money? If that’s the case, let’s just say it.”
City Manager Terry McGean disagreed.
“I think it is trying to cover our cost, both direct and indirect,” he said. “But it’s also a tool … to encourage the events we want and discourage the events we don’t want.”
Gehrig said he didn’t necessarily want to charge promoters more money, but simply wanted to highlight some of the issues associated with the new fee structure.
“I think what we need to do is come back,” McGean said. “I think everybody is on board with what we’re doing for ticketed events in general. I do think there’s a concern for a for-profit event that may be non-ticketed, and how we would address that. So let us think about that and come back to you.”
