Ocean City Today

Event discount formula in testing

Recreation staff developing algorithm to stop skewed application fees for groups
By Katie Tabeling | Jun 22, 2017

(June 23, 2017) Special Events Superintendent Frank Miller will be developing a test algorithm to help resort officials determine what discounts nonprofits should receive if they host an event in Ocean City.

After several discussions on the special event application’s math, the Recreation and Parks Commission has been studying how to keep event fees reasonable.

Miller said the key is that his staff automatically provides nonprofits with a 75 percent discount on space usage and event application fees.

Event applications usually cost $100, and $250 per beach block of space usage.

“Like with everything else, people get familiar with a process and learn how to take advantage of it. Now we’re trying to get ahold of it,” Miller said during the commission’s June 13 meeting. “There’s no one variable to change in the special event application that’s the answer.”

He presented two options to the Recreation and Parks Commission, including limiting the nonprofit qualification to groups that have offices in Ocean City or providing a scaled discount structure that would max out at 75 percent.

Miller ultimately recommended using a hybrid of the two options, which would give the discount to 501(c)3 organizations. Under the Internal Revenue Service, a 501(c)3 is a charitable organization that serves the public good.

With Miller’s recommendation, this would rule out 501(c)6 nonprofits, which is a membership-based club that serves its members to further its interests. That would involve the various sporting groups that appeared before the council.

“We don’t know the number of 501(c)3s or 501(c)6s that apply, because we only look to see if it’s a nonprofit now,” Miller said. “This option would also look into how much space the event is taking up and to determine if it’s vital to Ocean City.”

Commission chair and Councilman Wayne Hartman thought Miller was headed in the right direction.

“The criteria of having a nonprofit benefit Worcester County or Ocean City is a nice addition,” Hartman said. “The sporting events in June draw a crowd and help us transition to a new type of business, so maybe a next step is a breakdown in costs. Like with Cruisin’, we don’t account for the lost revenue for the inlet lot, but there’s some profit sharing in that.”

Councilman John Gehrig leaned more toward providing other nonprofits the opportunity to receive a discount, but not the mark downs they had before.

“Not all events are created equal. Some provide value to the community, and others provide from a social perspective. Both deserve consideration,” he said. “I think what’s driving people nuts is sports folk coming in a renting the business and it seems like a for-profit business.

“Those helping those in need deserve whatever discount we deserve to give them,” Gehrig continued. “But maybe the others [501(c)6] should have a smaller discount.”

Hartman agreed, and asked Miller to make those considerations when developing a new formula.

“In terms of time and looking at the paperwork … and [IRS forms] that show if the nonprofit is still active and local, it’s going to require more work from our private event coordinator,” Miller said.

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