Revenue down, events uncertain

Council Members Disagree On Funding Events

BLYTHEWOOD – As Blythewood works through its budget process for the 2020/21 fiscal year, the funding of events became a point of contention at the May 26 town council meeting, which was held via Zoom.

With all the disruptions caused by COVID-19, two things were made clear: hospitality tax (H-tax) revenue is down significantly, and unknowns related to the virus could put a damper on the annual town events that are funded by H-tax revenue.

“At the end of the day, to give you a balanced budget we had to make some drastic cuts,” said Town Administrator Brian Cook, who presented a draft budget on first reading that was created with input from council members.

The town’s hospitality tax, which is generated by restaurants, is down from a typical $175,000 to just $29,000 – less than 17 percent of the typical amount. The town uses this money to fund tourism, including events that are supposed to draw tourists.

Looking at a budget proposal that included major cuts to events in the coming year, the council members clashed over what approach to take.

“I’m not comfortable saying ‘This is how much money we’re going to get’ because I think it’s going to be a lot less than anybody anticipates,” said councilman Donald Brock.

“If people aren’t going out spending, then money’s not going to flow into the town coffers, and if the town doesn’t have the money, then we can’t spend it. I think we really need to kind of step back and be cautious in allocating funds and not overpromise.”

Brock’s suggestion was to fund each event at $1 as a placeholder, and re-assess quarterly when actual revenue – and the status of events realistically taking place amid social distancing – is known.

Also, he said, weight should be given to cultural events like Black History Month, which don’t have their own revenue stream, over entertainment-focused events that raise money through ticket sales and sponsorships and that generate enough revenue to fund themselves.

“Revenue has nothing to do with it!” declared Councilman Eddie Baughman. He repeated the statement several times.

“The whole idea behind the hospitality tax money is to bring folks to town to spend money,” Baughman said. “Their revenue should be irrelevant.”

Baughman was particularly concerned about the Big Red Barn Summer Jam event. He said a significant percentage of the profits it generates go to fund charitable activities in town.

Baughman asked for an explanation for why the event, which last year received $12,000 in town funds and this year requested $25,000, was slated to receive just $6,250.

“We’re cutting their funding almost to the point that they’re probably going to back off and not do it,” he said.

At that (May 26) council meeting, with available H-tax funding dropping from $175,000 to only about $29,000, administration suggested the following reduced funding amounts.

Only three events were funded at $6,250 in the budget proposal: Summer Jam, which topped 1,000 attended in its second year and RibFest and OktoberFest, both of which brought in well over 2,000 in their first year. Black History Month was slated to receive $5,000; Bengal Boys Golf $2,250; Holiday Market $1,500; the Big Grab $1,000; and Spring Market $746. The July 3 fireworks, which was set to receive $25,000 before the cuts were initiated, brings in 5,000 – 6,000. While it’s still in the discussion stage, council is leaning toward have the fireworks event but with no music and no food and attendees would view the fireworks from their vehicles.

Three other events and several planned maintenance projects were slated to receive $0.

Mayor Bryan Franklin said the reasoning behind funding some events a lot more than others was sound. In the draft budget, the bulk of the available funding was allocated toward events that have significant ahead-of-time costs, such as hiring, booking performers and publicity costs.

“It’s not picking winners and losers,” he said. “It’s where does that start-up money come from? What organization does it need to go to early so they can lock in plans, and how can we keep it below our $29,000 [revenue projection]?”

After the May 26 meeting, some council members suggested pulling $134,654 from the H-tax fund balance to fully fund the FY21 H-tax events as shown in the chart above. These amounts are proposed but will be voted on at the June 22 town council meeting at The Manor.

Sutton Shaw, who owns the Big Red Barn Retreat and organizes the Summer Jam, was in attendance to lobby for her event.

She touted the enthusiasm she witnessed among tourists at Myrtle Beach on a recent weekend as a sign of good news for tourism and events, but her comments on the realities of planning the Summer Jam cast doubt on the timing of this year’s event in light of COVID-19.

“Some of us are planning now,” she said of event organizers. “Our summer jam originally happens in July. We are trying to move to September….”

She didn’t make a specific request for funding, but rattled off a list of her own community contributions. She expressed disappointment in what she felt is council’s lack of appreciation for her efforts as reflected in the proposed reduced funding amount for her event.

“Personally I’m donating all my time, and my family has donated 75 acres of the land for a new building and investing over $1.5 million to bring our newest program in that will launch in October,” she said, noting that these efforts are aided by profits her family’s business has realized during the pandemic.

“My family owns 26 Sonic drive-ins, and we’re killing it in sales. We’ve been up 20 and 30 percent with Covid,” she said.

Her comments reinforced a point made by Brock earlier in the meeting.

“If we’re continuing to allocate money to events that can fund themselves, then we won’t have money to fund upstart and new events that can bring additional tourism into town,” he said before sharing some numbers about the Summer Jam.

Last year, he said, the town contributed $12,000 to the event. The year before that it was in the $6,500 range. Those two years, the event turned a net profit of more than $26,000.

“I don’t know how I could sit here and possibly vote to approve an event that should be sitting on $26,000 in the bank, and their expenditure last year was $28,000,” he said, arguing that town funds should be used only to help revenue-generating events to get established – not to support them perpetually.

Councilman Sloan Griffin agreed with the idea of taking a step back to re-assess event funding as information – about the revenue, about the effects of the pandemic, about the likely status of events in real time – becomes more clear.

“I agree at this budget session right here that we do need to take a pause,” Griffin said. “We could be in the same situation January next year.”

When council convene on June 10, the H-tax funding packet had done an about-face, reflecting full funding for the events as shown in chart the chart above.

With almost $500K in the H-tax fund balance, Town Administrator Brian Cook said some council members had suggested using some of that fund to fully fund the H-tax events.

“We took $134,654 out of the H-tax fund balance and allocated it for that purpose,” Cook said. “It will be up to council as to how much they want to use to fund the events.”

The next meeting will be open to the public to attend and will be the final vote on the fy2020-21 budget. It will be held at Manor at 7 p.m., Monday, June 22. Those attending are asked to wear masks and practice social distancing.