Grand Marais park board discusses 2018 rates for campers
Oct 06, 2017 06:41AM
Fresh off maybe the park’s busiest summer ever, Grand Marais park board members met Tuesday, October 3 to discuss modest increases to camping and marina rates for 2018.
Park manager Dave Tersteeg pointed out that the recreation park collects user fees to help the City of Grand Marais. “The number one use of our revenue is for property tax relief; each dollar our operation collects is one less dollar needed from the pockets of city taxpayers.”
A second goal is to follow the Recreation Park Master Plan and use revenues to make park improvements.
“Our future capital projects rely on funding from our annual revenue,” said Tersteeg. “In order to upgrade and rebuild our infrastructure, we need to maximize our revenue through market-based, user fee collection.”
Over the past five years, fees have increased one to three percent, which hasn’t had any adverse effect on occupancy. In fact, said Tersteeg, “We’ve seen steady gains in composite occupancy due to increased demand.”
With more than 200 people on the waiting list for a monthly RV spot, there is minimal turnover: an average of three sites open up per year.
“That’s a wait of 70 years for some people. If we don’t make some changes to the park, for some people on that wait list, it’s just not going to happen,” Tersteeg said.
With 300 total sites, which include camping (tent) sites, Tersteeg noted that the park board has a lot of options to increase RV sites in the future.
“Lakeside sites are only 10 percent of our inventory, but they yield 25 percent of our revenue because they are always full. In fact, they are full tonight,” noted Tersteeg.
When lakeside sites become open, the park board has been converting them to nightly rentals, and Tersteeg said the nightly renters spend “a whole lot more money than monthly renters. That’s not to knock monthly renters; they buy groceries, gas, they do shop locally. But nightly renters tend to spend a lot more money in restaurants and shopping downtown.”
But Sally Berg countered by saying, “Our seasonal people take care of their sites, and many of them contribute to the community as volunteers. We can’t overlook that.” Tersteeg nodded in agreement but added that the city council had sent an unequivocal message to the park board to maximize the profits at the park to offset the levy. “It sounds greedy, but when we make more money here, it directly lowers the levy for the people living in Grand Marais.”
Even marginal rates adjustments add up. Assuming flat occupancy for 2018, adding 50 cents to the nightly hook-up rate would bring eight thousand dollars more to the park. That would be a 1.3 percent increase and raise the fee from $38.50 to $39 per night.
A 1.4 percent increase in the three-month rate would add $4,000 more for 2018. A 2.8 percent gain would double that amount.
Other ideas explored to generate more revenue included extending the mainstay for events. Currently, there is a threenight minimum for the Fisherman’s Picnic. Tersteeg suggested three-night stays of busy weekends that would include the Fourth of July, Art Fair, Labor Day, and Radio Waves. Park board members Jennifer Stolz and Sally Berg agreed with Tersteeg.
A small increase in reservation fees, raising them from $7 to $8 and an increase in car fees which are currently $3 per night, were also mentioned.
Reviews and ratings for the park continue to be strong, with TripAdvisor.com and Google Review giving the park four out of five stars.
But one user of the park, “Ron,” said, “Every year you try to squeeze every dollar out of the park to bring in more revenues, but why don’t you give something back to the users of the park like Wi-Fi? If you say you are going to raise your rates three percent, then go and spend $30,000 of those profits and bring in Wi-Fi. Most parks offer this.”
“You can’t put in Wi-Fi for $30,000, not even close,” said Tersteeg. “We have looked at that, and I can tell you it costs a lot more than $30,000 to bring Wi-Fi into the park.”
Three potential Wi-Fi providers were asked to submit bids to provide Wi-Fi, with the lowest estimate coming in at $90,000 to install and $3,000 per month to provide the service. Equipment would have to be replaced every two to five years. Repeaters would have to be installed every couple of hundred feet throughout the park, which would be unsightly, noted Tersteeg, who added, “If we were losing business because we didn’t have Wi-Fi, then we would have to put in Wi-Fi, but that’s simply not the case.”
“We are in the camping business, not the Wi-Fi business,” said Berg to the gentleman. She suggested he purchase a “hotspot” for his cell phone which would allow him to have Wi-Fi. She said that would cost about $10 per month and added that there was Wi-Fi at the park office for park users who didn’t have a “hotspot” on their cellphones.
The park board will review the numbers Tersteeg presented and come back next month to vote on rate changes to the park.
Keeping with the trend, September 2017 was up $7,000 from last September, and brought in $190,741.
Despite a wet, cooler summer, year-to-date gross revenues have set another benchmark of $1.150 million, more than $67,000 (6.2 percent) over 2016.
“Budget projections for 2017 forecast total gross revenue from the campground and marina to be $1.021 million. With roughly $50,000 of October revenue still coming, it looks like we’ll have an excess of $180,000 over what was projected, said Tersteeg.
Future park plans
As a follow-up to talks the park board had in August about the recreation park and open space plan, Tersteeg led a discussion.
Central to that discussion was to update and amend the 2009 Rec Park master plan so it could be submitted to the Greater Minnesota Regional Parks and Trails Commission. The commission will use that data to help decide whether or not to give the park “regional significance,” which could qualify the park for Legacy funding.
Improvements the park board would like continued are upgrades of power and more sewer sites to current electric/water only sites. A new bathhouse #3 needs to replace the current one, and Boulder Park and the Coast Guard lot need redevelopment to allow better parking and possible public restrooms and event facilities.
A significant need with a big price tag is the Parkside Public Access project which has an estimated cost of $2 million for improvements to the boat landing, rubble break wall, parking lot and picnic area. This is a project that would be coordinated with the Minnesota Department of Natural Resources should grant money become available.
Tersteeg said efficiencies could be gained from developing a mobile responsive website that offers real-time, map-based online booking. He also talked about upgrading sub-standard sized sites, emphasizing quality over quantity.
Municipal marina improvements which would include moving the larger break wall and building more boat slips to allow better service are also on the list but would require even more dollars that aren’t currently available.
Dave Mills, the city council liaison to the park board, talked briefly about the city potentially acquiring the Coast Guard Station property. The Cook County Historical Society has been eying the site to put up a maritime museum. But because there are so many unknowns about when the Coast Guard plans to offer that property—if it ever does—the discussion was put on hold.