In a budget workshop last week, the Eureka Springs City and Advertising Promotion Commission tackled a number of issues, most prominently areas where the CAPC had gone over budget in its efforts to bring more visitors to town.
Commissioner Bobbie Foster led the workshop going point by point over troublesome areas.
"My concern is in several areas where we're over budget," she said. "I've been thinking about it, and I want to treat this as I would treat any business. When I bought Mud Street Café, it was losing money, so I jumped in and saw weak areas and improvement areas, and I think that's how this needs to be treated."
Foster said she'd gone through the CAPC budget item per line item to see where the commission could cut back. "I think [Director] Mike [Maloney] has done a fine job in most areas," she said. "But I think the overages speak to where we really need to get our heads together collectively and break this down and see what we can do better."
She emphasized her problem wasn't that the over-budgeted items hadn't worked. "Obviously what we're doing has increased foot traffic, and business has improved overall," she said, "but we can't have that at the expense of not being able to pay our bills."
Over-budgeted areas include the the recent folk festival, which was budgeted at $10,000 but ended up costing $22,000.
Chairman Charles Ragsdell suggested the problem wasn't that they spent too much, but rather that they had budgeted too little. "What I realize looking at this is that $10,000 for a major event severely underbudgeted it," he said. "My blues weekend budget is considerably more than what you had for an entire week. You can't run a folk festival for $10,000. Maybe we should've had a better grasp of what we needed, The cost for talent -- $15,000 -- I don't know if that was the wisest way to spend it."
Ragsdell referred back to his long experience organizing such events. "Having produced festivals, I would have to say they are not money-makers in general," he said. "Revenue generators, yes. There is the potential for generating enough traffic to an event to drive visitors to eat out, sleep over and spend money in gift shops. While you're not necessarily going to make money from your festivals, you are definitely generating money in the local economy. You just have to keep the costs in line with the revenue they can generate for the city as well. Having doubled a budget on a festival is questionable. How can that happen? That should've been discussed before. In this case, if the folk festival events had generated the money we'd hoped for, great, but lack of ticket sales caused costs to far exceed the budget."
It has been a long-standing debate in the CAPC whether it is better to sponsor "loss leaders," big events which draw people to town, whether the event itself actually makes money, or whether it is better to minimize cost (and use) ofThe Auditorium.
Commissioner Joe Joy fell into the latter camp. "I thought that we were out of the business of gambling, of hoping we can bring someone to The Aud and hopefully sell enough tickets to break even, like the CAPC used to do."
Commissioner James DeVito disagreed. "Our revenues increased 10 percent in October. Is that the biggest increase in Arkansas? Probably. Sure, you have to take a risk any time you put on a festival, but in fact it does generate a good revenue stream for the city. When the year finishes I think we'll be right there on target. Everybody had a good November. Those numbers are going to be good."
Other over-budget areas included print ads and expenses for going to national travel shows to promote Eureka as a tourist destination to tour groups. Solutions for the first problem included putting more money into web-based advertising efforts; in the second case, commissioners suggested being more discriminating about which travel shows are attended.
The next workshop will take place at 5 p.m., immediately before the next CAPC meeting, on Dec. 12.