Politcal newcomer pushes restraint on finance, OC events
Bob Baker (Oct. 12, 2012) Bob Baker is one of few contestants in this year’s crowded field of council candidates who is not a political veteran. He moved to Ocean City permanently in 2007, after retiring from a 27-year career in business development and financial analysis.
Baker, an MBA, and his wife, a CPA, now operate Baker and Associates LLC, an accounting and management firm specializing in condominium and homeowners’ associations.
¦ OCEAN CITY TODAY: Why do you want to get into politics now, as someone who’s never been in it before, given that it’s so polarized here right now?
¦ BOB BAKER: I can’t say I’d ever thought I’d get into politics, I can tell you that. It does bother me, though, it bothers me how polarized we’ve become as a country. But that doesn’t surprise me so much, what surprises me is how much we’ve become polarized as a little community. I find that to be disheartening. But the reason I got in was because I found myself complaining about things. I’d talk to my wife about it, and I‘d write letters and send emails to the council. Typical stuff that people do, but I said to myself eventually that I felt like I was uniquely qualified to help the town, and instead of complaining maybe I should try to do something about it.
I decided early on not to take campaign contributions. People offered that, up front. I’m just really uncomfortable with that, because I want to be sure that I don’t feel like I need to give preferential treatment. However I vote, I’m totally independent. I’ll tell you everything I feel, which probably makes me not a very good politician. But I’ll give you my opinions, and by that you should know the way I’ll vote. n OCT: In ads in our paper, and in other places, one of the things you’ve put out there is “conservatism is the key to the future.” And that’s something that there’s been a lot of debate on right now in the council, what exactly conservatism entails on this level. What things have you seen done that you think follow the conservative line, and what would have done or do differently? n BAKER: There are things that jump out. First of all, what I say about conservatism is that it’s just not how much you spend, it’s how you spend it. But I look at the budget numbers – and I come from a business background – over the years, and they’re getting thrown around lately, but in the last 10 years, expenses are up 54 percent. You look at the last two decades and they’ve nearly tripled. And there are going to be a ton of reasons for that. But I can tell you that no business in town could survive when they’re numbers are flat – meaning the tourism, the residents – but your expense base tripled or whatever the number is exactly. You just can’t do that. That’s a major flag to me.
I guess government is like the cookie monster. When times are good, the revenue flows in, and governments have a tendency towards spending all of that, and all the sudden it becomes [part of a] fixed budget. And then times aren’t so good, the revenue’s not flowing in, but [government says], “We can’t live without that, we need that.” Well, you didn’t need it before. Your tourism base isn’t any higher; your residents aren’t any higher, so how can that be?
So to me there are basic business principles that you can apply all over the world to private industry that can be applied to government. Because you just can’t operate that way. n OCT: A big part of the budget is personnel, and — for whatever reason — the question of unionization has become the big thing that everyone wants to know where you stand. Is that something that you have a feeling on? Obviously it’s up to the voters, but looking forward as a potential council member, how do you think it will affect the town? n BAKER: Like you said, it’s up to the voters at this point. I’ve worked in tough situations with tough people, and I feel like I can work with whatever’s there, because that’s how it will be and we’ll have to move forward.
If I [personally] were given the choice to join a union or not, I would choose not to join. I feel that employees could have a better relationship with us without involving a middle person. Ultimately, it would be better for the employees and the taxpayer to have that direct relationship and not have a third party come in. n OCT: I like that your ads refer to the “family image” as a whole, because it’s never really all put together, no one says outright, “We have to guard the family image because it makes people come here and it makes us money.” Is it a matter of just police enforcement to keep down the noise and the behavior, or are there other things to it? n BAKER: The number one topic that’s a passion of mine is the events. They’ve gotten bigger in size and numbers. If you drive around in the evenings – especially [last weekend] – we have to do a better job of enforcing the laws. I’ll give you some examples, because I talk to a lot of people – and I’ve gotten a lot of support on this – but some people have misinterpreted that I want to get rid of the events. That’s not what I’m saying. I’m saying keep them under control. I’m not talking about giving someone a ticket for going 45 in a 40, I’m talking about the endless drag racing that goes on.
In the summertime, we’ll come across the bridge – we volunteer at the animal shelter in West Ocean City – and I’ll see two or three police officers looking in the cars, seemingly to look for seatbelts, which is pretty common. And then, in the summertime, there was that issue that was in your paper about Seabay Drive, and there’s an article about a citation for doing 18 in a 15. That’s bizarre. I can show you 95 in a 30.
The response I get is, “Well, it brings a lot of money to the town.” I’m not talking about stopping the event, I’m talking about stopping those few people who are just making it dangerous and uncomfortable and chasing residents and visitors away. I’ve talked to a lot of people who don’t come here because of that. n OCT: A couple of weeks ago, Tom Shuster, our Parks and Recreation director, basically said that we’re reaching a point of diminishing marginal returns with the events, that it’s basically almost full and if that happens, it’s potentially taking space away from people who aren’t coming here for the events. If we have reached that tipping point, how would you pick and choose? n BAKER: The top tier for me would be the events that are centered on a certain thing — like a motorcycle or car — that ends up on the streets as matter of course. The air show comes in — and you can argue that’s noisy too – but they’re not racing their airplanes on the streets at nighttime. So those events would be on the top tier for me that we ought to look at and say, “Okay, do we have enough?” Are we just going to take any weekend where we say, “this is kind of a soft weekend, why don’t we just encourage the bikers to come again?”
If we’re afraid of chasing away a few people because they can’t drag race on Coastal Highway, that’s a problem. There are a lot of people who come to these things because they love cars. I love cars and motorcycles too, I just don’t want them racing up and down the street all night. n OCT: Do you think there are other ways to promote the city’s slow weekends or not have so many times of year be event-dependent? n BAKER: I definitely think there are other ways to promote. And I’m not saying we need to get rid of these – I would be hard pressed to add any more, especially of those ones I mentioned – but certainly if you went cold turkey and cut them off, there would be a short-term impact. Whether you could replace them long term is a tougher question. But my first step would be to simply get control of the ones we have and enjoy it, and let everyone enjoy it. And by that I mean that, if someone comes to town who doesn’t have prior knowledge of these events, are we going to permanently scare them away and have them tell other people and scare them away to? The noise is one thing, but if you’ve ever seen videos of these events on the side of the streets, there’s a lot of stuff going on. That’s the stuff we need to get control of, stuff that scares other visitors away. That’s counterproductive. n OCT: In that vein, you’ve also touched on the advertising. I know the recent debate on MGH’s contract centered on the expediency of bidding it with such short notice, but there is a larger debate there, is the marketing direction the town has taken under MGH the right one. Do you think it is? Are we pitching ourselves to the right people? n BAKER: The answer to what you’re asking is that we don’t know. What I think I see is a plan that is a very simple, elementary advertising plan where we hire an agency that puts together some clever advertising and goes out and does media buys. And from that, we say, “It seems to work because people told us they saw it.” But we don’t know because we don’t have the data to back it up. We don’t know if it was effective or even efficient. You have to have the measure tools in place, and to the best of my knowledge, we do not.
Before we even make a decision on MGH – and I’m not saying they’re the right or the wrong firm, I don’t know – but we should put together, as part of the strategic plan, a real marketing plan. And from that, which determines who we want to target, we build an advertising plan.
But we have to get the data. We don’t know, and we’ve never done any research, to the best of my knowledge, that goes out externally. We tend to look at everything inwardly focused, and we just say, “We feel that way.” That we just think it’s working, or that it would have to be worse if we didn’t do that. I mean, I could say that if the council truly believed they wore brown shoes and the numbers were up, they would say, “See, it’s because we wore brown shoes.”
On the other hand, you could have really crappy weather all summer. But that doesn’t mean that the advertising plan was bad because the numbers were down. You can’t just create cause and effect. You have to understand it. A real marketing plan would get behind just that stuff and figure it out, they’ll talk to people and learn why people come here and why they don’t, because that’s critical. You have to know why people are choosing Virginia Beach or Myrtle Beach or Ocean City, N.J. We don’t have any of that information. I would say right now it just feels like we have a very elementary, very rudimentary marketing plan where we throw dollars at an advertising campaign. And that’s not a knock on MGH. I don’t know that they can’t do more. But we’re not doing it on our end. n OCT: As far as the sustainability for the town goes, you have run a business that’s not necessarily seasonally dependent. What have you seen as far as what people would want here in order to stay year-round? What’s been built in the last 10 or 20 years, and what has it really gotten us, in terms of the residential base and keeping it up long-term? n BAKER: I feel like we missed the boat a little bit there. If you talk to people, they consider themselves residents who live here full-time, and people consider themselves residents who live here seasonally, whether its winter or summer. Which is fine, I like that ownership of the town. But our actual numbers have declined to around 7,000, and I don’t see why we can’t focus more on that. It doesn’t mean that we’re going to be 200,000 people, but we can be a lot better than 7,000.
I think a lot of people would like to retire here. They like the quiet beach lifestyle. I like the quiet beach lifestyle. I think you have to be realistic in knowing that we won’t offer certain things that you get elsewhere. We’re not a big city that can offer a lot of culture or arts. We’re probably not going to get that many shops or types of stores. But we can certainly do more as we build that residential base and encourage people to live here. I think the residential base is critical, because they’re the top tier of people who really care about the town. Having that community involvement is huge to me, whether we start with what I consider a pretty easy goal of doubling the 7,000 and getting to 14,000. To me, that should be awfully achievable. You have growing support for the businesses that are open in the shoulder season.
The number one thing the government can do is drive down tax rates, because right now people are probably more inclined to live in West Ocean City than they are in Ocean City, because of tax rates. So the number one thing for me on that would be to get tax rates lower. But I should add that I’m not talking about knocking down businesses to build more houses. I hear complaints all the time – I live in Little Salisbury – about more houses going to rentals. That’s because people aren’t moving here. You don’t have to have singlefamily houses. People who are looking to downsize or retire want to live in their condos. So increasing the resident population doesn’t change the infrastructure, in my mind.
We get complaints all the time from people who live here or consider themselves residents, part-time, that they’re overwhelmed. They feel they’re viewed as the second class, at the expense of tourism. It shouldn’t be at the expense of tourism, it can be the same thing. We can all live together. n OCT: Is the government of the town itself, as it is right now, sustainable from what you’ve seen? That seems to be a big topic, specifically the change in employee compensation and what kind of impact that will have. What more do you think can be done on that front, as far as how much the city is spending and how much it will be obligated to spend over the next 20 or 30 years? n BAKER: With some of this stuff, you need to step back and apply common sense. We started talking about earlier the growth rate of expenses over a couple decades. Again, I don’t think any business in Ocean City would be here had their expense rate gone up the same (as the city’s) but their business level stayed the same.
You think about sustainability, that’s a real caution. Now, fine, we’re a government, we can just try to force taxes on people. But the expenses are an issue – they’re an issue at the national level too. Obviously, we just can’t print money. But on the compensation side, we certainly need to bench- mark our employees. If you point to an employee and say, “Is that employee paid the proper amount?’ I couldn’t necessarily tell you that. I’d have to research that and compare it to not just other governments, but also private industry. If we sharpen pencils here, it’s not that different from sharpening pencils somewhere else.
In terms of benefits, I know there’s been a lot of talk about the defined benefit, the pension plan. I would say that if you watch what’s going on in the world, those types of plans are very rare, I think it would be safe to say now. I don’t know if, in my career, I ever had a defined benefit pension plan in the companies I worked for. And the reasons are pretty simple. In a 401(k)-style plan, which virtually the whole [corporate] world has gone to, the company contributes, it’s your money, do with it as you like, take it with you, and we’ll know as a company or a government what we have to spend, and once we’ve done that, we know what the future is, because we’ve already given it to you. In a defined benefit plan, we’re worried about what interest rates are going to do, and the same with post-retirement medical plans.
If you look around at the remnants of companies and agencies … you can look at General Motors, or the United States Postal Service. I mean, the Postal Service is just flooded because of their post-retirement benefits, their pension and medical. It’s not because of their day-to-day service.
In California, how many [government] bankruptcies have we had this year? Four or five? I believe Stockton was the largest bankruptcy of a municipality in the history of the country. And it’s primarily because of these plans. That’s got to tell us something.
It may not be great that we can’t offer all this stuff to people who retired that we used to. But unfortunately, that’s the way it is. We just can’t spend that much more money than the rest of the country and think that it’s okay. I know these are sensitive issues, and people will disagree. But I just try to stick with the facts. n OCT: Like with the Cookie Monster analogy, do you think the city overfilled its government infrastructure in the boom years? And how do you come back from that? Not to make it too vastly international, but you see countries in Europe that basically did that, and now they’re just cutting stuff off completely and it’s not working out that well. n BAKER: It’s hard. Like you said, it becomes part of the budget. If you look at Greece and what people were rioting over – I think they were talking about raising the retirement age from 50. I mean, the sort of stuff where we [Americans] would say, “Really? You’re rioting for that?’ But that’s what happens, people get accustomed to it and government gets used to that money. It’s natural, money comes in and all the sudden you’ve got these floods of things where people say, “We need that.” But whether you’re managing your household or a business, it’s one thing to know that you need it; it’s another to know that you can always fund it.
Private businesses do not have the advantage of being able to go back and raise their tax rates. When they have good times, if they’re good at running a business, they don’t just build things into their budget thinking that they’re going to have their expense base go up forever. Once you get to that point, it is painful. And hopefully Ocean City will not get to the point where we have to do more slash-and-burn stuff. I know they’ve reduced staff, but that’s been done through attrition, in a good way. But it is painful.
I don’t know how else to say that there’s a red flag there when you look at the expense numbers over the years, comparing them to tourism and residential. I don’t know how you can draw any other conclusion.