Organizers of one of the region’s largest events question the legality of a fee increase that could cost them nearly $40,000.

Peninsula Township last year increased its event fees. In addition to increasing fees for permits themselves, township officials bumped the participant fee from $1 to $5 per person.

What this means for the Traverse City Track Club and the roughly 7,400 people set to run the various Bayshore races this year is an increase from $7,400 to $37,000 in fees. Track club officials are worried that the township is simply using the race as a cash cow, something they allege may be illegal.

“It’s become evident to me after some consultation with legal counsel that this fee change may not be permissible under Michigan law,” TCTC Executive Director Lindsay McLaughlin tells The Ticker. “It's our understanding that fees associated with municipal permits and ordinances have to be proportionate to the costs associated with the (event), rather than for revenue-raising purposes.”

Documentation from past township meetings suggests a major factor behind the participant fee increase was a desire to raise money for township parks. In minutes for the township parks committee meeting on April 26, a sentiment attributed to Planning and Zoning Director Jenn Cram says the increase "could raise $40,000 for our parks from the 8,000 people who attend the Bayshore Marathon."

The township board approved the fee hike the following month, and minutes from that meeting show Cram said the increase was to "account for restricting roads and parks and things like that," and later saying that "$5 coming to us to support our parks and public programs seems small" compared to the overall cost of entering events like Bayshore. 

TCTC already pays thousands of dollars in costs for increased police and emergency services on top of permit fees, McLaughlin says, along with other expenses tied to notifying residents along the race route, road closures, recycling and trash and much more. This is standard practice for races or large events in almost any municipality.

Peninsula Township Supervisor Isaiah Wunsch tells The Ticker the participant fee hadn’t been touched in possibly “a couple of decades," and says increasing it is about more than just parks. Even with the track club paying to cover certain costs, the township of roughly 6,000 people still incurs significant expenses tied to thousands of runners, their families and race support staff descending on Old Mission.

“I think the argument is whether (what the track club already pays) is sufficient to cover the total scope of costs that the township is bearing,” he says.

The township is in the process of consulting with an attorney on the matter, but Wunsch does not believe they are in the wrong.

“There are reasonable costs here that we can show we need help covering,” he says. “It’s not being used as a cash cow or slush fund or something.”

Because of their concerns about the legality of the increase, McLaughlin says she’s hestitant to simply pass the cost on to runners.

“Yes, we may be able to pass this fee on to participants to offset this increased cost, but only if the fee is permissible under Michigan law,” McLaughlin says. “I want to stress that because if the fees in question are impermissible under state law, then as a 501c3, I am unable to pay those fees without jeopardizing our non-profit status.”

The 2024 full and half marathons are already at capacity, and runners paid a $5 increase this year. But McLaughlin says the jump was primarily tied to increased operating costs.

McLaughlin is also concerned that the fee increase could become part of a pattern in the future. The race’s budget is about $380,000, she says, so hits to the tune of $40,000 are significant.

“Unpredictability in our costs, especially with dramatic increases such as this, will be incredibly challenging for our operating procedures and the ability to run the race,” she says.

Wunsch says he does not expect the township to raise the participant fees any time soon, and if so, it will be by a much smaller factor. 

“Future increases are likely to be modest…and should keep pace with inflation,” he says.

Bayshore’s permit is expected to be discussed at the March 12 Peninsula Township board meeting, and McLaughlin says she hopes township officials will relent on the increased fee during that meeting (if not before then). If the increased fees stay in place, McLaughlin says TCTC likely will offset the cost by reducing or eliminating charitable donations.

“As a 501c3, besides offsetting the cost of the race and general operating expenses for our membership activities, we give all that money back. And over time, we've given back over $2 million into the community,” McLaughlin says.

On Old Mission alone, the track club just last year donated $10,000 for improvements to Pelizzari Natural Area and tens of thousands more for improvements to trail initiatives, the track at the Old Mission Peninsula School and more over the years. The fee increase is enough to impact the track club's giving on the Peninsula and beyond.

“As an example, we’ve contributed hundreds of thousands of dollars in scholarships to young people who love to run and are pursuing higher education,” she says. “Last year, total scholarship awards were right around $30,000. So if you think about it, the fee increase here wipes out our scholarship abilities.”

The fee increase also impacts the National Cherry Festival’s 15K and half marathon put on as part of their Festival of Races. Cherry Festival Executive Director Kat Paye says they decided to absorb the cost, which for them will jump from about $800 to $4,000, but they hope to not do so going forward.

“We want to talk to (the township) about these fees, because they did not go out to the event organizers and tell everyone,” Paye tells The Ticker. “We read about it like everyone else in the meeting minutes and when it was published that the application and per participant fees were increased.”

Like McLaughlin, Paye wants more answers.

“What’s the reason for the fees going up? And is there a cap, or is it just going to keep going?” she says. “Because that’s a pretty substantial increase from one dollar to five.”