Blizzards Will Bust Some Budgets, While Boosting Other Bottom Lines
Another foot of snow is expected to fall over the next day or two, blanketing the Mid-Atlantic region, according to AccuWeather. Back-to-back snow storms are the last thing cash-strapped businesses and state and local governments need right now.Maryland has so far spent $57 million of its $60 million budget for snow removal. In Pennsylvania, the state has spent $131.9 million of its $245 million budget for the entire winter. And snow removal costs have topped $3.9 million out of the $4.4 million budgeted by the state of Delaware.
Individual counties and cities are faring even worse. Officials from Philadelphia estimated their costs at more than $6 million, according to Fox 29 Philadelphia. The city of Baltimore, which is facing a $130 million deficit, is also being squeezed by the storm. And the city of Wilmington, Del. easily blew through its $240,000 snow removal budget, forcing the official hometown of corporate America to dig into its reserves to fund the shortfall. Wilmington will try to recoup the funding through the Federal Emergency Management Agency.
"All of that money was spent in December," says John Rago, a spokesman for the city of Wilmington. "Regardless, the work has to get done." (Wilmington hopes to recoup some of the funding through the Federal Emergency Management Agency.)
A Silver Lining in a Snow-Blasted Landscape?
Yet, blizzards can also be like frozen pennies from heaven for some businesses.
"All of our inventory has disappeared faster than concert tickets," says Jon Hoch, owner of Power Equipment Direct Inc., an online dealer that expects surging sales of snow blowers to boost revenue this year by 50%. "We have this beautiful Web site that it in a day or two won't have anything left to sell."
Some cab drivers are taking advantage of the situation. According to AOL News, one traveler heading to Reagan National Airport said a cabbie tried to charge him a "$100 snow fare."
Conditions could not be better for Pennsylvania's Jack Frost Big Boulder ski resort. Its key market in the Philadelphia area has had a snowy winter, which has put people in the mood to play outdoors, says Michael Cleren, a spokesman for the resort.
"We are set for record numbers in the next 10 days," he says, adding that business is strong and the groundwork has been laid for a "really strong March."
For food retailers, these are also busy times. The snow storms have forced Wawa, which operates 572 convenience stores in five states and prides itself on staying open during inclement weather, to make sure that its stores are well stocked and adequately staffed, says Sal Mattera, the chain's operations chief.
Even though snow removal crews and first responders throughout the region will be snapping up Wawa's coffee and hot soups, the storm will likely not be a big money maker for Wawa. The store must pay overtime and keep the parking lots plowed -- costs that can really add up.
States of Emergency
Nothing about this winter is typical. One radio talk show host has dubbed the blizzard "snowmaggedon." The joke, though, underscores the worries that local and state officials have about paying for Mother Nature's unusual one-two punch.
Officials in Arlington County, Va., outside of Washington D.C., already blew through its snow removal budget in January, says Aileen Winquist, a county environmental planner. The Virginia Department of Transportation has spent $79 million it had budgeted for the winter and is currently tapping a $25 million reserve fund.
"We are certainly operating in a deficit situation," says VDOT spokesman Jeffrey Caldwell. "Right now we are we are doing what we have to do. ... We will not know for some time what money the Federal Emergency Management Agency will grant us to recoup. "
Steve Chizmar of the Pennsylvania Department of Transportation says that the Keystone State has more than enough road salt but still faces plenty of other costs such as overtime for the weekend storm. Cherry Hill, N.J., a suburb of Philadelphia, for one could use some help.
"This is going to be a significant challenge for the Township of Cherry Hill," says Dan Keashen, a spokesman for the municipality, which had budgeted about $500,000 to clear snow from its 226 miles of roadways. "It would go along way if (New Jersey) Gov. (Chris) Christie were to declare a state of emergency. ... In a snow event like this it's all hands on deck."