Ocean City Today
https://oceancitytoday.villagesoup.com/p/1695581

Council considers $105M in financial plan

Resort officials have yet to decide which projects are priority in imminent future
By Katie Tabeling | Oct 12, 2017

(Oct. 13, 2017) Although the Ocean City Council went into a meeting Wednesday to decide which capital improvement projects it would include in a five-year plan, the discussion instead turned to the unanswered question of how to pay for them.

“We have to get more data back to you before we can start making decisions today,” City Manager Doug Miller said.

In a three-hour meeting, several department heads gave the City Council an overview of the $105.15 million in projects named in the capital improvement plan. Some of those projects were already planned for, like the Public Works Campus at 65th Street at $29 million and a new downtown tram storage facility at $3 million. However, most proposed items were ideas that officials decided to put off for later discussions.

Some of the line items on the list had no cost estimates attached, since they would require a closer look. A proposal to bury utility cables on side streets was one such item, and City Engineer Terry McGean explained that price tag would depend on which utility companies and streets were involved.

Replacing the Boardwalk trams was also not included in the discussion, as the two bids “did not come in well,” Miller said.

Also on the table was whether the city’s fund balance (rainy day money) ought to be increased from 15 percent of the general fund to 20 percent in the wake of this year’s active hurricane season.

Doing that, along with debt service on the city’s current bond, as well as the immediate costs of the Public Works projects, would mean $14 million more in spending before adding any other projects.

Councilman Dennis Dare cautioned against thinking that the council was limited in terms of revenue, as there is always the option of raising property taxes.

“We’re trying to see what it takes to reach our vision of Ocean City, but it seems like we’re capped based on not increasing the tax rate,” he said. Dare added that although holding the line is responsible, the city may have gone as far as it can without taking another look at the tax rate.

Budget Manager Jennie Knapp, who said increasing the water and wastewater rates would help, agreed that it could be time for the council to change its no-tax-increase mindset.

The last decade, the operating budget has stuck to the constant yield rate, which means no appreciable budget growth. In the fiscal year 2018 budget, property taxes were set at 46.56 cents per $100 assessed value.

“We’ve been told what the tax rate needs to be and to figure it out. We have, but that’s led to this list of things that aren’t done,” she said as she waved the capital improvement plan in the air. Knapp went on to say the council should see what jobs must be done, assess the city’s financial situation and then adjust accordingly.

After a moment of silence, Councilman Wayne Hartman objected.

“I know I’m not willing to raise the tax rate. We need to look at other revenues, whether it’s parking meters or room tax,” he said. “Our competition, West Ocean City and Delaware, is tough.”

“Revenue from taxes is half the general fund,” Knapp responded. “Anything you increase would bring in a little, but it won’t have the same impact. A penny on the tax rate is $850,000.”

The mayor and City Council will reconvene in two weeks to discuss the capital improvement plan.

Some of the proposed items for the capital improvement plan are:

• Renovating and relocating Fire Station 3 from 74th Street to 65th Street at $3.5 million.

• Citywide security improvements at approximately $500,000 over a five-year period.

• The design and construction of the Public Works complex at 65th Street at $29 million. Ocean City will pay $11 million and the state and federal government will cover the remaining amount.

• Caine Woods street improvements, including widening the sidewalks and landscaping, at $2.6 million.

• Street paving at $14 million over a five-year period.

• Improvements to Baltimore Avenue, which include burying utilities and installing new sidewalks. This line item is estimated at $3 million in fiscal year 2022.

• Improvements to the Third Street recreation complex at $3.5 million.

• Renovations and possible expansions to the Ocean Bowl Skate Park at $820,000.

• The Life-Saving Station Museum’s annex funding request at $2.5 million. City officials believe that figure is underestimated.

• Canal dredging at $2.5 million

• Repair or replacement of the Chicago Avenue bulkhead at $2 million.

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