OCEAN CITY – Almost a quarter of the new year has already
passed but when it comes to the yearly cycle based around the town’s budget,
it’s a over halfway through the fiscal year.
At the Mayor and City Council meeting on Monday, Finance
Administrator Martha Bennett gave a presentation to the council updating it on
the town’s finances.
Currently the town faces a projected deficit of $1.5
million but is expected to lower to it to approximately $500,000 by fiscal
year’s end, an amount that is less than what officials originally expected due
to a combination of revenue the town has already received, Bennett said.
“The biggest revenue source is property taxes,” she added.
“Room tax is 7 percent above what it was last year and we anticipate for the
first time this year to receive over $10 million in room tax receipts for the
That kind of revenue is something Bennett said she
believes is a good indicator of how well the fiscal year is going. She also
said at this point in time, the city’s revenues were at 86 percent of the
budget and expenses 65 percent.
Before officials begin preparing for the next fiscal year,
Bennett said the town must look at where the fund balance will be. Last year it
ended with a balance of 12.4 percent, a good figure according to Bennett.
However, since officials are expecting a deficit this year, the balance is
predicted to be around 11 percent.
“We are trying very hard to stay at this goal, it helps us
meet our cash flow needs when we transition from one fiscal year to the next,”
she said. “We have it for emergences as well as any unanticipated expenses you
may appropriate during the year.”
On the downside, there were some concerns with the golf
and airport funds, Bennett said. As of March 1, they each had deficits that
required advances from the general fund to meet their cash flow.
“We do expect their balances to improve over the next
several weeks, particularly the golf course fund as they have a lot of business
in the spring,” she said.
The one thing no one enjoys hearing about is debt.
According to Bennett, Ocean City currently owes $82 million in debt, 41 percent
of which is due to water and wastewater projects and 24 percent of which
included building improvements within the city such as City Hall and the Public
average interest rate on the debt is holding at 4 percent and according to
Bennett, half of the debt will be paid off by 2014, with the town being
entirely debt free by 2026.