OC Starts Cutting Costs, Trimming $1.4M From Budget

OCEAN CITY – Town government is going on a spending diet, and started it off strong by trimming the fat of $1.4 million from the budget on Wednesday.

City Manager Dennis Dare said that Ocean City is in need of a “lifestyle change” in lieu of the economic downturn that faces the town and country “for at least 3-6 years” and brought a large number of cost reduction measures before the Mayor and Council at Wednesday’s work session.

“We’ve got to find a way to do things less expensively. We are preparing for the worst and hoping for the best, but until we know where this economy is going to go, we have to reengineer what this town does, and how we do it,” said Dare.

The presentation featured 30 cuts to “the low hanging fruit in the budget”, which includes cutting the Seaside 10 race, several summer concerts, town employee perks, travel and training, and reducing the number of police cruisers on Coastal Highway by making officers ride two to a car and increasing bike and segway patrols.

The council unanimously approved Dare’s first round of cuts and encouraged him to come back to each meeting with more until, according to Councilman Jim Hall, “we see how bad things are going to get.”

With a hiring freeze already implemented by the town, which currently has 25 positions available, freeing up about $680,000 in salary, Dare outlined the need for more cuts, especially since the assessments for the upcoming fiscal year look bleak. Property assessments are projected to be reduced by 13 percent or by $1.3 billion, which equates to $5 million less in tax money.

“This $5 million equates to about four cents on the tax rate, so it will create a constant yield increase from 38 cents to 42 cents,” said Dare who added, “when rates go up, it’s over a three-year cycle, but when they drop, they drop off a cliff all at once in the first year.”

It was projected in Dare’s report that by fiscal year 2010 there would be a $7.7 million decrease in revenue and a $3.8 million increase in expenses.

For fiscal year 2010, cost of living could go up $2 million, health insurance could see a 7-percent increase, unemployment spending could soar $100,000 and energy consumption costs could go up $215,000, according to the report.

“These cuts will reduce your costs for FY 2009 and that will help you get ready for what potentially could happen in FY 2010,” said Dare.

Many of the cuts on Dare’s list seemed to start right at City Hall, included reducing the travel and training of town employees, equating to about $190,000 in savings, an 80-percent recall of town-issued pagers for employees, saving about $9,000, as Dare said the town employees will utilize text messaging capabilities rather than use the rather outdated pagers. The town cancelled its car wash contract ($12,000), eliminated the mayor-issued Christmas gift cards ($16,000), reduced take-home vehicles permitted by the town and thousands of dollars in office furniture that was planned to be purchased will be nixed as well as the annual legislative reception has been postponed.

The town will look into greening itself as well with its sites set on smaller and more fuel-efficient town vehicles, as well as the “buddying-up” of police officers to “two to a car.” Dare noted that most calls require backup for the arresting officer, so this way, there’s already backup there.

As far as cuts that will directly impact the townspeople, the Seaside 10 race, which costs about $35,000 to put on, has been criticized for its low turnout and has been cut along with the “not well attended” Jamboree at the Park concerts in the afternoon before the July 4th fireworks.

“We aren’t getting rid of the fireworks,” said Dare, “but we are reducing the scope of its size and that will save us about $11,000.”

Labor Day beach concerts will be reduced from two to one, saving $4,000 and the Sunset Park shows have been discontinued. The “Sea for Yourself” guide’s fate is in limbo as this year’s bid for the publication was put on hold by the council to reevaluate its importance and necessity. The same went for the Recreation and Park’s publication “Splash”, copies of which will be reduced, thus saving another $4,000.

Off-site recruitment for the beach patrol will be limited to two sites, saving $21,000, after the patrol was fully staffed this past summer, and projects about an 80-percent return rate. Certain capital projects had already been decided to be shelved by the council earlier in the meeting, and it appears that Dare’s first round of cuts won’t be the last, as the meeting was stopped short before he even addressed his mid-term and long-term plans for cost cutting measures.

“We endorse your first round of cuts and we hope you will bring us more, said Councilman Joe Hall, whose thoughts were shared by Mayor Rick Meehan.

“We don’t want this to be a fad diet, and as soon as the diet ends, we put the spending weight right back on,” said Dare. “Hard times are already hitting locally and this is just the low hanging fruit in the budget. This problem is not going to go away any time soon.”

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