OCEAN CITY – The first official amendment reading of 2009 dealt with what will no doubt be the largest challenge facing Mayor and City Council this year: the budget.
Ocean City Budget Manager Jenny Knapp gave the first reading of the amended FY09 budget for the town of Ocean City on Monday night at City Hall, tweaking several projected figures on both the revenue and the expenditure side of the page.
Knapp figured in over just over $1.05 million in projected revenue increases and over $984,000 in revenue reductions thus altering the budget for an additional $70,000 from the original adopted FY09 budget.
“Most departments are within budget thus far, and police salaries are under budget by $80,000 and police overtime is under budget by $50,000. EMS overtime is over budget I’m confident that the amendments that [Fire Department] Chief Larmore proposed will bring that number down”, she said.
On the revenue expenditure side of the coin, the biggest decrease was that of the room tax revenue as Knapp lowered the figure by $335,000 despite a half percent raise in the room tax last year from 4 percent to 4.5 percent.
“We have received actual room tax from July through November, which historically represents 62 percent of the total number we will receive for the year,” she said. “We are currently 2.5-percent under the adjusted actual budget from last fiscal year. Since we’ve collected almost two-thirds of what we will collect from the room tax this year, I’m reducing the annual estimate by 2.5 percent or $335,000.”
This decline in room tax revenue directly impacts the money available for the advertising budget as Knapp lowered the money available for town advertising by almost $112,000.
“With the reduction of the room tax at $335,000, I was only able to offset the reduction by $112,000 so I used the fund balance to offset the difference [which is $223,000],” said Knapp.
Additional reductions made in the amendment include $190,000 in parking revenue, $150,000 in interest investments and $100,000 in building permits, amongst others.
On the revenue increase side, an additional $400,000 was figured in from property taxes, summer concerts were projected to bring in an additional $100,000 as well as almost a $100,000 in donations to the town, including $90,000 for the Boardwalk bench program alone.
Mayor Rick Meehan said Thursday alterations to the budget numbers weren’t that surprising.
“Considering what’s transpired so far this year, I think we’ve fared pretty well when compared to other municipalities and the changes made were pretty much par for the course. Realistically, we are in pretty good condition,” said Meehan.
Knapp alluded during the first reading that some additional alterations might be made before the required second reading of the amendment.
“I may have to adjust fuel costs before the next reading. Though fuel has decreased, our largest fuel consumption was when fuel prices were at their highest,” said Knapp.
Meehan emphasized that “the revenue estimates were made over a year ago and we were down as far as visitors go this year, so there is a ripple effect, so the necessary alterations had to be made.”
Meehan said that the budget will be dealt with in a “conservative but realistic” point of view and he and the City Council will “strive to at least meet the levels achieved last year,” despite the current state of the nation’s economy.
“We will try to reduce our expenses, but in doing so we don’t want to make cuts that will reduce our revenue either. That would be counterproductive,” said Meehan.