OCEAN CITY – Good news for the taxpayers of Ocean City as this year’s budget was amended this week to recognize an increase in revenue and significant savings.
“We had some really good revenue,” Budget Manager Jennie Knapp said.
Knapp said one of the most important things to recognize is that room tax is up an additional $385,000 above the estimate for this year, which goes toward the advertising fund. Through the additional revenue, the town has been able to reduce the advertising funds estimated to taken from the fund balance.
The budget amendment allows for $1.7 million to be subtracted from the fund balance to use on capital projects such as street paving, repairing the transfer station floor and the repairs on the roof of the building at Northside Park.
“So between an expense savings and recognition of revenue, we have a million dollars to the good, which I think is a really good thing,” Knapp said.
Additional revenue that was not incorporated into this year’s budget came from the new Ocean Downs casino in Berlin. Knapp explained that at the time the budget was being worked on it was unknown when the casino revenue would take effect, or what percentage of the casino’s revenue Ocean City would receive. The town has received almost $225,000 from the casino’s revenue.
“We just aired on the side of caution and didn’t put anything in so that worked out really well,” Knapp said.
On top of the underestimated room tax revenue and the plus of the casino revenue, Ocean City also received a $322,000 tourism grant this year, which was added in the budget amendment.
Another significant savings comes from the convention center. Between the convention center’s savings in maintenance cost and energy, it also exceeded its expectations in revenue as well.
“The combination of that allowed us to take less money from the general fund to fund the convention center, a reduction of $133,000 in their funding,” Knapp said.
Knapp explained that the convention center doesn’t break even and the annual operating loss is split 50/50 between the Town of Ocean City and the Maryland Stadium Authority. The original budget allocated about $1.5 million from the general fund to the convention center.
“We reduced our general fund contribution, or taxpayer contribution, to $1.4 million in this budget amendment equaling a savings of over $100,000,” Knapp said. She added that it also saved the Maryland Stadium Authority $100,000.
Another change made was in the transportation fund. Knapp said the revenue budgeted from the recent bus system fare increase didn’t meet expectations because it wasn’t instituted as early as projected and there was a loss in ridership. On the other hand, the town was able to cover that loss.
“We didn’t have to give the transportation fund any more money, which is also very significant,” Knapp said.
There were other miscellaneous items that made a difference in higher than expected revenues. For instance, cable TV, taxi medallion transfers, and donations made out to the Boardwalk and the police department’s mounted unit.
“The bottom line is we didn’t have to use as much out of the fund balance as we thought,” Knapp said.