OCEAN CITY – The Mayor and City Council got down to business this week on the upcoming fiscal year’s budget.
“The FY 2013 budget presents many challenges,” Mayor/Acting City Manager Rick Meehan said during Tuesday afternoon’s meeting. “Our goal from the onset is to continue to reduce the cost of government, where possible, and at the same time continue to provide the level of services our residents and visitors expect and deserve. A dramatic decrease in assessments makes the equation difficult but the proposed budget actually decreases the amount of property tax dollars to be collected in FY 2013 and reduces the General Fund operating budget.”
On Wednesday, Budget Manager Jennie Knapp said the property tax rate will stay at the constant yield, which will increase from the current $.395 to $.4685.
“Even though the rate is increasing, the assessments are going down so most of the tax bills would stay about the same,” Knapp said. “We roughly have $40 million in the current year budget that is raised from property tax and roughly $40 million in next year’s budget from property tax.”
Knapp added that for most property owners whose assessments dropped the average of 15 to 16 percent will not see an increase in their tax bill.
Overall, the FY2013 General Fund Budget is lower than FY2012.
“We have continued to reduce full-time staffing, overall employee costs are going down, and the departments have all cut their operating costs in an effort to keep the budget low,” Knapp said.
According to Meehan, salary and benefit costs comprise 60 percent of the General Fund budget. Since FY2009, the number of full-time employees has decreased from 622 to 524, nearly a 16-percent reduction. As group insurance, pension, retiree health, worker’s compensation and unemployment increase, overall employee costs have been reduced $1.3 million.
“We are absorbing state cuts over the last few fiscal years without raising the taxes, as well as absorbing increases in energy costs and fuel costs,” Knapp said.
Meehan stated that since 2009 Ocean City has absorbed state revenue cuts for Highway User revenue and for State Police Aid. This time around the town’s Highway User revenue share was reduced from $800,000 to $130,000, and the State Police Aid has been reduced to $157,000.
The budget does reflect an increase from other revenue sources such as a $400,000 increase in parking revenue, due to the recent increase in rate from $1 to $1.50 per hour. There is also a $90,000 increase in parking revenue from the planned expansion of the 4th Street parking lot.
Room tax has also increased by 2 percent during the current fiscal year, reflecting $12 million for FY 2013.
“We are addressing items that were identified by the Mayor and City Council of being of importance,” Knapp said.
The council has recently voted to adopt a $2 million program for street paving in 2013 and that has been included in the budget as well as the first bond interest payment for FY2012 bonds covering the Boardwalk redecking, the Caroline Street Comfort Station replacement, Fire House reconstruction and maintenance and St. Louis Avenue roadway improvements.
The budget includes a $488,000 General Fund Transfer to the Vehicle Trust Fund to purchase an ambulance and automated trash truck.
“We are still increasing the marketing destination advertising budget in next year’s budget as well because of the funding formula,” Knapp said.
Meehan explained that costs for Contracted Services increased as the destination marketing advertising increased $1.5 million since FY2009 and from $3.8 million to over $5.3 million for FY13.
Something new that is proposed to be funded this year is a firework display and entertainment on New Year’s Eve at Northside Park’s Winterfest of Lights site.
Also, funding to purchase replacement Christmas decorations for the downtown area, which has been dark for the last couple years due to budget cuts, is included in the budget as is a display for the Worcester Street water tower.
“We haven’t actually gotten to the budget where that is included yet so I don’t know if at the end of the day it will be approved, but it is in the special events budget for next year,” Knapp said of the New Year’s Eve plans and the downtown lights campaign.