OC Looking For New Revenues, Cutting Costs; More Paid Parking, Trash Collection Fees Weighed; Bus Service Could Get Reduced

OCEAN CITY – With budget season in full swing, the Mayor and City Council heard about a number of opportunities to increase revenues and/or decrease expenditures, including additional parking revenue, solid waste funding alternatives, transportation service reductions and a stormwater utility.

First, City Engineer Terry McGean tackled alternative revenues in parking starting with reviewing surface lots that are currently free to park in, such as City Hall.

A couple years ago, the Mayor and City Council voted to remove paid parking in City Hall’s parking lot during off-work hours, weekends and holidays. To reinstate paid parking in the lot would generate approximately $17,500 in revenue, according to McGean.

McGean recognized the Public Safety Building parking lot on Coastal Highway as a potential paid parking lot, except for a number of spaces that will be dedicated to the District Court. There are 200 parking spaces and the potential to generate $20,000 in revenue to charge for parking during off-work hours, weekends and holidays, he reported.

There is a gravel parking lot on 64th Street where city employees and city buses park. The lot is planned to be used for boat trailer parking once the new boat ramp near that location is completed. McGean did not recommend charging for parking in that lot until the boat ramp is complete.

The Roland E. Powell Convention Center offers two options to add paid parking, according to McGean. One is in the main lot and the other is a lot south of Convention Center Drive. A study conducted by the Crossroads firm estimated the main lot could bring in $393,000 from paid parking. McGean did not recommend moving in that direction at this time while the building is under construction.

In the “south lot” there are 354 parking spaces but paid parking in this location would face logistical issues, such as drivers would be prone to park in the main lot where it is free versus parking in the pay to park lot across the street.

“There is some opportunity for us to take advantage of some of the lots, and also supply additional parking,” Mayor Rick Meehan said. “That benefits both our visitors and our residents because then people aren’t parking in areas where residents typically park.”

The mayor voiced support for re-establishing paid parking in City Hall’s parking lot as well as adding the Public Safety Building parking lot. He pointed out the church located next door to the north of City Hall shares parking on Sundays and for special events at the church.

Councilman Dennis Dare spoke with church officials who expressed they are willing to work with the town if paid parking were to be re-established at City Hall. Dare suggested offering the church parking permits to pass out to guests on Sunday mornings or during events, such as weddings.

Councilwoman Mary Knight made a motion to initiate paid parking in the City Hall and Public Safety Building parking lots on the weekends, holidays and outside working hours. The council voted unanimously to approve.

Next McGean moved into current paid parking lots and paid street parking. There are 1,196 Cale meter spaces on both parking lots and street parking in Ocean City. Last year the town raised the rate in those locations and McGean did not recommend a further increase this year.

“When we raised the rate, we saw no decrease in demand. That tells me there is room for additional increases but since we just did it last year we are not recommending that this year,” he said.

McGean added two years ago the rate in the Inlet Parking Lot was increased and there was a decrease in demand. Although the demand has been rebounding, a usage decrease is still noticeable and McGean did not recommend a rate increase in that location either.

“However, we are recommending increasing flat rate charges on the 4th of July,” he said. “What we would recommend would be $50 for the day. You would pay on entry and once the lot is full, the lot is full. We anticipate that would generate an additional $18,000 on that day.”

Meehan pointed out on the 4th of July private properties in the downtown rent out their own driveways and side yards for parking and are charging in excess of $50 and that is just to watch the fireworks. When you look at $50 for the entire day at the Inlet lot, he feels it is reasonable.

Knight made a motion to charge a flat rate at the Inlet lot of $50 for all day parking. The council voted unanimously to approve. Currently the rate at the Inlet lot is $2.50 an hour totaling $25 for the entire day.

The last option when it comes to parking is expanding paid parking on the streets in Ocean City. Currently, on the ocean block, paid parking on the streets in downtown stops at 10th Street. If that was to increase to 27th Street where the Boardwalk ends, which is approximately 888 spaces, it would generate about $400,000 per year.

To take it one step further and expand paid street parking from 28th to 146th streets, or the entire ocean block in Ocean City, that would be 3,294 spaces and generate $1.7 million.

Council President Lloyd Martin recalled in previous discussions of putting meters in front of residential properties the owners would have the option to opt out.

“There is some streets, for instance from 10th to 27th street, there are streets where I know that everybody would say they don’t want it because they have no on-site parking,” McGean said. “So this did not include those but I can tell you what those would be.”

Next, McGean recognized bayside streets where only commercial properties reside would result in 1,183 parking spaces and around $500,000 in revenue. The last area he titled the “low hanging fruit streets” with 346 spaces and $100,000 in potential revenue.

“A classic example is the ocean block on 49th Street, you have the back of the house for the Gateway on one side and the Ocean Pines parking lot on the other side of the street that fills up with Ocean Pines people that are going to the beach during the day … and it fills up with people going to Seacrets at night,” McGean said. “That is a classic street that would seem simple to Cale, but there is some other ones like that I have identified.”

Meehan agreed there are certain streets that will meet little resistance when it comes to installing paid parking. He suggested also looking at streets north of 10th St., such as Washington Lane, that has prime parking spaces at the street ends near the beach.

“Sometimes it is difficult to take that giant leap all at one time … sometimes it is better to look at a way to phase it in in those areas that make a lot of sense and get people to buy into it,” he said.

Dare pointed out resorts north of Ocean City, such as Bethany Beach, Dewey and Rehoboth, all have instituted parking permits on the side streets.

“Going into this, I really want to look at what we can do instead of what we can’t do … there might be a way to give the property owners in Ocean City some kind of permit parking for free but capture the day trippers in paid parking,” Dare said.

Knight reminded the council de Lazy Lizard downtown asked for paid parking on their street to increase business turnover. She added that she has been approached by businesses in the past asking to pay for parking downtown to provide for their employees

“That is something we should ask some of these bayside businesses if that could very well help their business model by adding more of a turnover,” she said.

McGean agreed to return to the Mayor and City Council with a laundry list of available streets and the different options involved with each to further discussion.

The next concept to decrease expenditure was in regards to Ocean City’s Solid Waste division, which currently operates out of the General Fund and is funded by the tax rate.

“The idea is to run this part of our General Fund as a business,” Recor presented. “Go to market, solicit bids, and have our department respond, create a commercial solid waste franchise in Ocean City and in anticipation that we are the low bidder … I know from the research our staff has done that we are so below market rate that we are confident in our ability to maintain the service and still make money. Bear in mind the discussion that we need to have is, does making money with a business component of your operation constitute a tax?”

Council President Lloyd Martin was aware of the public’s concern over the institution of a solid waste fee verses a tax.

“What you might have to break down to the public … is what is the cost for commercial trash pickup and the cost for residential trash pickup … commercial creates more trash than residential especially in the summer time … so you would have to give the residential unit a bigger tax break,” he said.

Councilman Joe Mitrecic added there are citizens who will be concerned over how easy fees can increase compared to taxes.

“Fees can be raised easily whereas a tax rate itself is very difficult number to raise every year, and fees can be done by ordinance during anytime of the year without much notice,” he said.

Knight recognized having Ocean City’s solid waste operation become a franchise is worth further discussion and made a motion for staff to collect information on what direction would be the best decision for the Town. The council voted 4-3 to approve with council members Dare, Brent Ashley, and Margaret Pillas in opposition.

The next option discussed to decrease expenditures is decreasing the town’s transportation service, more specifically the bus system. Public Works Director Hal Adkins explained the FY 14 budget presented includes about a $1.85 million transportation subsidy within the General Fund.

“That $1.85 million subsidy is in fact a lower subsidy then in FY 13, so we are heading in the right direction,” he said.

Adkins presented two “extreme” options in decreasing the bus service. Both options left the service the same in the summer months, May-September, but if the bus service were to be completely eliminated in the off-season, October-April, it would reduce the subsidy by $1.67 million. Another option is to limit the bus service in the off-season to run only Friday-Sunday, which would result in a $1.42 million reduction.

“This is just food for thought … we could go on with multiple versions, we could dissect each week, and every given month with every single special event you have out there to tweak the weeks,” he said.

The last alternative presented was to institute a stormwater utility fee to repair Ocean City’s failing drainage system. McGean states out of $735,000 of “Pay As You Go” projects that were not funded in the FY14 budget, $500,000 was storm drain repairs.

In 2011, the University of Maryland Department of Finance Center conducted a study for Ocean City and its failing stormwater system. The study resulted in a total cost of $12 million over 10 years, or $1.2 million per year, to make the repairs. The study recommended charging $35 per year per equivalent residential unit, or single-family homes and condominium units, and charge commercial properties based on impervious square footage.

At that time, Meehan pointed out the recommendation heavily penalized condominium units versus a hotel.

“One of the reasons it had been set up that way is because of how time consuming it would be to try to figure out the amount of impervious area for every single condomium complex in Ocean City,” McGean said. “What we have been doing over the last year and half is just that … I also looked very hard at the expenditure side of it and how much we can physically do in a given year.”

McGean and staff were able to reduce $1.2 million a year to $750,000 with a fee of $40 per equivalent residential unit, and all condominium complexes, or multi-family would get charged based on impervious area with a cap of $50.

“This is something we need to look into the future for,” Martin said. “I think we need to do it, look at it now, and get those numbers. We need to move forward with it…the repairs need to be done now…it is something worth exploring.”

Meehan thanked the staff for bringing forward the alternatives.

“You are getting us well prepared, but the most important thing is the word used, which is preliminary … this is preliminary numbers for us to take a look at and discuss,” he said.

12 comments on “OC Looking For New Revenues, Cutting Costs; More Paid Parking, Trash Collection Fees Weighed; Bus Service Could Get Reduced

  1. Steve looks like this council going to prove you can do less with more tax dollars. WoW This is what you had in mind for Ocean City tax payer’s. Guess that’s why you moved out of Ocean City.

  2. I like that Dennis Dare is an OC resident that lives and votes here. Too bad we lost him as a city manager as he was far less costly than what the Hall boys put in his place.

  3. Cutting down the bus schedule would eventually lead to more DUI’s and people hurting others because they have no way to travel on vacations during the off season. ( bad move in my opinion)

  4. Rather than eliminate service that some people absolutely rely on, why not use a smaller multi passenger vehicle and charge a higher rate during the Winter? I know there are some elderly residents who have no other way to get to the grocery store.

  5. First of all, Double Dipping Dare should not be on the Council. Boy, is he power hungry!

    Let’s tackle the real issues:
    1. High employee salaries
    2. Too much overtime
    3. Over taxing citizens

  6. How can the city always be crying about being broke? You can’t cut bus service,raise and add more paid parking without driving people away. Everything in OC is top dollar. You’re pricing yourself out of the market.

  7. Double dipping Dare? Thanks to the Hall boys, OC is paying thousands more for a city manager and they almost blew that with an illegal cell phone call. The citizens chose not to continue wasting a Council salary on Hall and put Mr. Dare in his place.

  8. If you cut costs then look for ways to generate revenue – what are you accomplishing? In both cases, you will make folks upset because you end up cutting a service, lets say hmmmmm BUS SERVICE, then decide to add more paid parking.

    Huh? If you cut Bus Services are you not implying you want more folks to drive? Oh I get it – more driving means more parking revenue. Who’s bright idea is that? OC’s roadways are already saturated from Memorial Day to Labor day – which INCLUDES the Bus Service. We all have seen packed buses during weekends and holidays.

    Sheesh – there is so much that needs a fixin, left over from decades of rolling in the dough – where does one start? This isn’t going to be easy and will take more than one summer season and less finger pointing to straighten out. I’m worried that the over abundance of coverage spawned by local/county and even DC media will give the wrong impression that OC is totally out of control (snicker snicker). Wash DC Media picked up a story regarding our Tourism Director (Donna Abbott) looking for a precise measurement of how many tourists visit our City. Finally a new direction away from demoflushing – however this will also take time to iron out. Roughly a 1/3 of our hotel/motel friends provide data – whereas the rest do not. WELL – there is a start IMO. In OC – you need to communicate your occupancy or else! I know I know – keep laughing, but it’s a start!

    This season could be a good one for OC (without the necessary funding resources et al) because our northern friends (NJer’s) will need a close place to vacation given last year’s Sandy. BUT any influx because of Sandy will only be a 1 time instance – or a 1 year anomaly for those with a better education that I! All of our leaders really need to take that into consideration when strategically planning!

    Cutting bus services, leaving driving as the alternative – then adding more parking meters. HAHAHAHAHAHAHAHAHA

    ~BUSHMAN!~

  9. Suervisor Frank, you have been given some wrong info. Dennis Dare as city manager was paid $180,000/year. David Recor the new city manager is paid $147,000/year. cut services, increase taxes & fees, increase salaries that is the work of the big spenders (Meehan, Mitrecic, Dare, Knight & Cymek) voted into office in November. Bad move voters.

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