Budget Amendment Reflects Fund Increases

OCEAN CITY – Good news for Ocean City’s bank account as a final budget amendment was passed on first reading that reflects mostly increases in different funds.

Last week Budget Manager Jennie Knapp advised the Mayor and City Council of changes affecting Ocean City’s fiscal year budget since the first budget amendment was authorized. The amendment was passed on first reading this week and is scheduled for its final vote on Sept. 17.

According to Knapp, the General Fund revenue estimates were better than anticipated, especially in room tax collections.

Knapp explained that for the second half of the fiscal year an additional $1.4 million was approved from the fund balance to partially offset allocations for the Art League building, street paving, the 4th Street parking lot improvements and the golf course irrigation system repairs.

“The reason I didn’t have to take an additional $1.4 million out was because of the savings on the expense side and because the revenue estimates came in over budget,” she said. “So the bottom line is we are taking an extra $500,000 out of fund balance.”

The second budget amendment also covers supplemental funding of the pension plans already approved by the council, expenses from Hurricane Irene and the recognition of grants and donations since the first budget amendment. The amendment increases the general fund by almost $2.4 million.

The category of Other Taxes increased by $472,000 mostly due to room tax, which was up 14.5 percent in May and June, and 6 percent for the fiscal year. The original estimate was $11.5 million for the year and $12.5 million was actually collected.

Under Licenses and Permits, building permit fees were up $88,000 over budget over the fiscal year. Cable franchise fees and taxi medallion fees were also both up. There was $40,000 recognized in stormwater mitigation fees and was transferred to the airport to cover a recent landscaping project as an approved use of stormwater mitigation funds.

The most significant source reflected in Grant Revenue is a Maryland State Tourism grant received for $340,000. There was also an additional $196,000 in county ambulance and fire grants received, which is given to the city based on a formula and the number of runs the Ocean City EMS performs.

Also in this category, was the reimbursement Ocean City received for Hurricane Irene in the amount of $105,000, and public safety grants and reimbursements for police programs in the area.

Under Service Charges, $100,000 was recognized in parking, Winterfest, recreation, fire marshal revenues and beach stand franchise fees, all increases as well.

The General Fund expenditure changes reflected around $660,000 in grants, $254,000 for Hurricane Irene that was not covered in the reimbursement, $63,000 in donations, $664,000 in additional pension funding, $300,000 for public safety worker's comp and $1,198,000 for capital projects, which is mostly due to projects funded from bond issues.

There was also, $160,000 of transfers to other funds, which includes $40,000 to the airport landscape project, $200,000 to the golf course and $60,000 to transportation.

Between revenues and expenditures, the budget amendment recognized an increase of $5,041,559 in the Wastewater Fund, $155,807 in the Municipal Airport Fund, $200,000 in the Municipal Golf Course Golf Course Fund, $344,612 in the Vehicle and Equipment Trust Fund, a $300,000 increase in Risk Management, and $19,203,274 in the Capital Project Fund due to the general fund contribution.

The budget’s Transportation Fund recognized that municipal bus passenger rate and bus pass revenue were under budget by almost $236,000.

“Fiscal year 2012 was the first year we had the increase in bus fare, and when we did the budget we made an estimate of what we thought we were going to be bringing in for that and as it turned out more people chose the $1 fare than we had anticipated,” Knapp said.

To help offset the decrease, there was operational savings and the Boardwalk tram revenue exceeded estimates bringing in $64,000, plus the additional $60,000 from the General Fund, resulting in a final decrease of $112,000.

Knapp said at first she thought the decrease in the transportation fund would be about $300,000 but by spring the passenger rate was up and the bus advertising campaign kicked in raising the revenue.

Other decreases were $113,355 in the Water Fund, $325,160 in the Convention Center Fund, $24,876 in the Information Technology Fund, and $262,351 in the Service Center Fund.