OCEAN CITY – Beach franchise operators will now be seeing tighter restrictions on late fees and stronger penalties for failure to meet payment deadlines.
At a regular session of the Mayor and Council Monday night, the City Council unanimously passed, on second reading, the ordinance outlining the changes to beach franchise operations.
Several weeks ago, the Beach Mediation Board presented the Mayor and Council with a recommendation to enforce stricter punishments for continuous late payments. As a result of problems in the past with late payments, the Beach Mediation Board made the recommendation to add a penalty to unpaid franchise fees when an operator fails to make timely payments.
The City Council agreed at that time to heed the recommendation of the Beach Mediation Board and enforce the proposed fines and penalties. The aim is to provide a financial penalty for beach stand operators that fail to meet payment dead lines.
The board recommended to the Mayor and Council that a penalty of 5 percent of the unpaid balance be due if the payment is made within one to seven days of the due date. A 10-percent penalty of the unpaid balance will be required if the payment is made within eight to 14 days of the due date. The board suggested that payments pending beyond 14 days of the due date would require a hearing before the Mayor and Council.
The recommendation was taken into consideration and presented to the Mayor and Council in ordinance form a couple weeks ago and passed on first reading.
The ordinance states that, “Any franchise may be immediately revoked upon the non-payment of the franchise fees when due, unless the time period is extended by the Mayor and City Council upon the franchisee’s written request prior to the payment due.”
If the written request is approved, then the payment of an extension fee of 5 percent of the unpaid balance is due if payment is made within one to seven days of the due date or 10 percent of the unpaid balance if the payment is made within eight to 14 days of the due date. If the balance due and the extension fee are not paid by the 14th day following the due date, then the council will be allowed to cancel the franchise and begin debarment proceedings. The ordinance also calls for the council to show relief based on any circumstances or good cause shown by the franchise.
The council voted unanimously, with Council President Joe Mitrecic and Council member Lloyd Martin absent, to pass the ordinance on second reading.