Council Adopts Budget on 1st Reading

OCEAN CITY –The Mayor and City Council was presented with the first reading of the 2009 budget Monday night, with the City Council voting six to one to approve the roughly $80 million budget on first reading.

Ocean City’s proposed budget for fiscal year 2009 showed an increase in revenues and expenses, with revenues increasing from $75 million in 2008 to $80 million. Expenses also reflect an increase, from $69 million in 2008 to a proposed $74 million in 2009. The first reading of the budget presented Monday night shows a balanced general fund budget at $80.4 million.

The town will be absorbing increasing insurance costs in 2009. Employee health premiums will raise 12.22 percent to $550,000, in fiscal year 2009. To offset increases, employee co-pays will increase and generic prescription use will be encouraged. Town employees will also be seeing a two percent cost of living increase. The economy will also affect employment growth in FY09. No new employees are slated for the 09 budget, due to economic uncertainties.

The FY09 proposed budget showed $1 million in capital improvements for items such as the bulkheads on South Ocean Drive, Old Landing and Robin Drive, design services for canal dredging, and a new uninterrupted power source for the Public Safety Building. The budget approved Monday night shows total revenue and expenditures at $872,580, with monies dedicated to the South Ocean Drive Boardwalk, reserve for future capitol projects and the underground utility fund.  

Advertising will double from $1.7 million to $3.6 million this year, with funds coming from the room tax increase from four percent to 4.5 percent. Roughly 1.4 percent of the gross room revenue will be dedicated to tourism in FY09, as approved last year. Around $5.7 million will be dedicated to economic development and tourism in FY09.

The FY09 budget will lower the existing property tax rate of 41 cents per $100 of assessment to 39.5 cents, so revenue can be maintained to balance the budget. Several residents spoke against the tax rate change Monday night, pointing out the ever-increasing property taxes in the resort.

Mayor Rick Meehan also noted Monday evening that no discussion has occurred as of yet regarding tax credits for amusement parks in the resort. As a result, those figures are not included in the FY09 budget.

The council voted six in favor, with Council member Margaret Pillas in opposition to approve the budget on first reading.

“I am in agreement with reducing the tax rate by two cents,” said Pillas in opposition. Mayor Meehan suggested Pillas show exactly how that could be achieved by second reading of the budget, pointing out the already tight budget.