OCEAN CITY – As the Ocean City budget cruised through the second and final reading unanimously, you could almost hear a communal sigh of relief throughout City Hall.
After what was called “the toughest budget process I’ve ever dealt with in my 26 years with the town” by City Manager Dennis Dare, the City Council approved a $112.6 million budget for fiscal year 2010, after months of heated deliberation, healthy cuts and departmental sacrifices.
“I think this is a really good budget, and we ground it down as much as we could,” said Councilman Jim Hall. “When it comes down to it, this process gets better and better each year because Jennie [Knapp, budget manager] and Dennis [Dare] can explain everything to us down to the very last penny.”
Mayor Rick Meehan was equally pleased with how the months of budget hearings and cuts, which started back in September, panned out in the end, citing the sacrifices made by everyone in the process.
“I think everyone took a real rational look at where we were this year, and realized that it is what it is, and we had to make some tough decisions and sacrifices,” he said.
Despite the poor economy, and a year in which property assessments plunged $1.1 billion, the resort found a way to bring the tax rate per $100 of assessed valuation to 39.5 cents rather than the proposed 41 cents from the city manager.
Although the tax rate is technically raised from last year’s 38 cents, the reduction from 41 cents to 39.5 cents was considered quite an achievement nonetheless.
On Monday, however, there was a slight change to the budget itself, as outlined by Budget Manager Jennie Knapp.
“Since the first reading, I discovered that Worcester County had eliminated the pass through grants ($116,000) to municipalities including Ocean City, and I received a letter from the State Highway Administration decreasing their estimate of revenue for highway user fees next year by about $77,000,” she said.
In order to make up that money, Knapp discovered that she had budgeted for $65 per ton in tipping fees paid to the county for solid waste removal, while Senior Project Manager Dick Malone had reported in the budget savings from a $60 per ton estimate, creating a “wash” according to Knapp, and the additional savings will make up for the pass through money that was eliminated by the county, and the loss in highway user fees as well.
Malone reported that the contract for the solid waste removal by East Coast Resources (ECR) would save the town upwards of $550,000 a year, and that bid award was cited as a way to pay back the $500,000 the town chose not to fund into the retired employee health benefit actuarial in order to get the tax rate down to 39.5 cents.
Meehan said in a phone interview on Thursday that $450,000 of savings from the solid waste removal contract was figured into the budget, and that any additional savings from that aforementioned number would go directly into the general fund and be available to make up the $500,000 needed by next July for the retired employee fund.
The conversation took a turn at one point, notably after Knapp announced that the county eliminated the $116,000 in pass-through funds, as several council members, including Mary Knight and Doug Cymek, asked Knapp to reiterate the exact number that Worcester County has cut from the town of Ocean City this year, which totals almost $300,000.
Some have argued that Worcester County has balanced its budget on the backs of the municipalities, cutting Berlin, Ocean Pines, and Ocean City almost 10 percent across the board, and although there is no law that requires the county to disperse the pass-through-funds they receive each year from the state, Knapp said the county has always done it with the exception of this year.
It should be noted, however, especially if some council members are trying to vocalize just how much the county chose to eliminate this year, that the town’s decision to have their trash removed from the resort by ECR rather than haul it to the county landfill will knock $1.5 million off the county’s budget.
Council President Joe Mitrecic said he was pleased that the budget passed unanimously, but noted that he was hesitant to use the word “done” to describe the budget process.
“It’s a living document, so we aren’t just going to walk away from it now that it has passed,” said Mitrecic. “We still have to find some savings for next year and if we have a good spring like we’ve been having and a strong summer, we might see larger revenues and find other money from additional cuts.”
The town seemingly stayed conservative on many revenue projections and cost saving measures according to Dare, which essentially make any additional revenues, such as in the case of the new solid waste removal contract, which is expected to save the town more than $100,000 than what they budgeted for, be a bit of relief in what is expected to be another rough budget process next year.
In the end, Dare, who along with Knapp received accolades for their work on this budget, said that he was relieved that this part of the process was over.
“I think I might even go out to restaurant week and get three courses for $30, enjoy a glass of wine and help out the local economy,” he said.