Joe Hall Says Ocean City Spending Can Be Cut Further

OCEAN CITY — As the first week of budget hearings wraps up, it seems that City Manager Dennis Dare’s “rightsizing” mantra has been replaced with Councilman Joe Hall’s outspoken desires to “cut until it hurts.”

As each line item in the proposed FY 2011 budget gets placed under the proverbial microscope and each town department comes before the Mayor and Council to present their already lean budget proposals for the next year, Hall has seemingly chimed in on almost every department and has been quite blunt in his belief that holding the line on the constant yield tax rate at 40.5 cents per $100 assessed valuation is simply not good enough for him.

“I want to send a clear message that we understand that because of the economy, times have been very tough for people in this town,” said Hall. “That’s why I think it’s responsible and completely doable for us to find an additional $1.5 to $2 million in cuts and actually lower the tax rate.”

Hall’s strategy for finding further cuts in addition seems to weigh heavily toward salary cuts for the town’s employees, as he has pondered the idea of up to a 5 percent trimming of employee salaries.

“Everybody has felt the pain of this economy, and I think that it’s time that the town employees feel the pain as well,” said Hall. “I think it’s responsible to talk about pay cuts rather than have to get to a point where we are talking about cutting jobs or entire departments. If you ask any employee if they would rather take a 5-percent pay cut versus losing their job, I think that they would take the pay cut. I know I would.”

As with any budget process, the Mayor and Council are seeking additional places to trim the budget, but Hall’s outspoken tendencies in the past week have seemingly miffed a few of his colleagues, and although he seems to have an ally in Councilwoman Margaret Pillas, who said last week that she would like to consider cutting salaries for town employees, there are others on the council who think the employees have sacrificed enough.

“At this point, I think throwing out random numbers about cutting salaries is irresponsible,” said Council President Joe Mitrecic. “There are people in the town of Ocean City that think the employees are paid too much, and we are going to look at that at the end when the regional competitive salary study comes back to us. But, to just say you want to cut people’s salaries and try to balance the budget on the backs of the employees is something I’ve never been in favor of. He’s messing with people’s livelihoods with comments like that.”

Dare contests that the employees have already volunteered and accepted huge sacrifices in the last two years, such as the halt of their annual step and COLA increases. He also notes that the town’s workforce is now 86 fewer than last year, and that cutting salaries when employees are already doing more for the same or less money would be a crushing blow to morale.

“We need to do things to energize and stabilize our workforce because we are asking them to do more for less,” said Dare. “If I would have thought that cutting salaries was a good idea, I would have put it in the budget, but I think it’s the complete opposite of what we should do in this situation.”

Mayor Rick Meehan pointed out that last year’s decision to cut the employees’ step and COLA increases cut their pay by more than 2 percent, which essentially equate to almost $700,000 in payroll savings.

If salaries were cut by 5 percent, the savings to the town would be over $1 million.

“I don’t believe with [Joe Hall’s] comments that we need to arbitrarily cut so everyone feels pain,” said Meehan. “We’ve all felt the pain, including the employees of Ocean City. There is always posturing and political statements that are thrown out in the budget process and it’s a good process that we’ve been working on for months now. We are going to go deeper into each line item and try to come out with the best tax rate possible. Do I think that there’s another $2 million in cuts? No I don’t, but I am confident we’ll find responsible cuts for the town, not just arbitrary ones.”

The one number that seems to concern all council members is the 30-percent hike in the town’s health insurance premiums. Dare believes he might be able to trim the number down to about 20 percent, but that added expense still is concerning to the bottom line, and those on the council who are inspecting the proverbial bottom line.

Still, Dare said that if he is tasked by the council to go and find “budget cuts by whatever means necessary”, he says that he has some options, but he isn’t necessarily a fan of those options.

“I have a list of things that could be some further cuts. Some big, some little, and could generate additional savings, but I didn’t include them because I don’t think they are good for the town of Ocean City in any way,” Dare said.

The council praised both the police department and the fire department for substantial trims to their budgets, including a 4.8-percent decrease in the police budget and a huge turnaround in the department’s once problematic overtime expenditures. In addition, the tourism department and the convention center announced a partnership of sorts that would see many of the employees pulling double duty in both divisions, which will enable some positions to be trimmed, an almost six figure payroll savings seen for the budget.

If the first week of budget hearings is setting a precedent for the rest of the process, it seems that each department will present a much leaner budget to the Mayor and Council, mostly due to departmental restructuring and right-sizing. However, if the council follows Hall’s lead and wants Dare to pursue further cuts, they are going to have to consider employee salaries, services like the offseason bus system and the Boardwalk Tram, and they will undoubtedly have to address the rise in health care costs.

Although Hall acknowledges employees have done a lot to put the town in a position to meet the constant yield tax rate, he says some departments haven’t done enough yet.

“What [Public Works Director] Hal Adkins has done to address rightsizing has been totally proactive and very good, but I don’t think that [Recreation and Parks Department Director] Tom Shuster and some of the department heads have done enough to rightsize their departments yet. The majority of people in this town have seen decreases in their businesses and in their incomes and I think we need to share that pain and find a way to lower the tax rate.”