City Manager’s Budget Retains Same Tax Rate In OC

OCEAN CITY – As the Mayor and City Council and staff officially enter into fiscal year 2012 talks, City Manager Dennis Dare explained that Ocean City is above other surrounding jurisdictions in keeping its cool during this tough economic time.

“A great deal has been accomplished to ‘right size’ our operations since the recession began in 2008,” Dare said during Monday night’s Mayor and Council meeting.

Ocean City has implemented a hiring freeze, offered retirement incentives and reorganized departmental structure to reduce its workforce. Operations such as solid waste and transportation have been changed in attempts to reduce costs while maintaining the same service to residents and visitors.

According to Dare, in the last 10 years Ocean City has reduced its real property tax rate by 23 percent. Worcester County has reduced it by 4 percent and the state of Maryland has increased its rate by 33 percent. Dare’s proposed budget keeps the tax rate the same, which is 39.5 cents per $100 of assessed valuation. The tax rate is slightly below the Constant Yield Tax Rate of 39.58 cents. Ocean City’s net assessable real property base fell only 0.2 percent from $10.3 billion to $10.28 billion in 2011.

Summer season room tax grew 5.5 percent, food tax 1.8 percent, parking revenues 8.5 percent, and beach franchise bids for downtown are up 35 percent. Payroll has been reduced 8 percent in the last two years. Expenses have been reduced by over $7 million in the last two years and have been sustained as well, according to Dare. The fund balance has grown above the town’s goals and is being used to pave roadways for the first time in two years.

New revenue added to this year’s budget is from the casino at Ocean Downs and has added approximately $600,000 to the Capital Improvement Fund for infrastructure improvements if the town decides to allocate the funds in that direction.

The council has made recent changes in deferred compensation contributions and salary scales for new hires. The budget does not include pay raises for town employees. Currently, retiree health care is budgeted at the current level and does not provide for either the elimination for new hires or for a soft cap unless the new ordinances concerning retiree health care are amended to include a soft cap.

“The town has survived in the 2009 recession more successfully than many other resorts due to our location, the impact of our advertising and promotional campaigns, and the recognized value of Ocean City as a vacation and second home destination in the mid-Atlantic region,” Dare said.

According to Dare, Ocean City has more room to improve economically in the years to come by emphasizing and maintaining policies that strengthen the value of real property and business in town by supporting the business community with advertising and promotions year round, continuing town services that meet resident and visitor expectations, maintaining and improving the beach and infrastructure with investments in the Boardwalk, streets, and utilities, and by providing employee wages and benefits that are financially sustainable and adequate for employee recruitment and retention.