OCEAN CITY- Ocean City officials this week put off approval of bid process for as many as 26 parcels for beach equipment rental franchises in order to determine if the current and potential bidders are current on their state amusement tax.
The Mayor and Council on Tuesday had before them a request to award beach equipment franchises for 26 of the 34 parcels up for bid in the current cycle in the south end of the resort. On December 3, a live auction was held for 26 of the 34 south end beach parcels. The other eight were eligible for renewal at 10 percent above the first-term annual amount.
However, before what appeared to be a routine housekeeping measure, a question was raised about whether or not the successful bidders were current on their amusement tax payments to the state. Councilmember Dennis Dare broached the subject and suggested the issue be tabled until the tax status of the bidders could be ascertained.
“Are the franchise bidders and holders all current in their amusement tax?” he said. “My understanding is some franchisees were not current on the four-percent amusement tax.”
Finance Director Martha Bennett explained the franchise holders pay the four-percent amusement tax directly to the state and that the town isn’t always privy to the tax status information of the potential bidders for the beach equipment rental franchises.
“The bidders and franchisees pay that directly to the state,” she said. “I would hate to hold up this process for information we might not be able to get.”
Councilmember Margaret Pillas agreed the town should look into the amusement tax status of the franchise holders and bidders before approving the parcel awards.
“Give it a week and try to find out that information,” she said. “We’re just trying to be accountable to the public. We want to do business with people that are able to pay their bills.”
With that said, Dare made a motion to not approve the beach equipment franchise awards until information about the status of the amusement tax payments for the bidders was determined. The motion passed 4-2 with Councilmembers Brett Ashley and Joe Mitrecic opposed.
“If we have franchisees that haven’t been paying, we need to look into that,” said Dare. “I’m not going to vote to approve a bid for a franchisee if they’re not up to date.”
Mayor Rick Meehan asked if the same standard should be applied to bidders for various other services. He suggested City Solicitor Guy Ayres look into the possibility.
“If that’s going to become a requirement, is it something we should put into code?” he said.