OC Council Narrowly Votes Against Fee Increases

OCEAN CITY – For the second time in two years, the majority of the City Council vote down an increase to license fees.

Finance Administrator Martha Bennett requested the Mayor and City Council consider a 2-percent increase to room, business license and noise permit fees.

“This is a practice that we have had in the past decade of bringing forward small increments in rate changes to be presented to the Mayor and City Council,” she said. “The fee structure for licenses will take effect May 1 and for rooms and businesses on June 1 for the summer of 2015.”

According to Bennett, the license fees were last increased by 2 percent in 2009, as well as a 2-percent increase in 2005 and 2007. She last requested the same of the Mayor and City Council in 2013 but the council voted the request down.

If passed, the 2-percent increase would result in a $36,600 increase in revenue per year, or $18,300 for each 1-percent increase in rates.

Councilman Matthew James questioned the reasoning for the increase.

“Generally, it covers the costs of handling licenses, administration and the Noise Board, which involves the labor of police and inspectors in various departments of the city, so those cost pays for itself and not directly on the property tax rate,” Bennett explained. “Over time when there is incremental changes in cost, such as salaries and cost-of-living adjustments, or any impact on the budget we from time-to-time increase service fees so that they cover those expenses on their own and not result on the property tax.”

According to Bennett, the town has experienced increases in wages and other costs since 2009.

“We try to make small adjustments instead of having large jumps every 10 years,” she said. “Typically we would have raised this in 2013, and I requested to raise it but the council chose not to. This is the same incremental increase that was originally requested keeping it at a modest 2 percent.”

Councilman Wayne Hartman questioned how the cost of license fees compares to the cost of operation and where license fees currently stand, to which Bennett responded there is a slight surplus.

“It is not just the Noise Board itself, but it is also the officers that respond to noise complaints, and that is one area that receives a lot of attention. It is very important to our residents that we have units that are prepared to address those concerns. That is also handled by the Fire Marshal’s Office and the building inspectors that handle this jointly,” Bennett said. “This also includes any other costs to regulate businesses over the course of a year.”

Council President Lloyd Martin stated his opposition against the increase.

“It affects everybody when you raise the business licenses,” he said.

Hartman agreed.

“One thing we have to remember as a council is when we pass fee increases that cost gets passed onto the consumer,” he said. “If we are already operating on the positive side of revenue with a surplus at this point, there is no deficit, and have a reasonable comparison then it is hard for me to vote for an increase with those three issues in mind.”

Council Secretary Mary Knight was in favor of the increase.

“I recall when you first requested this a couple years we looked at comparable [to other municipalities], and we were mostly very close or lower,” she said. “I have no problem with 2 percent when we haven’t had a raise in six years.”

The council voted 3-4 to approve the 2 percent fee increase. The motion died with Council members Dennis Dare, Tony DeLuca and Knight in favor, and Hartman, Doug Cymek, Martin and James in opposition.