OCEAN CITY — After two weeks of lengthy and often tedious work sessions, Ocean City officials on Friday approved the fiscal year 2017 budget at around $122 million for all funds along with a modest tax cut for resort property owners.
The Mayor and Council wrapped up the fiscal year 2017 budget process on Friday morning after nearly two weeks of almost daily work sessions with the various departments and enterprise funds. After tying up some loose ends on Friday, including some requests that had been left out of the spending plan, the Mayor and Council adopted the 2017 budget.
The total budget for all funds is just over $122 million, with the general fund making up around $80 million. The rest is made up of enterprise funds, which are largely self-supporting through fees and other payments for services, for example. The $80 million general fund represents an increase of around $1.1 million over fiscal year 2016, or about 1.5 percent.
The good news for property owners is the tax rate will decrease slightly. Based on the constant yield, the tax rate for fiscal year 2017 is set at .4727, representing a modest reduction from the fiscal year 2016 rate of .478. According to estimates, one penny on the tax rate is equal to $855,473.
Under the new property tax rate, for a property assessed at $400,000, city tax will be $1,890.80 in the next fiscal year compared to $1,912 this current fiscal year.
Property tax assessments increased about 1.1 percent for fiscal year 2017. The revenue from real property taxes in fiscal year 2016 was $40,239,417 based on the .478 tax rate. Even with the slightly lower tax rate of .4727, the estimated revenue from real property taxes in fiscal year 2017 is $40,438,210.
The budget approved on Friday also maintains the reserve balance at the resort’s stated policy of 15 percent of the general fund budget and perhaps even slightly higher. At the beginning of the budget wrap session on Friday, the proposed budget included an access of about $876,000 over the 15-percent reserve fund policy, but the Mayor and Council revisited certain specific requests and funded certain items, lowering that figure throughout the day.
At the end of the day, no department got everything they asked for, but everyone got what they needed to continue to maintain the quality and quantity of services the residents and visitors have come to expect. At the start on Friday morning, there was around $1.2 million in various departmental items that were not funded in the budget, but the Mayor and Council revisited some of those items and restored them in the budget.
For example, there was an increase of over $609,000 requested from various departments under the personnel category, including adding new positions and changing some existing part-time positions to full-time positions. However, the elected officials for the most part held true to their policy of streamlining the payroll and holding the line on new positions.
The one omission that generated some debate on Friday was a request to change a part-time building inspection employee to a full-time position. Building inspection has come under increased scrutiny in recent weeks as the town has vowed to beef up its enforcement related to rental occupancy and vacation rentals in the R-1 residential district, for example.
Planning and Community Development Director Bill Neville said the request did not seek to add a new position, but rather change an existing position from part time to full time. In light of the recent changes in terms of occupancy calculations and rental applications, Councilman Wayne Hartman made a motion to approve the change in the interest of giving the department the resources it needs to enforce the recent changes. However, Councilman Dennis Dare said the building inspection department would need a larger overhaul and additional resources than simply changing one part-time position to full time.
“I think there is a lot of reorganizing and improving needed in the permit process and I’d rather have a better understanding of the bigger picture,” he said. “I’m reluctant to add another full-time position right now.”
Councilman Doug Cymek agreed.
“There are a lot of things we need to discuss with the department,” he said. “I think we might be putting the cart before the horse if we approve this simple change today.”
While the Mayor and Council left around $609,000 in personnel increases on the table, it did approve a couple of increases under the services category. For example, the MAG pay and classification study, which compares pay rates of municipal employees with employee pay rates in similar jurisdictions, was included in the budget at $3,000.
In addition, the OCPD was granted the $45,000 it requested for outside assistance from other law enforcement agencies during certain vehicle-related special events. Earlier this week, it was suggested the revenue earned from the new trailer and oversized vehicle permits and stickers could be redirected to the police department to offset the cost of calling in extra help during the special events.
Also put back in the budget in the supplies category was funding for new Class A dress uniforms for the volunteer firefighters in order to make them consistent with the uniforms of the career firefighters. The unified message is on the buildings, fire trucks and other apparatus, but the dress uniforms for the two partnering agencies are different. The town’s share is $38,000 for a 50-percent match with the volunteers adding the other 50 percent.
Another significant addition approved from the non-funded list were two requests to shore up the resort’s data collection and storage, including police data, land records, tax information and a wide variety of other critical information stored digitally. After some debate, the Mayor and Council approved a network data replication request at a one-time cost of $55,400, and an offsite data recovery plan in the event of a disaster at $54,000. In simplest terms, the expenditures would create a second data storage site as a backup at a facility different from the Public Safety Building, and other data recovery system in the event of an emergency administered by a third party off the island.
When it was all said and done, the Mayor and Council adopted a balanced budget for fiscal year 2017 that included a modest property tax cut. While some things were cut and others were left out, the spending plan for fiscal year 2017 accomplishes the five pillars of the strategic plan including quality of life investments for residents and visitors.