OCEAN CITY — Resort officials this week approved on first reading the proposed $124 million fiscal year 2017 budget that includes significant investments in the town’s infrastructure and a modest reduction in the property tax rate.
The Mayor and Council on Monday unanimously endorsed the fiscal year 2017 spending plan after completing often tedious budget work sessions late last month. The total for all budgets is just over $124 million, with the general fund making up around $81 million. The balance is made up of enterprise funds, such as water and wastewater, for example, which are largely self-supporting through fees and other payments for services.
The $81 million general fund budget 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 around $855,000 in the budget.
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.
“Less than 50 percent of the budget comes from the property tax,” said Mayor Rick Meehan. “That’s been a goal the last few years and we’ve been able to accomplish that. We’ve also been able to maintain a fund balance at a level that exceeds 15 percent, which is also a policy and goal.”
Fund balance in excess of the stated goal of 15 percent totaled a little over $1.2 million, which the Mayor and Council reinvested in certain ongoing capital projects in fiscal year 2017. For example, over $511,000 will be reinvested in the street paving program, bringing that total to $2 million. The budget also includes $300,000 for the ongoing canal dredging program, $185,500 for improvements at Northside Park, $103,750 for the continuation of a surveillance camera project and another $103,750 for a fiber connectivity project.
Meehan said the 2017 budget includes those capital investments while maintaining a healthy fund balance and actually reducing the property tax rate, albeit modestly, while other jurisdictions continue to raise property taxes just to maintain. He used the street paving investment as an example.
“At the same time, we’ve been able to appropriate $2 million to continue our street paving project,” he said. “We’ve been able to do what a lot of people have said are essential things for the town of Ocean City and that is improving the infrastructure.”
The mayor said fiscal conservatism and careful planning allowed the resort to continue to reinvest in infrastructure while maintaining the 15 percent fund balance, or rainy day fund of sort, and lowering the tax rate.
“If you look at other communities, they’re not able to do these types of things,” he said. “The county’s entire budget for street paving is $1 million, whereas we have a $2 million budget here in Ocean City. We’re doing the things we need to do to provide the amenities and services our visitors and residents expect and deserve. At the same time, we’re ensuring this continues for future generations by investing in our infrastructure.”
While the balanced budget includes considerable reinvestment and a healthy fund balance, the 2017 spending plan was not without its detractors.
During the public comment period, resident John Medlin pointed out the town maintains a robust offseason police force while struggling to fill out the ranks of seasonal officers in the summer months. However, Council President Lloyd Martin dismissed the notion of reducing the number of year-round police officers.
“I think we do need to maintain the level of police officers in the offseason,” he said. “They’re keeping the crime rate low and they’re keeping the bad guys out. It’s kind of like keeping the lights on and they’re doing a great job.”
Medlin also suggested saving money by turning over the 911 call center responsibilities completely to the county. For years, 911 calls in Ocean City are first forwarded to the county call center in Snow Hill and then relayed back to the appropriate emergency services in the resort. Again, Martin dismissed the idea of eliminating Ocean City’s role in the 911 response time and advocated instead for cutting out the middle man at the county level all together.
“I’m not sure I want to do that,” he said. “Obviously, I want the 911 call center in Ocean City. I think we need to strive for that so we don’t have the delay. It needs to be in Ocean City.”
Medlin also questioned the town’s investment in the new public boat ramp at 64th Street. The total project cost is around $1.5 million, with the state paying the lion’s share. Martin said the boat ramp will meet a serious public need in the resort.
“This is a beach resort with a bay out there and we need a boat ramp in the Town of Ocean City,” he said. “We don’t have enough private boat ramps. Putting one in the center of town makes sense and I think we’re doing a great justice for the town of Ocean City and our visitors.”