OCEAN CITY — After two weeks of almost daily work sessions, the Mayor and Council last week approved a fiscal year 2018 spending plan with a little room to spare between revenue and expenditures.
The total budget for all funds is $128 million with the general fund making up about $84 million. The general fund budget includes an increase of about $3.2 million over the current year, or an increase of around 4 percent.
The good news for property owners is the tax rate is expected to decrease slightly for the second straight year. Based on the constant yield, the tax rate for fiscal year 2018 will be set at .4656 per $100 of assessed valuation, representing a modest decrease from the .4727 rate in fiscal year 2017. The constant yield rate represents the same amount of municipal funding needed to maintain the same level of services and programs as the prior year.
When the dust settled after nearly two weeks of work sessions, during which each department presented its proposed budget, there was a modest difference between anticipated revenue and expenditures. During the work sessions, some things were added at the request of the various departments and some were denied. Budget Manager Jennie Knapp told the council after all those decisions had been made, there was roughly $180,000 left over, which will be added to the general fund to help offset the $2.4 million moved from the general fund for capital projects.
After the balanced budget was agreed to by the council, Councilman Tony DeLuca expressed concerns about the ability to continue to achieve those goals in the future.
“Now, I’m not worried any more about the year we’re in and I’m not worried at all about the year we just budgeted, 2018,” he said. “But I have to tell you I spend a lot of time thinking about 2019, 2020 and 2021. I’m always looking at the out years and as I look at the trends for the last three years, I see expenditures continue to go up and revenue staying flat or even going down. So, the trends scare me a little with working with the constant yield in the next couple of years. We’re always asking you to hold the line and that’s going to be more difficult.”
DeLuca said while the council was diligent in the review of the budget requests, he urged his colleagues to continue to hold the line in the future.
“When we talked about the one request page you put up, we saw that there was $2.5 million in requests,” he said. “We also know there are $30 million in capital projects out there. I think we really need to look at how we can increase the revenue page and how we can decrease the expense page and make ugly decisions. We have to discuss the ugly and we have to discuss the very, very difficult.”
DeLuca said it was time to seriously consider some of the proverbial elephants in the room.
“We have to talk about the things we don’t want to talk about,” he said. “We have to talk about the room tax, we have to talk about parking meters and we have to talk about increasing trams. When we go over to the expense side, we need to talk about West Ocean City and the EMS service and what does that really cost our taxpayers. We need to continue to talk about tax differential.”
DeLuca drew from his corporate background as he stressed the importance of fiscal responsibility.
“What can we do to decrease expenditures?” he said. “Coming from a corporate background, all I talk about is sales and cutting costs, sales and cutting costs. The strategic plan is coming up in July and we need to have these conversations because it gets tougher and tougher every year.”
Council President Lloyd Martin agreed to some extent and said the challenge is meeting the needs of the year-round residents and the countless visitors in a fiscally responsible way.
“I think those concerns are valid,” he said. “I’m also the guy who doesn’t want to buy frozen beef when I can get fresh. Like the city manager always says, we have to sparkle every day. I think we need to look at revenue and expenses that way.”
Martin said the council’s goal in any budget year is always to have an eye on the future.
“We’re going to have all of those conversations, but it’s going to take some time,” he said. “It’s not going to be just one day. If it was that easy, we’d have it done already. We have to look at this year, but we also have to look five years out. It’s like looking at snapshots in time and what you think it’s going to be. But at least we now know what we think it’s going to be.”
Mayor Rick Meehan said the elected officials already do most of the things DeLuca was suggesting.
“I don’t want everybody to think that all of the things Tony talked about we didn’t do this year,” he said. “What we try to do every year is maximize revenue and decrease costs and we were able to do that again this year with this budget.”
Meehan said Ocean City presents unique challenges with its municipal budget as a resort town.
“It’s different from some businesses because we provide a service,” he said. “This is a service industry. We do what you’re talking about every single year. What you’re asking is to try to project out into the future and I think that’s something we’re all going to be working on.”
