Ocean City’s ‘Double-Donation’ Policy With Nonprofits Questioned

Ocean City’s ‘Double-Donation’ Policy With Nonprofits Questioned

OCEAN CITY — Ocean City’s future donations to nonprofit organizations and programs also supported by Worcester County government were called into question this week during a first-reading of the proposed fiscal year 2018 budget.

The Mayor and Council on Monday approved on first reading the proposed fiscal year 2018 budget, but not before a larger debate about the town’s continued supplemental contributions to various non-profit organizations and charities that support both Worcester County and Ocean City. At the close of budget work sessions two weeks ago, the Mayor and Council considered, and ultimately approved in most cases, requests for special appropriations from various nonprofits including, Diakonia, Worcester Youth and Family Counseling, Wor-Wic Community College and the Cricket Center, just to name a few.

On Monday, however, Councilman Wayne Hartman brought up the issue of what he characterized as double-donations, pointing out many of the organizations on the request list for supplemental donations are already supported by Worcester County. Hartman pointed out around 54 percent of Worcester County’s operating budget is derived from the property tax contribution from Ocean City, essentially meaning the resort’s taxpayers have already significantly contributed to the non-profits even before supplemental contributions are added in the budget.

Hartman pointed out that for years, Ocean City has gone to battle with Worcester County over the issue of tax differential, or essentially the cost for duplicated services, and asking the resort taxpayers to essentially donate twice to the various non-profits was hypocritical.

“I’ve been on the record before with the various organizations we donate to,” he said. “When I look at the packet, I see what was requested and what we put in our budget and what the county funded. I look at that and the battle and discussion we’ve had over tax differential and we’re basically saying it’s not fair to be double-taxing the residents of Ocean City. Not picking on any one charity and they’re all worthy, I’m just saying we’re guilty of what we’re fighting with the county over double-taxation. I’m just questioning why we’re doing that.”

Hartman cited a couple of examples to illustrate his point. For example, the county’s contribution to Wor-Wic Community College is $2.1 million, but with Ocean City taxpayers contributing 54 percent to the county budget, the town is already $1.15 million to the community college and the supplemental funding in the budget adds $10,000.

Similarly, the county contributes $91,000 to Worcester Youth and Family Counseling, of which $49,000 comes from Ocean City using the same 54-percent formula. Nonetheless, Worcester Youth and Family Counseling is set to receive an additional $9,000 in supplemental funding from the resort.

Mayor Rick Meehan said he understood Hartman’s theory, but warned against punishing the non-profits because of the larger battle with the county over tax differential.

“Although I understand the basis of your comments, these are organizations that provide a service to Ocean City and I don’t want to penalize them because of our battle with Worcester County,” he said. “I realize the percentage you state, but over and above some of these organizations provide exemplary service to the Town of Ocean City and would cost us a lot more if we had to provide it ourselves. I don’t see where

we would want to penalize these organizations because of our ongoing battle with Worcester County over tax differential.”

Hartman, however, stuck to his guns on the double-donation debate. He pointed to the town’s ongoing policy regarding contributions to Atlantic General Hospital (AGH). Each year, AGH makes a request to Ocean City for supplemental funding and the town’s policy has been to reject the request because of the belief much of the county’s significant contribution to the non-profit hospital is already paid for by the taxpayers of Ocean City through the resort’s contribution to the county tax base.

“I don’t think we’re penalizing these organizations because we have contributed already,” he said. “I think we’re penalizing our taxpayers because we’re asking them to donate twice. That’s what I think we have to worry about. You’re saying we’re supporting Atlantic General because of our tax contribution to the county. That’s the same thing here. It’s the same concept. We’re fighting this battle with the county and we’re talking about hiring lawyers, but we’re essentially doing the same thing with these donations.”

Council Secretary Mark Knight said it would be disingenuous for the town to pull funding for the non-profits this late in the game and suggested the issue could be revisited later this summer when the resort embarks on its strategic planning process.

“Something that resonated with me at budget wrap-up was should municipalities contribute to non-profits because the federal government already does, the state government already does and the local government already does,” she said. “When we do our strategic planning in July, I think this should be discussed. I really and truly do. It’s not that I don’t agree with Councilman Hartman, but I think at this point the only group we gave new money to was the Worcester County Warriors, so I support what we’ve done with the donations in this budget, but I think we should take a closer look at this in July or August when we work on our strategic plan.”

One of the area non-profits that got a supplemental donation from the town was the Worcester County Warriors Against Opiate Addiction, an organization on the front lines of the growing battle against heroin addiction in the area and across the country. The city included $2,500 in supplemental funding to support the organization, and Hartman said he had no problem with that, but continued to question the funding for some of the other non-profits.

“I do agree with supporting the Worcester Warriors and I support that because it is such an important local issue, but many of these other ones are already supported by Worcester County and we provide most of the funding for that,” he said. “When you say we support AGH through the county, I think we already support a lot of these other groups through the county. Let’s face it, at 54 percent we’re funding a lot of this already and then we’re adding on top of that. I just think we need to practice what we preach. This is not double-taxation, but it is double-donation and I have a hard time supporting that.”

Councilman Tony DeLuca suggested pulling the supplemental funding requests issue out of the larger vote on the fiscal year 2018 budget in order to dig deeper into the issue.

“Given this information right now, can’t we approve the budget on the first reading and then research this and spend a little more time on this before second reading?” he said. “I mean, this is brand new to me right now. We’ve had an exhausting budget review and I’d rather approve this budget and look at this separately.”

Council President Lloyd Martin said each nonprofit contribution request had to be considered separately because of the amount and quality of service they provide to Ocean City.

“They’re getting money from the county and they’re getting money from Ocean City,” he said. “We need to look at what some of these organizations actually do for the town of Ocean City and why we fund them the way we fund them.”

Budget Manager Jennie Knapp said it was double-donation to some degree, but pointed out the non-profits go through a process and taking away their funding at this point in the game could have serious repercussions.

“Yes, it is double-donation somewhat, but these organizations follow the procedure we ask them to follow, they have their applications in in January and they have budgets for the next year on which they are dependent on money we have always given to them in the past,” she said. “If we do what Council Secretary Knight suggests and revisit this during strategic planning, then we could at least give them notice the next year there could be a change in the process and they might not be getting a donation from the town of Ocean City and that gives them the time to change their budget and their plans for the next fiscal year.”

Councilman John Gehrig asserted pulling back the funding for the non-profits at his juncture could signal their death knell.

“Are we ready to assume responsibility for destroying these nonprofits just because we feel like it?” he said. “Do you think our citizens want us to hurt organizations like Diakonia and the Humane Society? This is definitely worth a discussion, but I’m not willing to punch these non-profits right in the face at the last minute.”

Councilman Dennis Dare said the non-profits provide a valuable service to the resort and he could not support pulling back the funding this late in the game.

“It is the 11th hour and it would be a punch in the face to pull back the donations for these non-profits that we as a town depend on,” he said. “That’s why I supported these donations to these organizations. I know what services they provide day in and day out. If we didn’t have them, we’d have to increase the funding for our own departments much more than the several thousand dollars we’re talking about here.”

Hartman responded, “I just want to clarify I support these organizations and I donate to many of them privately, which is probably how this should be done anyway. I just wanted to bring to your attention we already support them. I’m going to support this budget and I hope nobody is upset because my intent here is not to hurt anybody. I just hope they know we already support these organizations through the county and I look forward to having this conversation again in July when we start our strategic planning.”

The council voted unanimously to approve the fiscal year 2018 budget on first reading.

About The Author: Shawn Soper

Alternative Text

Shawn Soper has been with The Dispatch since 2000. He began as a staff writer covering various local government beats and general stories. His current positions include managing editor and sports editor. Growing up in Baltimore before moving to Ocean City full time three decades ago, Soper graduated from Loch Raven High School in 1981 and from Towson University in 1985 with degrees in mass communications with a journalism concentration and history.