OCEAN CITY — The real meat and potatoes segment of Ocean City’s ongoing long-term strategic planning got underway this week with a breakdown of several major capital projects in the planning pipeline and if and how to pay for them.
Two weeks ago, Ocean City officials began the long-term strategic planning process with a series of meetings focused on conceptual plans for the resort for the next decade or so. The initial sessions were long on concepts and short on specifics, but this week the Mayor and Council held a marathon session on Wednesday to discuss specific capital projects.
Many of the projects discussed fell in the category of essential infrastructure improvements, while others represented aesthetic and cultural enhancements. To be sure, most come with expensive price tags and city officials are now tasked with prioritizing them and deciding how best, or even if, to fund them.
Much of the council’s debate focused on the town’s current financial situation and its ability to fund major projects, either through the bond market or creative pay-as-you go strategies. Councilman Tony DeLuca said in a perfect world, all of the proposed projects could be funded in one way or another, but reminded his colleagues the town’s financial situation was not perfect and tough choices had to be made.
“I’d like to do everything on these lists but it might not be practical or possible,” he said. “We have to go through and prioritize what we have to do and what we want to do. Some of these things we can do as pay-as-you-go and some things are going to have to be bonded.”
The town has sold general obligation bonds in recent years to pay for major capital projects and infrastructure improvements and there is considerable debt service already to contend with over the next several years, but Finance Administrator Martha Bennett explained with a rock solid bond rating and favorable interest rates, the town is in a good position to borrow more if the council desires.
“About 75 percent of your debt will be paid off within 10 years,” she said. “The debt ratio is really low and we’re paying things off fast. We’re in a very good position because you’ll see a significant drop-off in debt in a few years.”
City Engineer Terry McGean said some of the projects will require some initial investment in design and engineering before the council decides to approve them and ultimately fully fund them. In some cases, such as the potential replacement of the midtown fire station at 74th Street, total project estimates won’t be available before some preliminary work and expenses. McGean said the department heads in charge of the potential projects were looking for some direction from the elected officials on whether to continue moving forward on some projects.
“With some of these things, we’ll need to spend a little money to get you the answers you need,” he said. “It would be good to get some direction from you all before we go any further on some of these things. Some might not go to construction until 2021, but the lead up takes time and, in many cases, money.”
The projects could be funded in variety of different ways if desired, including general obligation bond sales or pay-as-you-go from reserves. Budget Director Jennie Knapp said there could even be some wiggle room in the property tax rate, which has technically been lowered in each of the last few years.
“For the last 10 years, we said what we wanted the tax rate to be and we’ve been able to do that,” she said. “It’s not palatable to anyone to increase taxes, but keeping it down for so long has gotten us where we are on some of these things.”
Councilman Wayne Hartman was adamant about not increasing the property tax rate, even if it helped fund some of the needed projects.
“I’m not willing to raise the tax rate,” he said. “I think we need to look at other ways to increase revenue, whether that’s parking meter increases or room tax increases. I will not support a budget that includes increasing the property tax rate.”
However, Ocean City Fire Department Chief Chris Larmore said wearing his other hat as a city taxpayer, he could possibly live with a modest tax hike if it meant funding some of the larger projects on the horizon.
“As a taxpayer, as long as I can see a return, I wouldn’t necessarily have a problem with a modest tax increase,” he said. “I want all of these things because these are quality of life and public safety things. I wouldn’t have heartburn with a modest tax increase if it meant being able to fund a lot of these things.”
After considerable debate, the council decided to wait for the answers to a few more questions before prioritizing the projects in the strategic plan. The following is a brief look at some of the major capital projects discussed on Wednesday:
Fire Station Replacement
Replacing the Station 3 firehouse, first built in 1969 and expanded in 1987, has been part of a larger strategic plan for the resort’s fire stations developed in 2002 and most recently updated a year and a half ago. However, with many other significant capital projects in the planning and development pipeline, the majority of the council voted 4-3 in March to temporarily shelve the Station 3 replacement plan.
That narrow vote came after the council got assurances the existing Station 3 firehouse could last at least another five years. Instead of proceeding with the bidding process for the design of the new Station 3 firehouse at 65th Street, the divided council instructed City Engineer Terry McGean to do further analysis on the condition of the existing facility and what it would take to eke out another five years or so while until other major capital projects were taken off the town’s ledgers.
McGean said Tuesday further study revealed the firehouse was generally in good condition structurally, but had several deficiencies and functional problems that would need to be addressed if the facility was going to continue to be used.
McGean presented essentially three different alternatives with varying price tags although two were intrinsically linked together. The staff’s recommendation was to move forward with the firehouse replacement plan and spend the budgeted $30,000 on preliminary design and engineering work along with an additional $25,000 to complete a handful of pressing projects needed to keep the existing firehouse operational and livable for the men and women who use it.
McGean explained the $25,000 short-term fix would bridge the gap until a new Station 3 firehouse could be designed, engineered and ultimately developed at the 65th Street location. The second alternative presented by McGean included more extensive renovations and rehabilitations at the existing firehouse at the 74th Street location to the tune of around $275,000 if the council’s desire was to put the firehouse replacement project on the back burner and attempt to get another five to 10 years out of the existing facility.
Boiled down to its simplest terms, Station 3 could be renovated and restored to last another two to three years until a replacement firehouse called for in the strategic plan could be built at 65th Street. That combined $55,000 price tag would bring the station up to code and make it livable and ADA compliant for the short term. If the plan was for keeping the firehouse for five to 10 years, the alternative was spending the $275,000 on more extensive renovations and upgrades.
Larmore said the life of the 74th Street station could be extended with some modest investments, but urged the council to reconsider putting it back on front burner.
“It has become functionally obsolete,” he said. “That has really highlighted the need to do something with Station 3. It has been put on the back burner several times, but at best it can house two full-time crews in the summer. It’s the busiest station, but also the smallest station.”
McGean identified the basic reasons for concern with the aging station. Among those are ADA requirements, ventilation in the engine bays, ventilation in the living space, no separate areas for cleaning equipment and no separate post-incident showering facilities for male and female firefighters and paramedics. McGean essentially laid out three basic options for the future of the mid-town firehouse.
“That’s the first question you have to decide,” he said. “One option is to leave it alone and get more life out of it, another option is tear it down and rebuild in the same location, or tear it down and rebuild in front of the Public Safety Building at 65th Street, which is the preferred option. There is $30,000 in the budget for preliminary design work. If you say no, we don’t want to do this, can the $30,000 be used to address some of the deficiencies? It’s all kind of tied together.”
Meehan provided a little history on the evolution of the long-term plan to rework and replace the town’s aging fire stations.
“When this was discussed several years ago, there was a lot of controversy about the fire stations,” he said. “We included the volunteers because we wanted to come up with something we could all be happy with. I would like to hear from the volunteers. I think this is something we can afford and I think we’ll be able to accomplish our goals, but that’s up to the council to decide.”
Larmore explained the city owns the actual fire station building, while the volunteer fire company owns the property it sits on. He said if the existing fire station is torn down, the volunteer fire company could sell the property and dedicate the money to their own projects or equipment trust fund, but the volunteer company’s board of directors has already indicated they would be willing to dedicate any proceeds from the potential sale of the property to offset the cost of a new and improved station at 65th Street.
“That shows you just how strong this partnership is right now,” he said. “They could take the money from selling the property and run, putting it to some other use of their own, but they are on board with this. I’m not sure what the sale of the property might be, but pulling a number out of the air it could be $1 million. That could offset the cost of a new station.”
2nd Street Property
Another project discussed on Wednesday was the new Public Works facility on property recently purchased by the town at 2nd Street and St. Louis Avenue. The new facility will replace the town’s existing public works yard known as the Whiteside facility at South 1st Street. The new facility at 2nd Street will, among other things, serve as a staging and maintenance area for the Boardwalk trams.
The property was purchased by the town at $2 million, which is largely being financed through a general obligation bond. While it was discussed during Wednesday’s strategic planning session, the project is not on the table and is already well along in the engineering and construction phases with a target completion date for next spring, according to Public Works Director Hal Adkins.
“It’s going to be a challenge to be operational next summer, but everything is a go,” he said.
When asked what the future held for the old Whiteside facility property, Adkins said the building will be demolished and the concrete slab on which it sits can be striped and used for more municipal parking downtown, which could generate revenue to offset the cost of the new facility until a long-term use for the property is determined. In terms of the design of the new facility, Adkins explained much of the design had been hammered out at the Transportation Committee level and had the blessing of the Ocean City Development Corporation (OCDC) in terms of being compatible with the downtown area.
Hartman took umbrage at the notion the design was hammered out at the committee level and had not been shared with the full council.
“Over the last few weeks, we seen a lot of disconnects with the committees and the full council,” he said. “I think the full council should have some input on some of these larger projects.”
City Manager Doug Miller said there could be an opportunity for more involvement from the full council in the future.
“Once a project is essentially approved, you get a 30-percent design, maybe a 60-percent design and ultimately a 100-percent design,” he said. “If the council wants to be included in that process, maybe that can happen at the concept stage.”
Mayor Rick Meehan agreed there could and probably should be more involvement from the full council on the design of larger projects.
“I think it’s important that the council knows, and the entire community knows, what is going on with a city-owned property and what is going to be built,” he said. “I think that’s important and we might have an opportunity to make that happen.”
Inlet Parking Lot
Also included on the list of upcoming capital projects discussed on Wednesday is a planned complete reconstruction of the Inlet parking lot. Roughly $750,000 has been tentatively included as a line item in fiscal year 2018 for the project, which could include a complete repaving of the Inlet lot and a possible reconfiguration of the user payment methods. Potentially, the Inlet lot could continue with its manned ticket operation, or the town could go to the same CALE parking meter system used at other municipal lots. In either case, the lot needs some immediate attention according to Adkins.
“It really needs a major reconstruction and repaving,” he said. “It’s starting to deteriorate. We keep punching holes in it for the tents for the special events and its showing wear and tear. We could spend $500,000 just to repave it.”
Last spring, the council tweaked the parking fee schedule at the Inlet somewhat in the interest of making it more efficient and generating more revenue at the same time. Hartman questioned if the town’s parking fees at the Inlet lot were in line with other resort communities and tourist destinations.
“Can we look at what other beach towns are charging for parking?” he said. “If we’re at $2 and everybody else is at $3, maybe we can increase that a little to offset the cost of this expensive repair.”
Public Works Campus
The Mayor and Council this year approved a major $25 million upgrade and expansion of the town’s vast public works campus and transit facilities along the bayside at 65th Street. The town’s Public Works Department has been working with the Maryland Transit Administration (MTA) for a decade on a plan to substantially upgrade and expand Ocean City’s public works campus along the bay roughly from 64th Street to 67th Street.
The total project cost is $29 million, of which the town will pay about $11 million. The balance will come from the MTA with some federal funding passed through the state. Adkins explained the project was moving right along with a groundbreaking expected as soon as January and a construction completion schedule of about two-and-a-half years.
Hartman asked if some elements could be redesigned or eliminated altogether in an effort to reduce the overall cost of the project. He asked about some elements including the proposed parking garage, the rooftop emergency landing pad for state police medevac helicopters and Coast Guard helicopters, for example.
However, Adkins explained the public works campus project was well along the planning and design pipeline and would soon enter the construction phase. He said any significant changes to the project at this point would represent a major redesign.
Another project discussed on Wednesday was the planned redecking of Ocean City’s Boardwalk. The entire length of the Boardwalk was reconstructed in 2011 and 2012 and at that time, the life expectancy for some of the boards was set at around nine years.
The plan is to replace the Boardwalk decking in three phases beginning in in 2020 or 2021 with a first phase from the Inlet to North Division Street including the detour around the pier, a second phase from 15th Street to the Boardwalk’s end at 27th Street and a third phase in the middle from North Division to 15th Street. No funding source has yet been identified, which is why it was up for discussion on Wednesday, but Adkins advised it was time to begin planning for the extensive project.
“We’re getting closer to that 10-year mark and we’re seeing some deterioration in some areas,” he said. “We’re looking at two years out for a total replacement project, which takes us into 2020 and 2021. It’s a good idea to start planning for that now.”
Baltimore Avenue Corridor
Another significant infrastructure project on the city’s radar is a major renovation of the streetscape along Baltimore Avenue from North Division Street to 15th Street, but the issue is complicated. The ultimate plan is to underground the utilities along the corridor where possible and enhance and expand the sidewalks were possible. In addition, the Mayor and Council this year extended the non-conforming sign sunset provision that will allow private property owners along the corridor to leave their existing signs in place for at least another six years.
The issue came to light earlier this year during a debate about extending a sunset provision on non-conforming signs along Baltimore Avenue for another six years. Dozens of signs along Baltimore Avenue currently don’t comply with the city’s code for the upper downtown overlay district. Some are too tall or too wide, but more than a few are placed in the city’s right-of-way for Baltimore Avenue.
The right-of-way issue on Baltimore Avenue is complicated. The right-of-way on the state-owned roadway is not clearly established and the property lines are blurred. As a result, many of the properties extend well into the originally-platted right-of-way, but those lines have long been forgotten or ignored.
Complicating the issue further is the State Highway Administration’s ongoing reconstruction of all of the sidewalks in the resort to ensure they are Americans with Disabilities Act (ADA) compliant. Adkins said SHA has reached a point where it is ready to tackle the sidewalks along the Baltimore Avenue corridor with full funding by the state, but the town had to decide if it wanted to tackle a redevelopment of the corridor in advance of the state’s sidewalk project.
“If you wanted to widen the sidewalks from North Division to 15th Street, SHA would do that and they have the funding in place,” he said. “If you want to underground the utilities and make other enhancements at the same time, the city would have to pay for a lot of that. You have to decide if you want to try to accomplish a lot of that at the same time. We would hate to have the state replace the sidewalks and we come behind and tear them up in a few years when we redevelop that corridor.”
Councilman Dennis Dare advocated for pushing forward with the streetscape project for the section of the Baltimore Avenue corridor. He pointed out the undergrounding of utilities and other enhancements had already been accomplished in other areas around town and the Baltimore Avenue corridor was perhaps the most important.
“This is the last piece in my mind,” he said. “This is what everybody sees. When you come across that bridge and head north, it looks like an alley right now. This is an opportunity to really enhance the gateway to the town.”
Meehan said the time was soon coming to make a decision on the corridor.
“We have an opportunity to address the right-of-way issue and partner with the state,” he said. “It’s a conversation we have to have sooner rather than later. If we put this off now, it might be another 15 years before the state comes back with funding for sidewalks.”
Another major project under consideration that was discussed on Wednesday was the proposed expansion of renovation of the iconic Ocean City Lifesaving Station Museum at the foot of the Boardwalk.
For decades, the Ocean City Lifesaving Station Museum has sat on the south end of the Boardwalk, offering a glimpse of life in the resort dating back a century or more with various exhibits and displays.
It has remained unchanged for decades, however, and while the building maintains its quaint charm, the facility has somewhat outgrown is usefulness as a public museum. There are ADA issues that need to be addressed and the historic building is often bursting at the seams with various exhibits, offices, restrooms, a gift shop and other uses.
To that end, the Museum Society Board last spring proposed a new two-story facility adjacent to and connected to the historic lifesaving museum at the foot of the Boardwalk. However, the new two-story facility is proposed for construction east of the Boardwalk and the existing museum, which will likely result in a complex approval process.
When the Museum Board pitched the concept to the council earlier this year, it explained the mandated ADA changes including improved staircases and an elevator would likely cost the city around $500,000, for a contribution of about $600,000, the major expansion and renovation could be jumpstarted.
The board estimates the total project cost as preliminarily designed would come in around $1.8 million, but with a combination of potential state grants and an aggressive private-sector fundraising campaign, the city’s contribution could be as low as $600,000 and the town will likely have to pay $500,000 just to make the existing museum ADA-compliant. While no firm commitment was promised and the project likely belongs on the “want” list and not the “need” list, there was some support expressed on Wednesday.
“It certainly merits consideration,” said Meehan. “The history of Ocean City is very important to its residents and visitors, many of whom consider it their second home. We saw when we put the historic placards up in City Hall, people would come in to pay a water bill or something and would spend hours reading about the town’s history.”