OC Council Reviews Future Capital Project Rankings; Critical List Includes Street Paving, New Boardwalk Decking

OC Council Reviews Future Capital Project Rankings; Critical List Includes Street Paving, New Boardwalk Decking
File photo by Chris Parypa

OCEAN CITY – The City Council got a first look at the proposed fiscal year 2020 capital improvement plan (CIP) this week and are now in the early stages of prioritizing the “must haves” and the “nice to haves.”

City Engineer Terry McGean on Tuesday presented the draft fiscal year 2020 CIP to the Mayor and Council, who are now charged with prioritizing the lengthy list of projects from street paving and canal dredging to replacing the Boardwalk decking and everything in between and carefully placing them in the funding formula over the next five years. Some of the projects are characterized as critical, or “must haves,” while others fall further down the list as less important, or “nice to haves.”

Combined, they total hundreds of millions of dollars over the next five years and beyond. Many will be paid for with general obligation bonds, while others fall into the “’pay as you go” category. Still others will be paid for with grants and several fall under the guise of water and wastewater projects, for example, and consequently will be paid for from enterprise funds, or those funds derived from end users through fees and other charges.

Nonetheless, the fiscal year 2020 draft CIP is just that, a draft document prepared by staff including McGean, City Manager Doug Miller, Budget Manager Jennie Knapp, Finance Director Chuck Bireley and others. However, it is ultimately up to the Mayor and Council to determine the priority list and choose which projects fall under the critical category or the less important category.

McGean on Tuesday said the presentation of the draft CIP was a necessary first step in that process. After reviewing the draft CIP, the Mayor and Council will come up with their own priority lists based on need and available funding and those lists will be carefully vetted in work sessions early next year in advance of next year’s budget cycle.

McGean said there were different forces at work in the town’s current financial situation that could determine which projects make the final list and which projects can and likely will be pushed to out years. For example, the city’s debt policy sets a cap on the total bonded debt as a percentage of assessed value at 3 percent.

Currently, the total amount of bonded debt in relation to total assessed value is just 1.13 percent, or well below the stated 3 percent maximum. In layman’s terms, there appears to be plenty of room in the debt-to-assessed-value ratio to fund many of the larger big-ticket items on the list without approaching the maximum allowed under the current policy.

In terms of actual numbers, the town’s current level of allowable bonded debt at the 3 percent mark is approaching $268 million, but the actual level of bonded debt currently sits at a little over $101 million.

“If you were to fund every single project on this list, it would go to 1.7 percent, which would still be well below the 3 percent maximum,” said McGean. “That’s the good news.”

However, that somewhat rosy outlook was tempered somewhat with another chart presented that looks at the general fund projects impact on debt service.

“What this chart tells me is it speaks to the affordability of debt service,” McGean said. “You either need to take some of these things off or come up with other funding sources. Continuing to fund these projects simply through fund balance is not sustainable. That’s the bad news.”

McGean then went through the list of capital projects on the draft CIP, with an emphasis on draft. Some are characterized as critical, while others are characterized as very important, important, less important and those for future consideration.

“The first category includes critical projects,” he said. “These are things that need to be funded, or things we ‘have to do.’ There really isn’t much of a choice.”

The critical project list includes annual street paving at $2.5 million per year. Street paving is paid for with a combination of general fund contributions, casino revenue and grant funding. Another project on the critical list is the re-decking of the Boardwalk, which comes with an estimated price tag of $2.26 million and would be paid for with a general fund bond. The third project on the critical list is replacing the failing bulkhead along Chicago Avenue, which comes with a $2.2 million price tag. Funding sources identified for that project include general fund bonds and grants.

In terms of the Boardwalk re-decking project, McGean said it was last done in 2011 and 2012 and needed to be redone in the coming years.

“We expected it to last eight to 10 years and we’re in that window now,” he said. “Some areas are failing and we’re at the early end of the threshold.”

The next category is characterized as the “very important” projects, of those projects that need to be done in the next few years, but fall just a little short of making the critical list. Topping the very important project list is the proposed new water treatment plant at 66th Street, which comes with a $29.5 million price tag. However, that project would be paid for through the water-wastewater enterprise fund and would not impact the general fund.

Just two weeks ago, the Mayor and Council approved the purchase of the World Gym property on 66th Street as the latest piece in the puzzle of property the town is acquiring for that purpose. The other significant project on the very important list is replacing aging wastewater mains at around $3.5 million, which would also be paid for through the enterprise fund.

The very important project list also includes continued canal dredging at an estimated $400,000 per year. Councilman Tony DeLuca expressed a desire to move canal dredging further up the priority list.

“I think canal dredging should be on the critical project list,” he said. “It’s a safety issue and it also increases property values.”

Other projects on the very important list include the reconstruction of the old Whiteside lot, which serves as the downtown public works complex. It will be replaced when the new public works complex and Boardwalk tram headquarters is completed at 2nd Street and the town will face tough decisions on what to do with the old site.

Another project on the very important list is replacing the cart bridges at Eagle’s Landing Golf Course. It came to light this year the decades-old cart bridges at the municipal course are in need of repair and the estimated cost is around $276,000.

Resurfacing the Inlet parking lot is also on the very important list with an estimated cost of $550,000. McGean said resurfacing the Inlet lot should be a priority.

“I’m really surprised it has lasted as long as it has with as many stakes as we’ve driven into it and the beating it takes from the weather,” he said. “It’s a very important project because it’s a revenue generator.”

Other projects on the very important list include preliminary planning for streetscape improvements on Baltimore Avenue, replacing various playgrounds around the resort and replacing an aging elevator in the fire department headquarters building at 15th Street. When asked why the elevator needed replacing in a fairly new building, McGean explained the elevator in question is in an older section of the building.

The next category on the draft 2020-2024 capital improvement plan were characterized as important projects, or those projects that should be done, but are less critical than projects in the prior categories. Many of the big ticket items on the important list are related to the Ocean City Airport, and, therefore covered with federal and state grants.

However, making its way on the important list is the proposed mid-town fire station. Station 3 in the mid-town area is aging and in need of repair or replacement and a project discussed often in recent years would move the mid-town station to the front lot of the Public Safety Building at 65th Street. However, there has not been a solid consensus among the council on that proposal. Most of the other projects on the important list are related to water and wastewater and would be covered with bonds through the enterprise fund.

The next category are those projects characterized as less important, or projects that are “nice to haves.” However, some projects on the less important list are resident and visitor-friendly amenities such as a Sunset Park pier, a renovation and addition to the skatepark, and a renovation and reconfiguration of the downtown recreation complex at 3rd and 4th streets.

The final official category includes projects listed as “under future consideration.” The short list includes a proposed expansion of the Ocean City Lifesaving Station Museum at $2.5 million and a reconfiguration of the bus lanes along Philadelphia Avenue in the south end of town.

Councilman Dennis Dare voiced some concern the latter was too far down the draft priority list.

“When we look at the Philadelphia Avenue transit lane from 17th Street to Worcester Street, I don’t want to lose sight of that one,” he said. “We’ve talked about turning the buses around before they mingle with Route 50 traffic and there might be an opportunity to do that at 4th Street.”

Finally, there were a handful of projects that were not included in the draft CIP presented by McGean that at least needed to be kept on the radar. They include a proposed marine mammal rescue facility, a new Humane Society facility, the oft-discussed Worcester Street parking garage, a sports complex somewhere off the island and the ongoing model block program.

About The Author: Shawn Soper

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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.