OCEAN CITY — Resort officials approved a budget amendment last week redirecting around $2.5 million in the fiscal year 2019 budget, but the net changes will not affect the bottom line.
The Mayor and Council on Tuesday approved a budget amendment that recognizes roughly $2.5 million in expenditure increases in the current fiscal year, but makes up the shortfall with an in-kind amount of revenue changes. On the expenditure side of the ledger, a handful of significant capital expenditures caused the fiscal year 2019 budget to be amended including over $833,000 transferred to the airport for the purchase of a property on the west side of Sinepuxent Road to fulfill federal and state-mandated runway safety standards.
In addition, the expenditure side of the budget amendment includes a $563,000 contribution to the new public works complex at 2nd Street, $283,000 for unfulfilled prior year purchase orders, a roughly $190,000 contribution to the employee pension fund, $105,000 for the ongoing storm drain cleaning project and a $100,000 contribution to the Atlantic General Hospital capital fund.
The total number for revenue changes came in at around $2.5 million fueled largely by shortfalls in certain areas including lower parking revenue at the Inlet and reductions from the rainy summer season last year. Budget Manager Jennie Knapp said the weather impacted certain areas of the budget and necessitated the budget amendment before the Mayor and Council on Tuesday.
“We had a very rainy summer,” she said. “You’ll see that throughout the budget. Anything that was weather-related was affected.”
At the end of the day, the amount of amended expenditures totaled nearly $2.9 million, while the changes on the revenue side came in at around $2.5 million. However, the difference was offset by around $381,000 in savings from anticipated employee healthcare costs and the remaining $1.8 million was reconciled with a transfer from the general fund balance for a net break-even in the budget amendment, which was ultimately approved with a 5-0 vote.
Per the town’s mandated policy, a general fund balance of at least 15 percent of the general fund expenses is required to be held in reserve. Even after the transfer of some general fund balance to reconcile the budget amendment approved on Tuesday, the general fund balance is around $6.5 million over the mandated 15 percent, or about 23 percent.