OCEAN CITY — The Mayor and Council rankings of projects large and small on the town’s draft capital improvement plan (CIP) revealed the elected officials are clearly divided on many, but the one they all agree is the most critical is the redevelopment of the Baltimore Avenue corridor.
Two weeks ago, City Engineer Terry McGean presented the draft fiscal year 2022 CIP and Mayor and Council members were charged with assigning a ranking to the many projects on the list from street paving to canal dredging and from recreation projects to airport enhancements. The Mayor and Council were instructed to assign a value to each project on a scale of one to five, with a one being considered critical and a five representing a project to be pushed further in the future.
McGean and his staff than compiled the elected officials’ rankings and found an average score that would prioritize the projects. The draft CIP was then prioritized based on the rankings with projects falling into categories such as critical, very important, important, less important and future consideration.
On Tuesday, McGean brought back the amended CIP with the elected officials’ ranking for further discussion and eventually a move toward a final CIP in advance of the 2022 fiscal year budget deliberations.
“This might be the most critical session in our CIP process,” he said. “The last time, you were directed to rank the projects on the list. That’s where we are today.”
While the individual elected officials’ rankings of the projects were not included in the agenda packet, it was clear from the aggregate rankings there was a vast divide for some.
“When we did this two years ago, there was pretty much a mutual consensus,” he said. “This time around it was significantly different. About 50% of the projects on the list had significant gaps in the rankings.”
“This list was developed based on your rankings,” he said. “That doesn’t mean you have to do it that way. We need to revisit some of these things. Some could be moved up and some could be moved down the list.”
Another issue to resolve in the CIP is how best and when to fund the projects on the list, which is why they are prioritized. Some projects on the list will be pay-as-you-go and paid for through the general operations budget or fund balance. Other heftier projects will be included in the town’s next major bond sale, perhaps as soon as next fall. In either case, McGean said the town has the resources to fund the most valued projects on the list with creative financing in both categories.
“Assuming $2.4 million will be coming out of fund balance at the end of this fiscal year, a lot of the projects are listed as pay-as-you-go coming out of the operating budgets,” he said. “We can do the critical and very important projects on the list and still stay ahead of fund balance levels.”
One project that included a unanimous “critical” ranking from the Mayor and Council was the redevelopment of the Baltimore Avenue corridor from North Division to 15th streets. Other projects listed as critical on the list include street paving, the Boardwalk re-decking, canal dredging, storm drain cleaning and expanding the City Watch surveillance system.
Projects on the “very important” list according to the rankings include the Chicago Avenue bulkhead, storm drain outfalls, a sports complex to tap into the youth sports market, a new elevator at fire department headquarters, the downtown recreation complex and a new gym floor at Northside Park.
In recent years, a major renovation of the streetscape along the Baltimore Avenue corridor connecting the previously improved sections from the Inlet to N. Division Street and 15th to 33rd streets including undergrounding the utilities and widening the sidewalks, for example, has been on the town’s radar, but the issue is complicated. The state owns the actual roadway and the State Highway Administration (SHA) has been chomping at the bit to repave Baltimore Avenue and bring sidewalks into Americans with Disabilities Act (ADA) compliance.
The major renovation of the corridor, marked by countless unsightly utility poles and overhead wires, has been a top priority for town officials, who asked SHA to put their repaving project on the backburner until a plan could be developed and way to pay for reconstruction was developed. McGean said on Tuesday the scope and price tag of the Baltimore Avenue project had been adjusted since the CIP was presented two weeks ago.
“The Baltimore Avenue project has changed to include undergrounding utilities and the cost has been changed to $20 million,” he said. “That was voted as critical by everyone.”
McGean said the project would need to be coordinated with SHA, and the utilities including Delmarva Power before a true estimate can be derived and the project can be put out to bid.
“Baltimore Avenue will need a lot of design work,” he said. “There’s no way to go to the bond market with a good estimate without a lot of design work by all parties, so you see it has been moved to fiscal year 2024.”
Public Works Director Hal Adkins said he had a conversation this week with SHA about Baltimore Avenue and there was good news and bad news.
“Unfortunately, the Mayor and Council put it on hold for good reasons,” he said. “The federal funding for sidewalk projects has evaporated, but they are ready to do Baltimore Avenue from the Inlet to Caroline Street. They will continue to wait on Baltimore Avenue to 15th Street.”
Even with SHA’s willingness to delay the next session, Adkins said the time is now to begin preliminary design work.
“This will be my fifth phase of the redevelopment of Baltimore Avenue since 1987,” he said. “My recommendation is if you’re serious about this project, we need to get moving on it now.”
When asked if the town had dragged its feet too long on the Baltimore Avenue project, McGean said there is still time to go forward with the comprehensive project.
“Baltimore Avenue will have to be repaved at some point soon, and when SHA repaves that section, they will have to make the sidewalks ADA-compliant at the same time,” he said. “We wouldn’t want to go behind them and rip out the pavement and the sidewalks, but I don’t think you’ve missed that window.”
Councilman John Gehrig questioned if the inclusion of ongoing projects that are regularly funded during budget sessions merited their inclusion on the CIP. For example, street paving and canal dredging are regular fixtures in the annual fiscal year budget, yet they are listed as critical in the CIP rankings.
“With street paving and canal dredging, that’s normal maintenance that’s in the budget every year,” he said. “I’m not sure they belong in these rankings. They’re just things we need to do.”
McGean and Budget Manager Jennie Knapp said projects like street paving and canal dredging are included in the budget process each year, but they needed to be included on the CIP to identify a funding source. There are state highway user grants and casino grants that help pay for street paving, for example, but a portion of it comes from the town budget, which is why is needs to be identified on the CIP. McGean said it has been the town’s policy to include those types of projects in the CIP.
“That’s a policy decision for you all,” he said. “We do about $2 million per year in street paving and about $500,000 of that will come out of the general budget this year.”
Knapp said by including projects such as street paving and canal dredging in the CIP, funding sources are identified to ensure the projects are paid for without potentially influencing the property tax rate.
“Hal [Adkins] gets what he needs, and you get to maintain the constant yield tax rate,” she said. “We haven’t wanted to raise taxes, so we plan to fund these things in different ways.”
There are certain projects in the CIP considered critical and some viewed as “nice to haves.” For example, replacing the roof at City Hall falls in the third tier of “important projects,” but Councilman Lloyd Martin said staff might be in better position to determine where certain projects fall on the lists.
“We need to hear from staff about what they believe is truly critical and what we need to do,” he said. “If the roof is leaking and the doors are falling off their hinges, then the project becomes critical.”
McGean said the consensus appeared to be the Mayor and Council would like to hear from the department heads and staff on their own feelings about the rankings before making any hard decisions.
“From what I’m hearing, we’ll take your rankings and what we know at the staff level and recommend what is most critical and what is affordable,” he said. “This is just the plan. The hard decisions come during budget time and what to include. The other hard decisions are when you decide what to include in a bond sale.”
After evaluations are made, McGean will return with a version of the CIP which reflects staff recommendations. McGean told the Mayor and Council that might provide some clarity for an elected body so divided in the rankings for many of the projects.
“Each of you has a little different philosophy in terms of your rankings,” he said. “My advice would be don’t focus so much on how it can be paid for, but on what you think is most important.”