OCEAN CITY – Officials in Ocean City voted unanimously this week to approve the first reading of the fiscal year 2024 operating budget.
On Monday, the Mayor and Council had before them a first reading of the proposed operating budget for fiscal year 2024. The spending plan, which totals $155,155,151, includes a general fund budget of more than $105 million and a tax rate of $0.4526 per $100 of assessed value.
“I’d like to thank our budget manager, the city manager and all the department heads for bringing forward a responsible budget and for holding the tax rate at the same rate it was last year, while at the same time continuing to fund all the necessities that we have funded in the past and continue to fund in the future – our street paving, our canal dredging,” Mayor Rick Meehan said.
In March, City Manager Terry McGean and Budget Manager Jennie Knapp presented the Mayor and Council with the fiscal year 2024 budget. And over the course of two weeks, city officials held a series of budget work sessions to discuss topics such as emergency services and public safety requests, room tax, advertising and more.
On Monday, Meehan noted the budget presented for approval includes funding for new, fulltime police officers and firefighter/paramedics, as well as salary increases.
“It also included raises for employees, for part-time employees, to do the things we need to do to make sure we have employees here and that our employees are treated the way they should be in 2023 in Ocean City,” he said.
The Mayor and Council this week also held a public hearing on the proposed tax rate, which is the same as the current fiscal year budget. McGean noted the rate is 1.1% higher than the constant yield rate, or the rate needed to provide the same level of revenue for municipal services as the prior year.
“In order to fully offset the effect of increasing assessments, the real property tax rate should be reduced to .4476 cents per $100 of assessed value, the constant yield tax rate …,” he said. “The town is considering not reducing its real property tax rate enough to fully offset increasing assessments. The town proposes to adopt a real property tax rate of .4526 cents per $100 of assessment. This tax rate is 1.1% higher than the constant yield tax rate and will generate $474,189 in additional property tax revenues.”
During the public hearing, Ocean City resident George Leukel spoke against the proposed tax rate. He advocated for redirecting funds dedicated to advertising.
“We’re spending too much money on advertising. We’re going to spend another $5 million on advertising, on top of the $6 million we spent the year before,” he said. “You say we’re going to take in $400,000 for this 1% raise in taxes. Why don’t we take $1 million from the advertising budget we don’t really need and put it into taxes? That way we can just even it out and that way we won’t have to raise taxes.”
Anticipated revenue from real property taxes totals $43,219,002, officials noted this week. Meehan said that money funds 41% of the general fund.
“It’s interesting to note property taxes in the budget are only 41% of the general fund revenue,” he said. “So only 41% comes from property taxes. The rest is generated from other means such as room tax and different fees associated with tourism.”
Capital projects in the coming year’s budget totals $3.4 million, which includes $1.8 million for street paving, $1.5 million for the capital maintenance fund, and $100,000 for Boardwalk redecking.
Projects approved as “pay-as-you-go” in the capital improvement plan (CIP) will be funded through existing funds in the capital maintenance fund. That includes $1.1 million for street paving, $200,000 for canal dredging, $100,000 for storm drain cleaning, $100,000 for Ocean Bowl skate park repairs and $80,000 for City Watch surveillance cameras.
With little fanfare this week, the council voted 6-0, with Councilman John Gehrig absent, to approve the fiscal year 2024 budget on first reading.
