OCEAN CITY – An ordinance authorizing the sale of $28 million in general obligation bonds will advance to a first reading following council approval this week.
On Tuesday, the Mayor and Council agreed to move forward with a list of fiscal year 2024 projects that will be funded through a bond sale tentatively set for Dec. 12. The council also voted to advance for first reading an ordinance authorizing the sale of general obligation bonds not to exceed $28.41 million.
“We have three water projects, two general fund projects – Montego Bay street paving and the OCPD mixed-used facility downtown – and also convention center improvements,” Finance Director Chuck Bireley told the council this week. “What I’ve listed here are not to exceed cost estimates, meaning we can borrow up to this amount, but we can also borrow less if the final bids come in less.”
As proposed, the bond sale will finance a $2.2 million water main upgrade on 94th Street, an $11.25 million clarifier improvement project at Gorman Avenue Water Treatment Plant, and a $2 million chloride system addition at Gorman Avenue Water Treatment Plant, with the debt service of each project to be paid by user fees. Bireley, however, noted that the town has yet to receive final bids on two of the projects.
“They are expected to be received by the end of October,” he said. “But in an effort to keep this whole process moving along, we have a tentative bond sale date of December 12. And once the second ordinance is approved … the general public does have 45 days from the date of the second ordinance to voice any objections.”
The bond sale will also finance a $4.26 million downtown mixed-use facility for the Ocean City Police Department and a $2.5 million street paving project at Montego Bay. Officials noted that specific project was above and beyond what the town typically allocates for street paving.
“So it doesn’t affect the $2.5 million we are spending on our regular street paving projects,” Mayor Rick Meehan said.
City Manager Terry McGean added the bond sale will also finance $4 million in improvements to the convention center, the debt service of which will be paid for by food tax revenue. He noted that was nearly $1 million more than he initially requested.
“What it does is include replacing all the carpet on the second floor,” he said.
Bireley said cost estimates of $28.21 million and bond issuance costs of $200,000 brought the total not-to-exceed estimate to $28.41 million. He said that would result in an annual debt service of $2.07 million – $1.12 million for the water department, $292,447 for the convention center, and $655,079 for the general fund.
After further discussion, the council voted 6-1, with Council President Matt James opposed, to approve the list of FY24 projects and advance the bond ordinance to first reading.
