Mayor Proposes $90.7M Budget with No Tax-rate Increase

OCEAN CITY – Mayor Jay Gillian presented a $90.7-million budget to Ocean City Council Feb. 28, one that does not include an increase to the municipal tax rate.
With a packed agenda, City Council began the meeting an hour early, with a presentation of a five-year capital plan taking place the same evening, laying out more than $100 million in spending on roads, infrastructure, beaches and more through 2023.
Gillian’s presentation included a State of the City Address, in which he described Ocean City as stronger than ever.
“In the past eight years, we have completed an unprecedented number of improvements to every part of town. At the same time, we remain responsible to taxpayers,” Gillian said.
Under Ocean City’s form of government, it is up to the mayor as the town’s chief executive to present a budget proposal to City Council, which can approve it as is or make changes. Plans call for council to introduce the budget March 14, after a detailed presentation by city Finance Director Frank Donato. That would put the city on track for a public hearing and final vote April 25, according to city spokesman Doug Bergen.
In his third term as mayor, Gillian has launched extensive infrastructure work in the city, tackling projects he said were too long neglected, including back bay dredging and drainage and paving work. But, he said, the process takes time.
Ocean City has 110 miles of roads, Gillian said, and has to tackle maintenance in pieces. He said projects were neglected previously.
“So we’re playing catch-up and we’re trying to maintain,” he said. In his comments, Gillian said improvements were made, with drainage projects having an impact on city neighborhoods and boaters able to use more back bay areas.
Coming up will be investments in affordable housing, a new public safety building and improvements at the Sports and Civic Center.
Spending is up in the proposed budget over last year, by about $369,000. Gillian said rising property values helped head off a tax hike.
“We saw $133 million in new ratables this year. A new arrangement for retirement health care benefits saved the city more than $2.2 million. Revenues from 2018 were up by about $280,000. These factors helped us continue our infrastructure improvements without raising the tax rate,” he said.
Gillian criticized a state plan to increase the minimum wage to $15 an hour, backed by Gov. Phil Murphy.
“In Ocean City, it will cost taxpayers almost $1 million to bring 640 employees (mostly young seasonal workers, often living at home with their parents) up to the minimum wage,” Gillian said. “That doesn’t even take into account the need to adjust pay scales for seniority, which will cost a lot more. Every town in the state now has to consider increased taxes and user fees, reduced or eliminated services, and job cuts as we work to absorb short-sighted laws like this.”
With a more detailed budget discussion planned for the next meeting, city administration members went over the five-year capital plan with members of council. None of the spending in the plan is set in stone, Gillian said, and Donato said there are “a lot of moving parts.”
He said he would usually have presented the plan to council in January. In some areas, he said, work continues on projects planned more than a year ago.
“There’s been so much construction going on in town it’s been somewhat difficult to fit all the work in,” he said, adding that utility work makes up part of that equation. “We don’t want to tear up the town too much all at once.”
As proposed, the plan calls for $33.25 million in work in 2019, to include $6 million in paving and drainage, $5 million on the beach and bay, $6.65 million on affordable housing and more spread over several categories.
One big number, the $17.5 million set aside for a new public safety building, was put under 2020. Numerous questions remain about that project, which will replace the current police department and municipal court housed in a century-old former school.
One proposal, to build at a former car dealership on 16th Street, seems to have been scuttled after the bond ordinance funding the purchase of that land was challenged in a petition drive.
The plan does include more than $2 million for work on the historic Music Pier on the boardwalk for 2019, along with $1.3 million for a second-floor renovation at the library and 2.2 million for work at the Civic Center at Sixth Street near the boardwalk.
The plan includes $5 million for beach and bay work, including $3 million for dredging this year and $2 million in local spending for the next round of beach replenishment, as the Army Corps of Engineers is expected back to rebuild eroded beaches this year.
Through 2023, the city expects to spend $11.4 million in that category.
Council members indicated that residents and property owners wanted to see improvements to the city.
“This stuff had to be done,” Councilman Keith Hartzell said. “People wanted the roads paved. We heard it over and over again. This is the culmination of that, of you guys listening to us and listening to the constituents.”
To contact Bill Barlow, email bbarlow@cmcherald.com.