Ocean City Adopts Budget; Tax Increase Less Than One Cent

OCEAN CITY — City Council adopted the 2010 budget after making additional cuts that lowered the tax increase to less than one penny.
The municipal budget will result in a tax rate increase from 0.349 cents per $100 of assessed value in 2009 to 0.3587 cents, a .97 percent increase, with the total amount to be raised from taxes increasing from $44,697,831 in 2009 to $46,103,105 in 2010.
Spending cuts include $62,000 saved by eliminating raises for seasonal employees and the American Federation of Musicians Union. A state law change that eliminates dual benefits for employees and spouses that work for the public sector resulted in a $58,000 savings.
Also, the state law phases out stipends to employees who are covered by their spouse’s public health benefits saving $26,000.
The elimination of health benefits for elected officials also resulted in a savings that will be partially offset by salary increases. This change will help to contain the cost of benefits in the future. Benefits are expected to increase by more than 10 percent annually.
The total cut in expenses made at last Thursday’s Council meeting was $152,062.
Earlier in the budget process an additional $257,000 was cut including two performances of the Ocean City Pops, two fire vacancies – reducing the city’s full time workforce to 261 employees, and a capital project to clean up the 46th Street site was eliminated.
Also revenue enhancements were realized as a result of council action. In total, City Council cut $493,000 from the amount to be raised by taxes since the Jan. 14 budget was proposed by Mayor Sal Perillo.
The total full time staffing for Ocean City has been reduced by attrition from 291 in 2004 to 261 in the 2010 budget. The city also switched to State Health Benefits resulting in an $800,000 savings.
City Council also approved a labor contract with the PBA that will increase their contribution to health benefits effective Jan. 1, 2011. City Council had requested that labor contracts be reopened to provide give backs.
The PBA which represents the officers of the Ocean City Police Department is the first to advance an acceptable proposal to provide higher contributions towards the cost of health benefits.
The PBA action will result in about $50,000 in additional funds towards health benefits in 2011 by contributing 1.5 percent of their salary towards health benefits – one year earlier than it is required by State law.
Perillo noted, “We applaud the PBA for the leadership that they have provided. We know that health benefit costs will continue to rise and their action will help the city to reduce the impact on taxpayers.”
Also, City Council approved a contract with the Ocean City Pops resulting in no salary increase in 2010. Negotiations continue with the five other unions that represent the city’s employees.