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After Deliberation, Change, City Council Adopts Budget

The tax rate and the tax levy remain the same, but changes were made to the fund balance and capital reserve.

After one last change, Ocean City Council adopted the 2014 municipal budget by a 5-2 vote at its first meeting in City Hall since Superstorm Sandy Thursday night.

It took a while to get to that change, though.

Council ultimately passed a $69,861,684.60, up from the $69,775,684.60 introduced to council last month. The tax levy remains $44,793,202.78, up 2.57 percent from last year’s budget.

The local tax rate increases by 3.7 percent.

An Ocean City home assessed at $500,000 would see an annual increase of $73.

The change comes in the form of a reduction to the city’s fund balance. It had $5.8 million available, and was to use $2.8 million of that to fund the budget, leaving a remaining balance of $3,011,666.28.

However, councilmen Keith Hartzell and Scott Ping felt the balance was too high. According to Chief Financial Officer Frank Donato, it was the highest fund balance in the city’s history.

Hartzell thought the fund balance was too high by $500,000 and said he would like to see $250,000 removed from it to be bonded. That would cost the city about $90,000 a year for the next 10 years. Ping recommended using the money for a one-time project rather than bond it, and Hartzell agreed.

“If we earmark it and use it for the top five roads that don’t need drainage and curb improvements, we could do five blocks,” Ping said.

“I’m OK with the fund balance because we’re not sure what’s going to happen,” Council President Anthony Wilson countered. “I have no problem saving that money.”

Ping and Hartzell said the city would make the money up over the course of the summer. They said the city can expect revenues to be higher than last year, the first summer following Superstorm Sandy when tourists were uncertain about the shape of the Jersey Shore at the start of the season.

Business Administrator Mike Dattilo disagreed. He said that while revenues should be up, there are no guarantees.

“We’d be a couple of rainy weekends away from being in trouble,” Dattilo said.

Wilson suggested moving the money into the capital reserve, but Ping and Hartzell each initially insisted on setting the funding aside for a certain project.

“If you leave it and say you’re going to use it later, it’s not going to happen,” Hartzell said. “It’s kind of like it’s there and you forget about it. I’d like something in writing.”

Donato added that moving that amount of money into the Capital Reserve would delay adoption of the budget, as such a big change would necessitate readvertisement.

Any amount set aside would have to be lower than $88,000.

Ultimately, Hartzell proposed an amendment that would move $86,000 out of the fund balance and into the capital reserve.

The new balance became $2,925,666.28, and the capital reserve increased from $880,000 to $996,000.

The amendment was adopted by a 4-3 vote, with Wilson, Council Vice President Michael Allegretto and Councilman Antwan McClellan opposed.

The budget was then adopted by a vote of 5-2, with Ping and Councilman Peter Guinosso opposed. Guinosso continued to express concern over the need to help certain community outlets, including the Aquatic Center and the Ocean City Pops. He maintained his position that those groups needed help balancing their budgets, but Donato argued those changes could be made within the individual groups.

Following the adoption, Hartzell clarified he felt the budget was “a responsible budget” outside the fund balance.

“It’s an excellent budget and a job well done,” Hartzell said.

AB April 25, 2014 at 10:38 PM
They actually have a similar number of dwellings.
Bill Hartranft April 26, 2014 at 08:44 AM
We moved here from Oaklyn(.9 tenths of a mile borough) in 2007 from a 2 br Cape Cod with a small parcel of ground..5k sq ft. Taxes were 3650 a year. .here, 3 br condo, 552 paces from the beach, taxes are 2600 a year. There's always a positive side to things if you look for it. Tax spending still could be better managed.
Maggie Stern April 26, 2014 at 12:37 PM
Frank: I expect when someone is spending my money they should fight for me to get it back when the city boasts of the largest fund balance ever!!! like Hartzell "started" to do then caved as usual……what he got out was rediculous comapred to his rhetoric. thank you Ping and Guinosso.
Curious Mermaid April 26, 2014 at 08:30 PM
@big c , i'd like to know how many of our Fire/police/emt's live on the island. The ones I know all live in EHT.

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