City Council Delays Vote on 2022 Budget

City Council Delays Vote on 2022 Budget

1332
SHARE
City Council will consider the municipal budget on May 26.

By DONALD WITTKOWSKI

City Council held off voting on the 2022 municipal budget Thursday night while negotiations continue on a trash collection contract that could impact the proposed $88.8 million spending plan.

The decision to postpone a budget vote until the May 26 meeting came after Council went into executive session for an hour and 20 minutes to discuss the trash contract and possible litigation against its waste-hauling company, Gold Medal Environmental.

Chief Financial Officer Frank Donato told Council that the city continues to bargain with Gold Medal, but at this point it is unclear what impact a renegotiated trash contract might have on the budget. He asked Council to table the budget in the meantime.

Although negotiations continue, Donato noted there is the potential that the trash contract may end in litigation between the city and Gold Medal.

For now, Gold Medal has agreed to “fully honor” its trash and recycling contract while negotiations continue to resolve a financial dispute, city spokesman Doug Bergen said in an email last week.

Gold Medal has been under contract to provide trash and recycling pickups for Ocean City for the past four years at about $1.5 million annually. With less than a year remaining on a five-year contract, Gold Medal demanded that Ocean City pay an additional $1.4 million for the balance of 2022, the city said in a statement.

Gold Medal Environmental is the city’s waste hauler. (Image courtesy of YouTube.com)

The controversy began when Gold Medal issued a news release on April 29 stating that it would cease recycling pickups in Ocean City as of May 2 because it had been unable to reach an agreement with the city.

The company said in the release that “extreme inflationary emergency and pandemic driven labor market shortages have made it broadly impossible to perform labor and fuel intensive services at existing contract levels.”

However, the company resumed recycling pickups last week while both sides continue negotiations, Bergen said in the email.

As it currently stands, the city’s proposed budget does not include a local tax increase. The average property owner with a home assessed at about $650,000 would pay $3,068 annually in local taxes, Donato said. That figure does not include school or county taxes.

Shaking off the effects of the COVID-19 pandemic, the city’s finances are benefiting from the Jersey Shore’s booming real estate market as well as higher revenue from proven moneymakers such as beach tag sales and parking fees.

Donato said when the proposed budget was unveiled in March that the robust real estate market has been fueling growth in Ocean City’s tax base. This year, the city saw $174.5 million in new ratables and now has a total tax base of nearly $12.3 billion, budget figures show.

Chief Financial Officer Frank Donato tells Council there is a potential for litigation between the city and its trash contractor.

Reflecting Ocean City’s strong finances this year, the budget surplus shot up to a record-high of $10.4 million. Of that amount, the city is proposing to use $5.4 million to help underwrite the budget, while the remaining $5 million would stay in reserve in case it is needed in the future.

In other business Thursday, Council awarded a $60,680 contract for new jitney service this summer that will offer two routes serving the Boardwalk and the Asbury Avenue downtown shopping district.

Dan Kelchner, the city’s director of Community Services, said the Boardwalk route is scheduled to begin May 27 and run through Sept. 5. The downtown route will operate from June 14 to Aug.  25. The jitney fare will be $2.

Kelchner emphasized that the jitney service is a pilot program that will give the city flexibility to make adjustments based on ridership, service levels, special events in town and even weather conditions.

“We look forward to introducing something that will absolutely be a benefit to the community through the summer and into the future,” he said in an interview after the Council meeting.

The route serving the Boardwalk will start at 55th Street and West Avenue. It will run along West Avenue to 14th Street, switch over to 14th and Ocean Avenue, then to Ninth Street and Ocean, then Ninth and Atlantic Avenue and then finish at Sixth Street and Atlantic. The jitneys will turn around on the block of Sixth Street and reverse the route back to 55th Street.

The Boardwalk route will operate seven days a week, from 5 p.m. to 11 p.m.

For the downtown service, jitneys will run along Asbury Avenue between 55th Street and Battersea Road. Days of operation will be Tuesday, Wednesday and Thursday, from 10 a.m. to 2 p.m.

The Atlantic City Jitney Association will be Ocean City’s jitney contractor. (Photo courtesy of Wikipedia)

The benefits for jitney riders include low cost, convenient transportation that will relieve them of the hassle of trying to find public parking during the busy summer tourism season.

Ocean City’s contractor will be the Atlantic City Jitney Association, which has provided jitney service in Atlantic City for more than 100 years. The ACJA also provides jitney service under contract with Avalon and Stone Harbor.

“I am confident they have the level of expertise and experience needed to address our Community’s needs,” Kelchner said of the ACJA in a memo attached to the Council agenda.

Another aspect that sets the ACJA apart from other jitney operators is a proprietary mobile app that will allow riders to view the locations of jitneys along the Boardwalk and downtown routes in real time, Kelchner said.