By DONALD WITTKOWSKI
Emphasizing Ocean City’s strong finances, Mayor Jay Gillian announced Thursday night in his annual State of the City address that there will be no tax increase in the 2022 municipal budget.
“I’m here to report tonight that the state of the city is stronger than it’s ever been,” he said while delivering his speech during a City Council meeting.
“We continue to make improvements to every part of town,” he continued. “We’re adding new services and preserving the traditions we love. We have an experienced and dedicated city team that makes it all possible. Ocean City remains a great place to live, work and play. Investments in Ocean City are sounder than ever.”
Gillian noted that the city continues to benefit from a booming real estate market that has been fueling growth in the local 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.
Shaking off the sluggish economic effects of the COVID-19 pandemic in 2020, the city’s beach tag sales and parking revenue rose to record levels last year amid a strong summer tourism season, Gillian said.
Overall, the city’s surplus funding has shot up to a record-high of $10.4 million. The city’s robust finances mean that there will be no tax increase in the proposed $88.8 million municipal budget for 2022, the mayor pointed out.
“With everything that’s going on in the world, I think it’s important to come in at zero this year,” Gillian said of not having a tax increase. “We always have to consider how inflation and other global issues might affect Ocean City. But I’d like to put that aside for a moment and send our thoughts and prayers to the people of Ukraine. They deserve our full support.”
Although Gillian touched upon aspects of the budget in his State of the City address, Chief Financial Officer Frank Donato will give City Council a detailed overview of the spending plan at the March 24 meeting.
Gillian’s budget proposal coincides with his re-election campaign. He is seeking to win his fourth term in the May 10 municipal election, but is facing a challenge from Councilman Keith Hartzell. In order to run for mayor, Hartzell will leave his at-large Council seat.
During his address, Gillian highlighted an array of infrastructure projects that have either been completed or are planned by his administration, including road work, flood mitigation, improvements to the Boardwalk, a multiyear dredging program for the waterways and the renovation of city buildings.
“I’m proud that we were able to accomplish so much this year, and we have plans in place to keep the momentum going in 2022,” he said, while also thanking members of his administration for their “commitment to all taxpayers.”
Gillian plans to present his 2023-2027 capital plan – a broad blueprint for construction projects and infrastructure improvements across the island – before the end of the year.
About $4.9 million in COVID relief money that Ocean City received from the federal government in 2021 will help fund flood-mitigation projects and cybersecurity upgrades.
“As always, everything we do is with the taxpayer in mind. Including this budget, we have come in at zero for three of the past four years,” Gillian said of the city’s stable taxes.
He concluded his remarks by pledging to continue to promote Ocean City’s image as “America’s Greatest Family Resort.”
“We will make sure our city is clean, safe and family-friendly,” he said. “We share a common mission to make sure future generations can enjoy the town we all know and love.”
In other business Thursday, Council introduced two bond ordinances to help fund the purchase of three separate tracts of land that will now be converted into public open space. The bond ordinances are scheduled for a public hearing and final vote at the March 24 Council meeting.
Overall, the three sites comprise a full block of land bordered by Haven and Simpson avenues between 16th and 17th streets next to the Ocean City Community Center. The land will be added to a corridor of open space protected from dense housing construction.
However, the red hot real estate market has increased the value of the land since the city first began acquiring it. As a result, the city will pay millions of dollars more to close the deal.
One of the bond ordinances is for $3.15 million to help the city buy two sites at 109 16th Street and 1600 Haven Avenue from Palmer Center LLC, a group headed by real estate developer and former City Councilman John Flood.
Of that money, about $1.6 million reflects the higher value of the land and another $1.6 million will go for environmental cleanup. City Solicitor Dorothy McCrosson, however, said the city will seek repayment of the environmental cleanup costs from Palmer Center LLC after the remediation is completed.
With the extra $1.6 million added to the purchase price, the total cost of buying the Palmer Center property will increase from $5.6 million to $7.2 million, McCrosson said.
The second bond ordinance introduced by Council is for $3.11 million in funding to complete the purchase of land that once served as the site the former Perry-Egan car dealership. The property is bordered by 16th Street, Haven Avenue and Simpson Avenue and was owned by brothers Jerry and Harry Klause of Klause Enterprises.
The Klause brothers had wanted to build a 22-unit housing development on the site before the city stepped in to acquire the land. The city initially planned to buy the Klause property for $6.9 million, but rising land values will up the price to $9.96 million, McCrosson said.
With the acquisition of the Palmer Center and Klause properties, the city plans to dedicate a five-block area from 15th Street to 20th Street to open space and public use. The public corridor of land will stretch from Emil Palmer Park to the Ocean City Community Center and up to the Ocean City Intermediate School.
