Ocean City Mayor Jay Gillian, while delivering his annual "State of the City" address Thursday, said the local economy remains strong.
By Donald Wittkowski
Mayor Jay Gillian laid out what he called a "great forecast" for Ocean City, but expressed frustration that there will be some financial pain along the way -- a proposed penny increase in the local property tax rate.
Delivering his annual "State of the City" address to City Council on Thursday night, the mayor outlined a series of economic achievements in 2015 that are expected to position the town for further growth this year.
"As we like to hear in Ocean City, the forecast is great," Gillian said in his remarks.
The mayor also presented his proposed 2016 municipal budget to Council simultaneously with his speech. Gillian had originally planned to keep local property taxes stable, but learned this week that library funding that is returned to the city each year is expected to go down by $1.2 million in 2016.
As a result, his proposed $74.2 million spending plan includes a 1.1 cent increase in the property tax rate. If the budget is approved by Council without any changes, that would mean the owner of the typical home assessed at $500,000 would pay an extra $55 in municipal taxes in 2016.
Gillian told Council that he had a "horrible week" after he discovered that the decline in library funding would force him to raise the property tax rate.
Council will now scrutinize the budget for possible changes. A Council vote is expected sometime in March to formally introduce the plan, followed by a public hearing and final approval in April, according to the budgeting process.
Despite his disappointment with the proposed tax increase, Gillian said the city is in strong financial shape. He reported healthy gains in tourism, hotel bookings, beach tag sales and parking revenues.
"A record number of people enjoyed Ocean City's beaches and Boardwalk in 2015," he said.
During the peak summer tourist season, hotels were filled, most of the rock concerts on the Music Pier were sold out and local businesses were "off to the races," Gillian said.
The city pulled in a record $4.18 million in revenue from beach tag sales in 2015. More than 400,000 daily, weekly and seasonal beach tags were sold.
In addition, the city set a new record with more than $3 million in parking revenue.
Gillian said there are other signs the local economy will continue to grow. Weekly rentals, which he described as the backbone of the summer tourist season, were "absolutely outstanding" last year and are already off to a strong start for 2016.
The city's economic gains go beyond the tourism market, Gillian explained. Property sales rose 7.1 percent overall in 2015. Sales of single-family homes increased from 210 in 2014 to 236 in 2015.
"More and more people are investing in Ocean City as a place to live," Gillian said.
In another key metric, building permits for new construction have averaged 248 annually for the past three years, compared to an annual average of just 129 in the previous three years, the mayor said.
Ocean City is ranked third among New Jersey municipalities in terms of its combined real estate value. Its property tax base has grown from $11.3 billion to $11.4 billion, Gillian reported.
The higher tax base will help fuel a new $98.5 million, five-year capital plan to upgrade the city's roadways, beaches, Boardwalk, lagoons and public facilities.
"The biggest part of that investment will be dedicated to roads and drainage projects to benefit the quality of life in our neighborhoods and to improve our driving, biking and pedestrian experiences," Gillian said.
Much of the road and drainage improvements will target flood-prone streets. Last month's powerful nor'easter and another storm this week left many roads swamped with tidal flooding.
During the public portion of Thursday's Council meeting, Gillian got an earful from frustrated residents who have suffered from this winter's flooding. They complained that the city has been too slow to correct the flooding, but Gillian told them his administration is doing all it can to fix the roads and drainage system.
"It is time to get serious and do what is right for the taxpaying residents of Ocean City," said Burt Diamond, whose home at 341 Simpson Ave. was cut off by flooding this week.
Georgina Shanley, a resident of Bay Avenue for 30 years, said the flooding in her neighborhood seems to be getting worse. She called for a building moratorium until the flooding problem can be studied and solved.
"I think the big picture is, Ocean City is going to be submerged," Shanley said, while warning of rising tidal levels.
Gillian is proposing to spend $17.4 million on road and drainage projects in 2016 and a total of $34.6 million over the next five years as part of his capital plan.
He said the city has identified the most flood-prone neighborhoods and is working with engineering experts to mitigate the problem. Road improvements are planned for 26th Street to 34th Street, between West Avenue and Bay Avenue, and from First Street to Eighth Street, between West Avenue and the bay.
Council took the first step toward funding some of the capital projects by introducing a $17.5 million bond ordinance on Thursday.
The ordinance, up for a public hearing and final approval March 10, includes $800,000 for engineering and design work on roadway improvements.
The bulk of the bond ordinance would fund a $10 million dredging program this year that is a centerpiece of Gillian's capital plan. Dredging would remove mud and silt from the city's clogged lagoons along the back bays, another source of the flooding problems.
