By MADDY VITALE
In a time when COVID-19 has hurt residents and business owners, Mayor Jay Gillian decided that the city would work hard to introduce a 2020 municipal budget without a tax increase to take some of the burden off those affected by the pandemic.
On Thursday night during a remote City Council meeting, Gillian noted that when he initially presented his State of the City address in February, he unveiled a half-cent tax increase – equaling $25 additional for the year on a $500,000 home.
Instead, an $80.5 million spending plan was presented with a zero tax increase to property owners. Nearly $55 million in local taxes are the primary source for funding for the budget. The city is also using $4 million in surplus funds.
Voting unanimously, City Council members introduced the budget. A public hearing and final vote on the spending plan are scheduled for the June 25 Council meeting.
Through attrition, not filling job openings and scaling back in city departments, the city was able to present a budget that maintains all of the services the residents and business owners expect without raising taxes, Gillian said.
“Earlier this year, we did put a budget together, but things have changed rapidly. The one thing we have done, we've always taken our time and have been very careful when we come up with budgets,” Gillian said. “We always try to predict what is going to happen, but this is the one time we didn’t. But the one thing we did decide, with all of the sacrifices people have made, was to lead and make sacrifices.”
Chief Financial Officer Frank Donato explained that although COVID-19 has hit tourism-dependent Ocean City hard, as it has done with other shore communities, the city is fortunate to have an $8 million fund balance it was able to tap.
“Like the mayor said, since it (the municipal budget) was presented on Feb. 27, a lot has changed in the world and a lot has changed with this budget,” Donato noted. “The mayor thought it was vitally important to offer whatever relief we can.”
He explained how the city was able to do that by cutting $700,000 in expenses and holding off on filling open positions. It was also able to save money by not holding a live election. The City Council election on May 12 was conducted exclusively by mail-in ballots because of the pandemic.
“We also had to look. In Ocean City I always say we have a variety of revenue sources, but it also makes us vulnerable. Still, as we sit here today, we have no crystal ball,” Donato said.
But reasonable adjustments have been made, he said, adding that beach fees and parking revenue are vital funding sources for the city and they continue. He noted that the city-run aquatic center at the Community Center and other city-run programs have been closed for the past three months, which has hurt revenue.
“Tightening the belt on expenses and maximizing the revenue” were the main ways the city was able to balance the budget, Donato explained.
He said that the budget would have ordinarily been adopted by April but was postponed due to the coronavirus crisis.
Donato and City Business Administrator George Savastano will be meeting with City Council members individually over the next week to go over the budget and discuss possible changes.
Gillian thanked Donato, Savastano and the rest of the city’s team members that are handling the finances.
“I want to thank my team. From the beginning, it was going to be a rough year,” the mayor said. “We will still provide services Ocean City expects from us.”
During Council comment, Councilwoman Karen Bergman thanked Donato for his hard work in revising the budget.
“Kudos to you when an increase in February and then this time a zero percent increase. I also want to thank the people who cut their budgets in the departments. I am really excited about this budget,” Bergman said.
In other matters, the mayor announced that the city has filed legal action to acquire a large piece of property -- the vacant former car lot adjacent to the Community Center -- for open space.
The privately owned land encompasses the block bordered by Simpson and Haven avenues between 16th and 17th streets. The city wants to preserve the site for open space instead of seeing it developed for housing. Council has authorized seizing the land through eminent domain if the city can't negotiate a deal with the owners.
“This is just the beginning of a long process,” Gillian said of acquiring the site. “I am confident we are on a path to take control of the property by the end of the year and continue the efforts for the two adjacent properties.”
The 2020 municipal budget is scheduled for adoption on June 25. To view the proposed budget visit http://api11.team-logic.com/downloadPubNewsFile.cfm?i=242&t=172&f=86482&file=2
