City Council Approves Revised Budget With Tax Increase

By DONALD WITTKOWSKI Voting 4-3 after a lengthy debate Thursday night, City Council approved an amended 2022 municipal budget that adds a $770,000 payment to settle a financial dispute with the city’s trash contractor. The payment to trash hauler Gold Medal Environmental will result in a small tax increase for Ocean City property owners, a development that drew objections from the three Council members who voted against the $89.6 million budget. Councilmen Bob Barr, Tom Rotondi and Keith Hartzell said they would have preferred to use more of the budget’s surplus funding or tap into the COVID-19 recovery money the city has received from the federal government to avoid a tax increase. “I’m not comfortable changing up in midstream,” Barr, the Council president, said of the switch from the original budget proposal of having no tax increase to an amended spending plan that raises the tax levy. Frank Donato, the city’s chief financial officer, and Leon Costello, the city’s auditor, said the tax increase will be slightly less than a penny on the tax rate. For the owner of a home assessed at $600,000, it will mean an extra $41.33 annually in local taxes. Before the city and Gold Medal came to agreement on the $770,000 payment in the last two weeks, the proposed budget had called for no tax increase. Rotondi, Council’s vice president, questioned whether the city administration headed by Mayor Jay Gillian had known that a tax increase was coming down the road, but didn’t reveal it before the May 10 municipal election to avoid drawing the wrath of voters. Hartzell, who is leaving Council, lost to Gillian in the mayoral race during the election. “To me, there’s no doubt in my mind we were going to get a tax increase,” Rotondi said. In response, City Business Administrator George Savastano said the administration was transparent with Council during the Gold Medal negotiations and didn’t know there would be a tax increase in the budget until after the election. “This was as transparent as it could have been with the City Council,” Savastano said after recapping the chronology of negotiations between the administration and Gold Medal. Council members Karen Bergman, Pete Madden, Terry Crowley Jr. and Jody Levchuk voted for the amended budget. All of them expressed regret that a tax increase is included in the revised spending plan, but thought it was the best option to pay Gold Medal. “It stinks, the inflation climate we’re now in,” Bergman said of the higher costs for trash collection and other expenses. Chief Financial Officer Frank Donato speaks to Council about the budget. In remarks during the Council meeting, Donato repeatedly stressed that he felt a small tax increase was the best way to minimize what could be even more serious financial consequences next year, when trash-hauling costs and other budget expenses are expected to be even higher in an inflationary environment. “It’s a financial move we feel is prudent,” he said. Madden said that as tough as it was to approve a tax increase, Council’s job “is not to make an emotional or political decision.” In addition, Madden warned of “a dangerous game of unintended consequences” for the city if it didn’t follow the financial plan outlined by Donato. Donato explained that a tax increase this year will allow the city to preserve its remaining budget surplus to help pay for higher costs in 2023. He also said the city wants to use its COVID-19 recovery funding to pay for a stormwater pumping station to help protect the city from flooding. He felt it would not be appropriate to tap into the COVID funding – which is for one-time expenses – for higher trash collection payments that will be a revolving expense. “Trash is not a one-time expense,” he said. City officials said they had no other choice but to negotiate a new deal with Gold Medal in light of the disruptions and higher fuel costs that are shaking the trash industry during the pandemic. 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 initially demanded that Ocean City pay an additional $1.4 million for the balance of 2022, the city said in a statement. Eventually, both sides agreed to the $770,000 payment. During an interview in May, Gold Medal CEO Darren Gruendel said his company could no longer afford to continue to provide waste-hauling services at the price specified in its contract with Ocean City. He said Gold Medal has experienced labor shortages, COVID-19 disruptions and a 300 percent increase in fuel costs since the pandemic began. In addition, Gold Medal sees its service hours in Ocean City soar by 400 percent to 500 percent during the busy summer tourism season, he said. In a related development at its meeting, Council voted to seek bids for new trash and recycling collection contracts starting next year. Bids are due Aug. 16. The contracts are expected to be awarded on Aug. 25. The city plans to have a new waste-collection company on board by Jan. 1, 2023. Gold Medal Environmental is the city's waste hauler. (Image courtesy of YouTube.com) Also during Thursday’s meeting, Council voted to reinstate the Ocean City Sentinel as the official newspaper for Ocean City. Last year, Council stripped the Sentinel of its official designation following the publication of two columns that were branded as “disgusting.” Council said that the Sentinel now meets all legal requirements for being the official paper, and that the city would risk legal action if it did not reinstate it. Last year, the Council members condemned the Sentinel for publishing guest columns that appeared to threaten the life of two elected officials -- U.S. Rep. Jeff Van Drew and former City Councilman Michael DeVlieger -- and also raised fears that their families could be harmed. At the time, some members of the public mistakenly believed that OCNJDaily.com had published the columns instead of the Sentinel. Ken Wisnefski, owner of MediaWize, the company that publishes OCNJDaily.com, received several calls and emails threatening to harm him and his family due to the confusion over which publication printed the columns. Wisnefski issued a statement harshly criticizing Council and the mayor after the Sentinel was reinstated as the city’s official paper. “I was very disappointed with the decision to reinstate the Sentinel,” Wisnefski said. “Councilman Terry Crowley provided genuine concern for my situation and what my family went through. Ocean City is great place with many great people and I am genuinely fearful that the City we all love so much will be ruined by the current City Council and the Mayor. I have lost all respect for them. It’s sad to see.” Ocean City resident Dave Hayes also blasted Council for the decision to designate the Sentinel as the official paper. Hayes said the Sentinel’s columns targeting Van Drew and DeVlieger were reprehensible action that amounted to blowing “a dog whistle” against conservatives in Ocean City. Council approved a resolution in 2021 formally demanding an apology from the Sentinel’s editor and publisher, David Nahan, and from John McCall, the guest columnist who wrote the inflammatory opinion pieces printed in the weekly newspaper on Jan. 13 and March 10 of last year. Nahan later apologized for the columns, saying it was wrong for the Sentinel to have published them. Noting that Nahan apologized for his “horrific mistake,” Hartzell said he thought it was appropriate for the city to reinstate the Sentinel at this time. “Our job is not to punish someone we may have disagreed with,” Hartzell said. In his columns, McCall branded DeVlieger and Van Drew, whose South Jersey congressional district includes Ocean City, as “traitors” to the U.S. government for their support of former President Donald Trump. “Like all Trump loyalists, Van Drew and DeVlieger are guilty of subverting the peaceful and equitable functioning of our government. This is not just a moral failing. This is treason. And the penalty for treason is execution. That applies to the great and the small, to presidents, congressmen and smalltown councilmen. It’s the trickle down theory of responsibility,” McCall wrote in his Jan. 13, 2021, column. Van Drew said during a 2021 news conference that McCall’s column on March 10 also “vividly describes invading and destroying (Van Drew's) home, and graphically ponders what it would be like to sexually assault his wife over the hood of her car.” After the columns ran, Council also approved a resolution that questioned whether the paper was following the requirements of its designation as the official newspaper of Ocean City, including whether it is printed within the state of New Jersey. However, Council said it now has assurances from the paper that it is printed in New Jersey. Barr, who is a close friend and longtime associate of Van Drew’s, noted that he was incensed over how the congressman and his wife were treated by the Sentinel and McCall. But at the same time, Barr said he hoped that Nahan and everyone else would learn from the experience “and move on.”