2-Cent Tax Rate Drop Eyed In Ocean City

OCEAN CITY - With the summer season on the horizon, it's that time of year when the city's budget for the next fiscal year is proposed, and according to City Manager Dennis Dare, it will be the fifth year in a row city officials have been able to lower the property tax rate.

'The preparation of the annual budget may be the most difficult thing we do, but it is arguably the most important,' Dare said. 'For it is the budget that sets forth the blueprint of services to be provided.'

According to Dare, the current tax rate for the fiscal year of 2007 was 43 cents per $100 of assessed valuation. Dare is proposing reducing the property tax rate to 41 cents.

Although a constant yield of 36.1 cents was estimated, increased costs of providing services in public safety, increased salaries, benefits and new personnel accounts for an extra 2.4 cents on the tax rate. Dare went on to say increases in salaries and benefits for general service employees end up equating for a 1.9-cent increase.

'Funding of the town's match of capital projects for transportation and airport add $225,000,' Dare explained, 'and 'Pay as You Go' capital projects are funded at $931,615 more than in fiscal year '07.'

These two items, according to Dare, add an additional cent to the tax rate. Combined with the other increases with the constant yield, the tax rate levels off at the estimated 41 cents. Although this figure doesn't take into account the rising costs of energy, fuel and other commodities, decreases elsewhere in the budget were able to cover the costs, according to Dare.

Dare added the assessed value of real property in Ocean City has continued to rise with a 23.8-percent increase.

'Other notable increases in revenue include an additional $375,000 in room tax and $35,000 in parking revenue,' he said.

However, not everything was on the rise as the proposed budget shows a revenue decrease of $230,000 in Federal Emergency Management Agency (FEMA) grant revenue while most other revenue categories remain steady.

The largest expense in the budget by far is personnel with salaries for non-public safety employees increasing $1.1 million. Included in this increase is a 3-percent cost of living adjustment and other annual increments. Also taken into consideration was the addition of several new positions from an engineering surveyor to fulltime parks maintenance workers whose sole responsibility will be to concentrate on landscaping

Dare also said salaries for public safety employees increased $1.3 million and include two new civilian positions in the police department.

'These new hires will allow sworn police officers to return to the field,' Dare said. 'A new pay scale for part-time officers in the police department has also been included to attract retired officers to augment our force during peak times such as Bike Week.'

Other new positions include the addition of six more full-time employees for the paramedics and firefighters beginning in March 2008.

Other general fund cost increases included increases in health insurance, pensions, retiree health insurance, energy and fuel and an increased contribution to the transportation fund.

The FY '08 budget contains several maintenance items as well including $140,000 in bulkhead maintenance, $149,000 to replace the roof on the east gym at Northside Park and  $196,775 for carpet replacement at the convention center.

However, Dare said not included in the budget were funds needed for the planned downtown parking garage. Since a grant from the state that would cover half the cost of the design process in the amount of $400,000 is not conclusive yet, along with smaller grant for $60,000, Dare said he and other officials decided to leave it out of the budget and use other measures to account for the rest of the money needed.