$4 Million Tax Increase Under Consideration For Ocean City Residents

OCEAN CITY, NJ — The average homeowner in Ocean City would pay an additional $143 in municipal taxes under a $79,657,919.38 draft budget proposed by Mayor Jay Gillian Thursday night. The 2.85 percent tax rate increase translates to an extra $36 a quarter.

The overall increase over last year’s budget would be $4,188,420.59, an increase of just over 5 percent.
Gillian said the increase was necessary to help with $33 million in new road, drainage and infrastructure work. Debt service on recent projects also contributes to the increase, Gillian said.

“I never like to see taxes go up by even a cent, but this work has to be done,” Gillian said during his State of the City address.

Gillian spoke about the fact that he’s held eight different town hall meetings in the last year, and the thing he’s heard time and time again is that residents want to see things fixed. He said that will be the focus this year.

“People want one thing: For us to fix the city’s streets, waterways and facilities,” Gillian said. “We still have a lot of work ahead, but I’m proud of what we’ve accomplished.”

On Thursday night, city council unanimously passed a proposed bond ordinance on second reading to appropriate $12,182,500 and borrow $11,573,375 in bonds and notes for various improvements.

This includes borrowing:
$665,000 for streets, alleys and drainage ($700,000 appropriated);
$950,000 for back bay dredging ($1 million appropriated);
$6,232,000 for various boardwalk improvements ($6,560,000 appropriated);
$1,410,750 for the rehabilitation and repair of various public buildings, including the 29th Street Firehouse ($1,485,000 appropriated);
$1,211,250 for the repair and rehabilitation of public buildings, including the Community Center $1,275,000 appropriated);
$729,125 for the purchase of various pieces of equipment, including a police SUV ($767,500 appropriated); and
$375,250 for the acquisition of various equipment, including for the fire, police and beach patrol ($395,000 appropriated).

Councilmen Keith Hartzell and Michael DeVlieger assured residents in their comments that each project would still be properly vetted before final approval is granted.

Hartzell also praised the administration’s work on putting the budget together, saying this year was particularly difficult because of all the projects that need to be done.

“Ten years from now, people will be happy we did this,” Hartzell said. “It was a little bit of a shock when we first saw it, but there’s really nothing in there you could say no to.”

Other factors contributed to the budget increase, including increased health care premiums for public employees of about $1.1 million. The number of full-time city employees decreased by one, to 257, but there were contractual increases of 1.25 percent across the board.

The city’s fund balance is down for the first time in about four years, but Gillian said the level is “still responsible” and will help Ocean City maintain its AA bond rating. While the city made as much as it expected last year, it didn’t greatly exceed those expectations, and tighter budgeting has resulted in a smaller fund balance, Gillian said.

On a positive note, the combined value of all taxable property in Ocean City increased by about $120 million, up to $11.56 billion, last year. This results in the reduction of about half a penny in taxes.

“Finance Director Frank Donato will explain more in his budget presentation on March 9,” Gillian said. “For the extraordinary amount of work that is getting done, I believe the budget is responsible.”

Following March 9’s presentation, the budget is scheduled to be introduced on March 23. City council will consider revisions during public meetings in the spring before the public hearing and final vote, tentatively scheduled for April 27.

To read the mayor's full State of the City address, visit ocnj.us.