Draft Budget Breakdown, Library Tax Explained at Ocean City Council Meeting

Ocean City, NJ -- When Ocean City Mayor Jay Gillian introduced his draft budget at the Feb. 11 meeting, he said he intended to introduce a budget with no tax increase.

However, the City will see less money from the library this year, and the result is a draft budget that includes a 1.1 cent property tax rate increase.

This means the owner of the average $500,000 home in Ocean City would see a $55 increase in their municipal taxes.

At the time, Gillian said the increase from the library is due to state law.

During the Feb. 25 council meeting at City Hall, Ocean City Chief Financial Officer Frank Donato said that law was put in place a few years ago, and it took away the library’s reserve funding. As a result, the library must use more of its fund balance to pay for projects, and the result is less money to be returned to the taxpayer.

For example, in 2012, the library began the year with a fund balance of $2,932,671.09, and finished the year with a $2,681,870.40 fund balance.

The library began 2015 with $1,120,862.58, and finished the year with $483,133.70.

“I want everyone to know that the volunteer library board does a great job, and I appreciate all of the hard work they put into the operation of the library. I personally would like to thank Jen Shirk, who has chaired the board for a couple of years now and led the board through the difficult time following the passing of Chris Maloney,” Gillian said in his weekly address posted on the City’s website the following day. “By no means was I pointing blame at anyone. I was frustrated we could not bring council a budget with a true zero percent increase. I hope that no one took my comments personally and I want the public to understand the way the library financing operates. Our strong ratable base allows our library to be the best in the state and we are all very proud of the programs and services they offer.”

Donato clarified the library situation during his presentation on the administration’s $74,235,724.42 draft budget. It’s a proposed 0.91 percent increase over last year’s budget.

Donato explained that the City remains well below the spending cap and the 2 percent levy cap, and that the City’s surplus is $3,297,687.17, about $370,000 more than it was last year. The City’s fund balance is $6,947,687.17.

According to the five-year capital plan, the City intends to spend $34.2 million this year, and $98.5 million over the next five years on various improvement projects across the City, including $17.4 on road and drainage improvements.

Ocean City will pay $29,503,600 in salaries and wages this year, its biggest expense, but also down 0.58 percent ($172,000) from last year despite maintaining 258 employees. This is two more than in 2014, but down from 261 in 2010. The City was down to 250 in 2011.

“We realized that was probably too low and we started to bring that number back up,” Donato said.

Public Works was cut from 50 to 46 from 2010-11, but is now back up to 52. It had 50 employees from 2012-15, and Council President Keith Hartzell asked Donato for specifics on the two new employees, which is pending.

Community Operations had 70 employees last year, but the department was dissolved and staff was reassigned.

The City has $11,437,398,224 in ratables, an increase of $140,884,926 from last year.

Its debt service is $11,239,659, an increase of 6.5 percent from last year.