We learn that upon adoption of the first budget amendment of this Fiscal Year (FY), the Mayor & City Council (M&CC) of the Town of Ocean City are sitting on $7,352,148, in excess reserves, over and above their stated policy of 15 percent of Unassigned General Fund Balance as a percentage of expenditures.
In fact, with just over four months remaining in FY20, they have a fund balance of about 22.6 percent.
This additional amount of over $7.3 million is the equivalent of over 8 cents on the current property tax rate.
In other words, last year the property tax rate could have been reduced over 17 percent, and the town would still have a current balanced budget with a 15 percent amount in reserves.
Last fall, we learned that the town closed its books at the end of FY19 with revenue up $1.3 million over budget projections, while expenses were $2.9 million under budget, thus creating a favorable variance of $4.2 million.
The M&CC have a longstanding pattern of underestimating revenue and overestimating expenses. This same scenario has occurred every year from FY13 to Fy19.
Over the last seven fiscal years, the total amount of underestimated revenue is over $7.8 million; and the total amount of overestimated expenditures is over $15.4 million. Thus, the total favorable variance over this period is in excess of $23 million.
As the M&CC begin their upcoming budget discussions, they should be encouraged to hold the line on spending, and adopt a property tax rate that is more realistic, and fair to the property owners of Ocean City.
Vincent dePaul Gisriel, Jr.