OCEAN CITY – In its first appearance in Council Chambers since Hurricane Sandy destroyed the first floor of City Hall, City Council on Thursday night acted on its biggest business of 2014, adopting a $70 million municipal budget.

The budget, which carries a more than 2.5 percent increase, will raise $44.8 million from taxpayers. The owner of a home assessed at $500,000 will pay $73 more in taxes than last year. Currently, the owner of such a home in Ocean City pays $4,210 in property taxes.

Although the budget decreased from $71.9 million last year, the increase in taxes was necessitated by the shortfall created by the loss of $135 million in tax ratables. That downward spiral appears to be at its end as the city’s compliance plan to bring properties to market value reduced tax appeals from 800 in each of the previous two years to 55 appeals this year.

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The budget passed 5-2, with Councilmen Scott Ping and Pete Guinosso dissenting. In voting no on the final budget of his two terms on council, Ping cited an eight-year struggle with the administration to consider cost-cutting moves in regard to the city’s fire department. Guinosso cited his disapproval of the way certain city properties, such as the municipal airport and the fitness center, are allowed to continue to operate at a loss as the reason for his dissenting vote.

Chief Financial Officer Frank Donato said Friday morning that the budget that was introduced last month remained mostly intact as adopted, with the major exception of an additional $86,000 being moved from the city’s $5.8 million fund balance to capital improvements.

Councilman Keith Hartzell originally proposed moving $250,000 to fund road repairs until Donato explained that any amount in excess of 10 percent of the $880,000 capital reserve, or $88,000, would require the city to re-advertise the budget and bring it back for a vote in two weeks.

Council voted 4-3 in favor of moving $86,000 to capital improvements. Councilmen Tony Wilson, Antwan McClellan and Michael Allegretto were opposed.

The budget raises the municipal tax rate 1.46 cents, to 40 cents per $100 assessed value.

Taxpayers here will also see an increase in the school budget that will mean an extra $14.51 in school taxes to the average homeowner, plus debt service of $3.38.

Before the final tax rate is struck in June, Ocean City taxpayers are already facing close to $100 in higher taxes this year.

Thursday was the first time in 18 months that council conducted business in Council Chambers on the third floor of City Hall. When Sandy destroyed the first floor of the historic building, the tax assessor’s office took over Council Chambers and the City Clerk’s office was displaced to an office next to the Sixth Street firehouse. With extensive repairs finished and the first floor of City Hall reopened for business, Council Chambers is again available for its intended purpose.

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