Proposes $150 million in capital project debt atop existing $200 million debt
OCEAN CITY — “We really see a light at the end of the tunnel.”
That’s how Ocean City Finance Director Frank Donato described the new five-year capital plan for Ocean City that envisions spending $159 million with about $150 million in new debt atop $200 million in current debt.
During Mayor Jay Gilian’s administration, the city has undergone extensive capital improvement projects touching beach to bay and from the north to south tip of the island.
The work for 2024 includes a $30 million public safety building, a project that has been in the works for years and gone through various iterations and locations, but should get started by the end of the year at the current site of the police station and court on Central Avenue between Eighth and Ninth streets.
After going through a list of projects that have been completed in the past year and discussing the more than $200 million in debt the city had as of the end of 2023 — from projects that have taken place between then and 2012 — Donato summed everything up by saying after this new five-year plan, capital projects could normalize.
“Doing all these projects, catching up on infrastructure that is aging and was ignored for a lot of years, catching up on major building projects, building a brand new police station, addressing all of our fields, you see the big-ticket items that are in here for 2025, ’26, ’27, that are on the radar,” Donato said. “I don’t really foresee a lot that would need to be accomplished after this plan. We really see a light at the end of the tunnel.”
After that, he said capital projects will be in more of a “maintenance mode.”
“All the major projects that we can think of are accounted for in here,” he added.
Donato, with Vince Bekier, director of operations and engineering, presented the capital plan at Ocean City Council’s Thursday morning meeting after Donato’s 2024 budget presentation.
He said at the end of 2023, Ocean City had $134 million in permanent or bonded debt covering completed projects done from 2012-20 and $70 million in temporary notes or unfunded debt for projects completed in 2021-23 or “still in the works.”
“So we do have over $200 million in debt,” he said, with the new projects representing that $150 million more, grants notwithstanding. They showed a slide listing some grants awarded to the city amounting to more than $13.5 million, including $4.8 million for boardwalk work, $3.5 million from FEMA for home elevation and $3.7 million from the American Rescue Plan.
The big project for 2024 is the public safety building, which will include an addition on the south side, a complete renovation of the building and vacating the first floor, Bekier said. “We hope to start by the end of the year.”
Donato noted the $30 million was a little bigger than the cost presented earlier, but includes other aspects such as moving and temporary accommodations for the police department.
The city also plans to spend $6.5 million for a police substation at Eighth Street and boardwalk. “We hope to get shovels in ground by July,” Bekier said.
There are two roadwork and flood mitigation projects on West Avenue from Ninth Street to 18th Street and 18th to 26th covering the area to the bay.
The city is planning $2 million for lagoon dredging.
A $4.8 million Division of Disaster Recovery and Mitigation Boardwalk Preservation Grant will help replace the boardwalk from St. James to Fifth Street with a city contribution of about $5 million. If approved, it could include widening that portion of the boardwalk.
The Housing Authority work on the Peck’s Beach section involved $9.37 million for new family units on Fourth Street.
Donato said there is $20 million in the budget for the eminent domain acquisition of the Klause properties and another $7.2 million for adjacent Flood properties at 109 16th St. and 1600 Haven Ave. (Legal action is taking place that can affect those costs. There also is $2.4 million in escrow for remediation work to be done at the site.)
The capital plan also includes $100,000 for design work for the “envelope” of the Music Pier, which they described as making the location water-tight. The actual work on the Music Pier is expected to cost about $2.5 million.
A $1.3 million library project is also “on the radar” for this year.
Under public facilities and recreation items, there is $25,000 for a scoreboard for Carey Stadium, $20,000 for a scoreboard at the Tennessee Avenue sports complex, $300,000 for property improvements, $100,000 for fencing and $150,000 for landscaping citywide and $25,000 for irrigation. Other items include $30,000 for playground equipment, $15,000 for bleachers and $11,000 for storage for recreational facilities.
Looking to the following four years, projects forecast for 2025-28 include flood mitigation in the Ocean City Homes area and from 36th to 52nd streets, two major areas the city has not addressed, according to Bekier.
There is $3 million to empty dredge site 83, which is almost at capacity, according to Donato, making way for future dredge materials.
Building projects budgeted include $3 million for airport facilities, augmented by “a $3 million generous donation in hand from Mr. Leon Grisbaum,” Donato noted. However, the rendering presented of a new airport building was for a $9 million to $10 million project. He said the city was not successful in getting a $3 million FAA grant in the past few months but may be able to apply again in fall.
“We’re trying to figure out a path forward on this. It’s still firmly on the radar to move forward,” he said.
Ocean City plans to pitch a plan for a new building to replace the county-owned Bayside Center.
“The building now is useless for our purposes,” Donato said. “It was going to take a ton of money to get it compliant with the fire code.”
The capital plan includes $8.5 million for fire station No. 3 and renovations for the headquarters; $1.6 million for the public works vehicle maintenance building and another $1.6 million for vehicle storage at Shelter Road and a lumber rack.
Also planned is $325,000 for the Carey Stadium entryway and playground and $350,000 for city wide LED and general building expenses. There is another $85,000 for renovation to the Knight building and $70,000 for beach patrol headquarters renovation and sheds.
The plan includes $2 million for improvements and bleacher rehab at Carey Stadium “with an eye on making them more ADA-compliant”; $6.5 million for renovation to Grimes Field, which would include elevating the fields to keep them drier and for work on the concession stand and bathrooms; $4.7 million for tennis and pickeball at 34th and West/Asbury; $1 million for expanding pickleball at 18th Street, $1 million for redesigning and reconfiguring the golf course layout, $500,000 for downtown streetscaping and lighting; $100,000 for a bathroom at the Tennessee Avenue sports complex and $30,000 for playground equipment.
Over the next five years, Donato said, as the city continues to pay down existing debt, overall debt service is being limited so it amounts to an impact of a penny a year on the tax rate.
– By DAVID NAHAN/Sentinel staff
