At the Town Council meeting on Tuesday, March 13, the Town Council of Ocean View agreed that for the next round of budget preparation, the draft model should show a raise to property taxes of 100 percent. The final determination on the actual percentage of increase to be used will be done at the town budget workshop meeting on March 27. A final vote on approval of the budget will be taken at the town council meeting on April 10.
This is a drastic step, but one compelled by the necessity to properly fund major capital projects — mainly drainage issues.
For many years — well over a decade — Ocean View, like many other coastal towns, has been relying on transfer taxes to supplement their operating budget. They did this for a number of reasons:
• The entire area was in a growth spurt and transfer taxes — the tax paid when a property is sold — was a continuing stream of cash.
• The capital projects (drainage, street and sidewalk repairs, etc.), were evident but not critical and could be postponed.
• Prior councils were reluctant to initiate tax increases due to political fallout.
The problem with this is transfer taxes were designed to be used for capital projects, whether new or replacement, not to supplement the operating budget. Furthermore, once the two main housing developments (Beach Club and Silver Woods) are completed, there is essentially no more land to develop in the town.
Since resales are approximately one-half of the total sales, then the revenue from transfer tax will effectively be cut in half. Compounding the problem is the fact that transfer taxes are passed through the State and they can, in any given year, cut the amount allocated to cities and towns.
Having said that, this town council has been prudent in its operating budget spending, recognizing that the safety and welfare of our citizens is of primary importance.
Four years ago, the town council agreed to start weaning the Town off transfer taxes, and a certain amount was set aside each year to increase the capital funds that would be required to do the necessary work.
Because many of the drainage projects have not been started, much less completed, the ancillary damages of erosion and wear and tear of surrounding areas and streets has increased causing potential safety issues. Now we are forced to try to complete the projects as fast as possible in order to minimize the safety issues and reduce costs.
Much of the delay, but by no means all of it, was the reluctance and sometimes outright refusal of the adjacent homeowners to give the Town the necessary easements required for the Town to do the work. Many of these same people were the first to complain to the Town when heavy rains inundated their properties. Now, the Town is pushing ahead, and those projects that fulfill the requirements of easements first will be the first ones in line for the improvements.
In order for the taxpayers to have a perspective on the potential increase, shown below is a chart depicting what the annual/monthly increase would be for varying percentage increases based on Town of Ocean View 2018-fiscal-year assessed values and tax rate.
Please understand that the Town has no choice but to stop using transfer taxes to supplement the operating budget. By doing so, if we don’t raise property taxes now, the Town will run out of money before the end of the 2019 fiscal year.
This was a difficult decision for the town council members, but it is the responsible decision, giving what the Town is faced with in terms of capital projects. It is now incumbent on the town council members to ensure the projects move along expeditiously and efficiently.