Ocean City Revenue and Expenditure Report. DEC. 2019.

OCEAN CITY FAIRNESS IN TAXES. (updated December 20, 2019)

1.00 — Klause Property Acquisition

1.10 — A “slow motion” demolition is taking place at the site as the existing car dealership building in being torn down. Structure/building down and removed, now working on concrete floor.

1.20 — Klause Enterprises obtained final approval from the Planning Board in October, 2019 for the development on 21 single family homes.

1.30 – At the August 22, 2019 meeting, city council approved an ordinance that stated that the city would acquire all property (Klause and Palmer properties) in the 1600 block of Have/Simpson Avenues through purchase or condemnation. It appears that the city is no longer interested in the property on the north side of 16th Street between Palmer Park and 16th Street since that parcel of land did not appear in the ordinance.

1.40 — Inquired at the November 26, 2019 city council meeting regarding the status of the property acquisition. No response from administration.

1.50 — As a result of no response from administration, prepared OPRA request in order to secure documents which will assist in determining status of the property acquisition. Received response and city has issued 14 day letter to Klause Enterprise on October 4, 2019, which indicates the city is moving ahead (slowly moving ahead) to condemn the property.

2.00 — City Lobbyist (Tonio Burgos and Associates)

2.10 — Starting in December 2016, the city entered into a professional service contract for lobbying services for the city’s back bay dredging effort. Since that time, city has paid $235,000 to the lobbyist.

2.20 — Federal and state laws require lobbyist to disclose activity on behalf of their clients. Based on these reports, the following work was performed by the lobbyist:

2.21 — FEDERAL GOVERNMENT — there was no lobbying work performed by the lobbyist on behalf of the city at the federal level. The lobbyist is not even registered with the federal government to perform lobbying work for Ocean City at the federal level.

2.22 — STATE GOVERNMENT — between the first quarter of 2016 and the third quarter of 2017, there were ten (10) meetings between the lobbyist and state officials. Out of the ten (10) meetings, six (6) were dredging related, two (2) involved the MS bike a thon, one (1) was about the 9th street bridge and one (1) was about a shared service agreement between Ocean City and Sea Isle City. Even after five (5) OPRA request, the City provided NO documentation produced as a result of work by the lobbyist and the state provided very little documentation on the work of the lobbyist. Also, the lobbyist was used to set up a meeting between state and city officials in July 2019.

2.30 – Professional service contracts must be renewed on an annual basis. The current contact will expire this month so will see if the city renews the contract knowing the lack of work performed by the lobbyist. Probably will be placed on “holiday” city council agenda.

2.40 — As a point of reference, the city auditor and budget advisor, Ford, Scott and Associates, makes on average $45,000 per year. They perform the annual audit, assist with the financial and debt statements along with providing budget and financial advice. In other words, considerable valuable work is accomplished in order to earn this $45,000, whereas, the lobbyist earns $60,000 for little or no work.

3.00 — Elimination of Supervising Engineer Position

3.10 — In the midst of a historic capital improvement program, the city elected to eliminate the civil service position of Supervising Engineer. The position was officially eliminated in October, 2018.

3.20 — The rationale that the city furnished the state that the Supervising Engineer performed duties that were redundant and that other municipal employees could handle the work that the Supervising Engineer performed. This rationale was misleading and suspect, especially in light that it was the second time they have attempted to terminate the individual in this position. The city’s first attempt failed.

3.30 — Upon termination of the position, instead of assigning work to other municipal employees, the city out sourced much the work of the Supervising Engineer, contrary to rationale the city provided to the state.

3.40 — The total position value of the Supervising Engineer at the time of termination was approximately $145,000. Cost of outsourcing of the position for the twelve (12) after termination was approximately $275,000, not including the one-time termination payment of roughly $125,000.

3.50 – The city has suffered operationally from the elimination of the position as paving and drainage projects are being delayed. At the 2019 capital budget presentation the Mayor admitted the paving and drainage projects are behind schedule.

3.60 – After thirteen (13) months, the city has recently advertise for the position of Senior Engineering Aide for the Engineering and Construction office. Clearly, the elimination of the Supervising Engineer position was an unwise move, from both a financial and operational perspective.

4.00 — Grant Management

4.10 — It appears that the city and the Housing Authority have lost grant opportunities as a result of mismanagement and/or lack of compliance with grant programs.

4.20 – New Jersey Department of Transportation Municipal Aid Grants

4.21 – These are annual grants administered by the NJDOT for paving projects. Appears that the city lost or had reduced grants that were award the city due to lack of timely project completion and/or compliance with grant requirements.

4.22 – While losing grants already awarded, the city has on one (1) occasion applied for a grant that the city was not eligible for, wasting valuable resources.

4.30 – New Jersey Housing and Mortgage Financing Agency

4.31 – The housing authority was awarded a $7.2 million dollar grant in 2014. In 2016, they gave the grant back for a reduced grant of $4.4 million. Including soft cost, the current Bayview Manor cost $7.3 million. If there was vision at the authority, they would have been able to retain the $7.2 million dollar grant and the cost of the Bayview Manor project to taxpayers would have been eliminated as any shortage could have been taken out of the affordable housing trust fund. Please note that the grant was awarded at the beginning of 2014 and at the end of 2019, do not have a shovel in the ground yet.

4.32 – The housing authority withdrew a grant application from a state funding cycle that the authority would have been an extremely competitive grant applicant. Out of the 14 applications submitted, 12 were successful with receiving a grant award.

5.00 – ACT Engineers

5.10 — The city hired ACT Engineers in July 2015 through a noncompetitive process to perform engineering work for the city’s back bay dredging program. Within the past year, ACT Engineers is also engaged with flood mitigation work.

5.20 — To date, ACT Engineers has been awarded contracts of approximately 5.8 million dollars. All contracts awards have been by the non-fair and open process.

5.30 — As a result of several OPRA request, reviewing several thousands of pages of ACT Engineer invoices. While the review is not complete, starting to document unique billing practices. Will report the findings once the comprehensive review is completed.

5.40 — One item regarding ACT Engineers is the development of a “Long Term Dredging Master Plan.” In July, 2016 the city entered into a professional service contract for an amount not to exceed $100,000 for the development a master plan for dredging the bay. Despite 3.5 years, over $95,000 in payments and over 600 hours of work, there is no master plan as it still needs to be finalized according to a response from an OPRA request. Also, appears to be not the only report paid for but not finalized.

5.50 – Besides dredging and flood mitigation work, ACT Engineers is now assisting with grant management, specifically writing grants, despite the city employing a capable individual charged with similar duties. ACT Engineers charges upwards of $192.00 per hour (equivalent to making $400,000 per year) to perform this administrative grant work. For point of reference, the city attorney only makes $185.00 per hour for municipal legal work.

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