Ocean City Plans To Eliminate Jobs And Reorganize Town Government

Posted on January 26, 2010

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Ocean City will offer 84 town employees incentives to retire this year in a continuing effort to downsize the town’s work force and cut the budget.city hall

At budget time last year, Ocean City used many one-time savings measures and a hiring freeze to keep spending in line with falling real estate tax revenues. In addition, town workers received no salary increases or cost-of-living increases.

The town needs to make permanent savings in the next budget year, City Manager Dennis Dare told the Mayor and Council on Tuesday. Dare said he does not expect a quick recovery of real estate values, and the town relies on property taxes for half of its revenue. Following the nationwide housing downturn and a sharp decline in local property assessments, town revenues fell by $5 million last year. Property assessments could fall still further at the next reassessment in two years, he said.

“We need to institute things that will allow us to reorganize and streamline” town government, Dare said.

The Town Council unanimously approved Dare’s recommendation for the voluntary retirement program for eligible long-time workers. Dare stressed several times that the incentive is a one-time offer that will not be repeated.

Public safety workers with 25 years of service are eligible to retire, but the town wants them to  postpone retirement until after the 2010 summer season.

General town government employees are eligible to retire after 30 years of service and age 55. The general government employees will have until March 31 to make a decision to take advantage of the incentive, and must retire by April 30. Town employees over age 65 but with less than 30 years service will be eligible to retire with prorated benefits.

The retirement incentive is six months salary, plus accrued vacation and holiday pay.

Dare said he expects Ocean City to save $1 million in salaries in the first year, after paying the incentives. The permanent savings are estimated at $2 million every additional year going forward. If the incentive program does not result in sufficient retirements, the Town Council will face very serious decisions in 2011, Dare warned.

The retirements mean Ocean City will lose many experienced employees and much institutional memory, the city manager noted. On the other hand, promotions will be opened up for some other workers. Dare said that other than promotions, he will recommend no salary or cost-of-living increases for the second year in a row.

The town may need to replace some of the retiring workers, but will be able to hire replacements at much lower salaries. The town might also hire some additional seasonal employees, rather than year-round employees, and fill some jobs with contract workers, Dare said.

Ocean City currently has 54 vacant positions because of the hiring freeze, Dare said, which is a 9 percent reduction in the work force. “Ninety-one percent of the work force is doing 100 percent of the work,” he said.

The vacant positions and the anticipated retirements will “give us the opportunity to reorganize what we provide and how we provide it,” the city manager said.

Ocean City had about 612 year-round employees at its peak, and also hires about 1,000 seasonal employees each summer. If all of the 84 eligible employees accepted the retirement offer, which is not likely, the town’s year-round work force would be reduced to about 475. — John Hayden

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