OCEAN CITY — Ocean City officials this week passed an ordinance limiting the areas of operation for vehicle vendors, such as ice cream trucks, in the interest of protecting established downtown businesses.

On Tuesday, the Mayor and Council approved an amendment to an ordinance limiting the operation of vehicle vendors like ice cream trucks, for example, in the downtown area. The existing ordinance prohibited the operation of the ice cream truck franchisee to south of 18th Street, but the council on Tuesday voted to extend the prohibited area to south of 27th Street, or the north end of the Boardwalk.

Before approving the amendment, however, some on the council voiced concern the extended prohibition area was too vast, pointing out there are significant residential areas in the downtown area that could be better served by a vehicle vendor away from the Boardwalk and other retail areas. As a result, the council voted to amend the prohibited area to south of 27th Street and east of Baltimore Ave., essentially insulating Boardwalk businesses that sell similar goods from undue competition while allowing ice cream trucks to operate in residential areas away from the retail core. City Solicitor Guy Ayres explained the original intent of the ordinance.

“The intent of the ordinance was to protect the Boardwalk businesses,” he said. “Maybe this should be amended to exclude the areas west of Baltimore Avenue.”

Councilman Dennis Dare said the amended ordinance as written would exclude vast residential areas downtown that could be best served by a vehicle vendor.

“I understand the need to protect the Boardwalk businesses and businesses on the beach, but we have businesses all over town,” he said. “This would take in big residential areas such as Robin Drive and Bayshore Drive, Mallard Island and all of the residential areas in the south end of town.”

With that said, Dare made a motion to amend the ordinance to exclude any area south of 27th Street and east of Baltimore Ave. The council approved the amended ordinance by a vote of 4-1 with Councilwomen Mary Knight and Margaret Pillas absent and Councilman Brent Ashley opposed.

“I’d be in favor of doing away with these franchises entirely,” said Ashley. “We need to protect the businesses we have.”

Mayor Rich Meehan said the issue came up as a result of the current holder forfeiting his franchise agreement. Patrick McLaughlin, who operated a fleet of ice cream trucks in Ocean City under the name Arctic Inventions, along with other concession businesses in the resort including telescope pictures and beach stands, pleaded guilty last year to federal tax evasion charges and has since forfeited the vehicle vending franchise agreement with the resort.

In October, McLaughlin was sentenced to 10 months in prison for failing to file individual income tax returns and failing to report employment tax withholdings for his Ocean City-based concession businesses over the six-year period from 2003 to 2009. As a result of McLaughlin’s failure to pay corporate, individual and employment taxes, the total tax loss to the government came in at just under $300,000.

“The reason this came back up is that the party that held the franchise has forfeited and we’re in the process of rebidding it,” said Meehan on Tuesday. “Since the previous owner forfeited, we need to consider a debarment hearing to prevent him from bidding again in the future. Otherwise, we could have another problem.”