OCEAN CITY – Although the state is struggling with transportation funding, sparking plans of a gas tax increase, the town is following the advice that it doesn’t hurt to ask and approved the application to apply for grants following a public hearing this week.

At Monday’s meeting, a public hearing was held in regard to the Fiscal Year 2014 Annual Transportation Grants. Each year the Ocean City Transportation Department requests funding for transit services through the Maryland Transit Administration (MTA) as a Section 5311 rural provider. This application is the mechanism that results in both operating and capital grants.

Public Works Director Hal Adkins presented the FY14 transportation plan, starting with the overall operating budget coming to about $5.5 million. The general fund contribution comes to about $1.85 million. However, the town’s contribution is a little over $77,000 less than the year before.

The overall operating budget is supported by a number of revenue sources, including $2.4 million from bus fare boxes, $210,000 from bus and tram advertising, over $8,000 in senior bus passes, over $172,000 from bus coupon book sales, almost $22,000 in service charges from working in Greyhound, and over $13,000 in service charges from Medtrn, the senior handicap service.

In addition to revenue, the transportation department is supported by over $684,000 in federal grants, over $31,000 in state grants, and $110,000 from an ADA grant.

“The combined amount of the $684,000 [federal grant] and $31,000 from the state has been a static number for the past eight years and the funding for our ADA grant of $110,000 has been a static number for the last 13 years,” Adkins said.

Adkins furthered, one of the indicators used when studying the performance of a transit system is known as fare box recovery ratio, which is the comparison of revenue stream versus operating cost for a specific fixed route.

“When you look at the State of Maryland as a whole, and you look at the systems relative to ridership, we come in fourth,” Adkins said. “The MTA in Baltimore has the highest ridership followed by Montgomery County, followed by PG [Prince George’s] County, followed by Ocean City.”

However, when reviewing the fare box recovery ratio from a performance standards required by the state, it is considered successful to have a fare box recovery ration exceeding 25 percent. The MTA in Baltimore has a fare box recovery ratio of 36 percent, Montgomery County of 20 percent, Prince George’s County of 10 percent and Ocean City of 45 percent.

“That shows you where we compare to these other agencies regardless of what your current general fund subsidy is of $1.85 million,” Adkins said.

Next, Adkins presented the typical capital funding is based on 80 percent federal, 10 percent state and a 10 percent local match.

“Each year we put together a list of items that are requested to the state for consideration,” he explained.

First was a request of 29, 40-foot transit buses at a total cost of over $14 million and a local match of about $1.3 million. Adkins said the department has already received word the reality is the city will receive six buses instead, resulting in a local match of about $272,000.

Adkins explained federal criteria titled “useful life criteria” in determining the replacement of buses is 12 years or exceeding 500,000 miles. In reviewing the fleet, out of Ocean City’s 62 transit pieces there are 29 that meet or exceed that criteria.

Other projects include the renovation of the North End Transit Center that was built in 2006, preventative maintenance on rolling stock, renovation of the Park & Ride Transit Center built in 2001, and preventative maintenance contract for money room equipment, preventative maintenance contract for the bus barn overhead doors, and the purchase passenger shelters and parts.

The total cost of those initiatives is $13.9 million which would normally be a 90/10 split that results in a total cost of $12.5 million.

The anticipated funding is $3.45 million and a 90/10 split results in a total cost of $3.1 million with a local match of $345,000 which is factored into the overall FY14 budget that has been submitted and has a reduction of over $77,000 from the previous year.

“Just from my observation transportation is a loss that we have pay,” Ocean City resident Joe Cryer said. “I don’t know how we are going to pay for it but just to make affordable transportation on the island  I don’t see where we can run a profit.”

Resident John Adkins made a couple of suggestions, one was to begin using synthetic oil and bypass oil filters in the transit buses to save money in the long run. He has used the system on his trucks since 1979 without any problems and knows of it being used in commercial trucks that don’t have to have their oil changed until every 50,000 to 60,000 miles.

“If we could put a small sign that passengers could read to know that we pay almost $2 million to operate this system [buses] out of our general fund that local taxpayers subsidize, that would be something maybe the people would try to understand what it takes to operate this because even though they are only paying $3 or $1,” he said.

Once the public hearing was closed, Councilman Dennis Dare pointed out the transit system is being funded by less than 50 percent from fare box revenue, 15 percent from federal and state grants and 33 percent by taxpayers.

“I am seriously concerned about the $1.85 million from the town,” he said.

Dare added that he has followed the predicament the state and transportation funding is a stated priority of legislators.

He asked the mayor to keep in mind as he is in contact with the state during the grant process to look for an opportunity to address Ocean City being classified as a Section 5311 rural provider.

“Through this process, there may be an opportunity for the state to finally consider Ocean City as an urban provider, and act accordingly,” he said.

Adkins replied becoming reclassified would become a state and federal issue as Section 5311 is a federal definition from the determined Census population.

“If your Census population is less than 50,000, you fall into that box,” he said. “It doesn’t mean you can’t change the box.”

A few agenda items later the Mayor and City Council came across a resolution to authorize City Manager David Recor to file an application with MTA for grants under the Federal Transit Act.

“This resolution is in support of the public hearing that was just held by Mr. Adkins,” City Solicitor Guy Ayres said in introducing the resolution. “A speaker asked why we are we doing this if the MTA doesn’t have any grant money. Well, we don’t know if they have any grant money or not … but if you don’t ask for it you’re not going to get it, and just because you ask for it doesn’t mean you are going to get it.”

The council voted 6-0, with Councilwoman Margaret Pillas absent, to approve the transportation funding plan.