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Ocean City

Former council president on health care, artificial tax breaks

ZACK HOOPES ¦ Staff Writer

Joe Mitrecic Joe Mitrecic(Oct. 19, 2012) Although technically a non-incumbent, council candidate Joe Mitrecic has as much, if not more, political backstory than any of the city’s current elected officials. Mitrecic served on council from 2002 to 2010, the latter part of that time as council president, and was typically on the majority side of several crucial budget votes.

In 2010, however, Mitrecic lost his re-election bid by a narrow margin of just 41 votes to newcomer Brent Ashley, who’s arrival allowed the formation of a new majority that went on to make several controversial fiscal changes. Mitrecic’s re-emergence could, conceivably, undo the political reversal that has made for a prickly two years at City Hall.

¦ OCEAN CITY TODAY: Why did you get into politics, and why do you want to get back in? Have you been anticipating getting back in since you lost the election last time?

¦ JOE MITRECIC: No, not really. I originally had looked at it as, you know, that I had lost and my political career was over. I decided to jump back in this time not really – not happy – with the direction that things are going for the town right now. Some of the new direction just doesn’t make me happy. I don’t think that we are moving in the right direction. So the way to change it is to get back in and be part of the change.

¦ OCT: As far as the political landscape right now, you’re part of what is probably best described as an ersatz opposition bloc with Dennis, Mary, Doug, and the mayor. What is that relationship like? Do you consider yourself to be part of a group?

¦ MITRECIC: I am not part of a group. The others and I share some like sentiments, but we’re not running as a group or a bloc or a team. Certainly there are a lot of people in town who, for one reason or another, endorse all four of us. But for the most part, people look at the signs out and say, “Look at the four of them, their signs are all in the same places.” Well, maybe it’s the people who own the property where the signs are that endorse the four of us. But I’m running my own campaign.

¦ OCT: The big topic right now seems to be the union push, and everybody gets asked where they stand on it. Do you think it’s a good thing for the town if it goes through? n MITRECIC: No. I didn’t support the FOP when they put their bid in for the union. I did sign the petition for both the FOP and the general employees to get it put on the ballot, because I think it is something that the taxpayers and the Town of Ocean City and the voters should decide. However, I don’t support it. I don’t think that it’s necessary. I can see where they feel it’s necessary after the political climate of the last two years.

But overall, I don’t think it’s necessary. I think that they’ve been treated as fairly as the FOP and the firefighters union has been treated, up until recently. n OCT: Cost cutting measures – particularly the ones that involve employees and benefits – were kind of already a hot topic even when you were still in office. What of the cost-cutting measures that have been done since you’ve been gone have been good, and which would you have done differently? n MITRECIC: Well, the only cost cutting measures that have been done have actually been to balance the budget on the backs of the employees. Whether they’re current employees or future employees, that’s where the cost-cutting measures have been taken, with employee benefits, employee salaries, and so forth. We had no less than three different groups of people come in with studies as to what we could do with the employee health care, the employee pension plan, and so on and so forth. They all pretty much said the same thing, which is that in the long run this is going to cost money.

I believe the cost-cutting measures that were proposed by the current conservative majority are short-term savings and are going to be longterm costs. The one number that stands out is the pension plan, which in the year 2030 will cost the taxpayers almost a million dollars. Because we have to keep funding that as long as those people continue to live, and there’s nobody coming in behind it to help fund it, so the taxpayers are going to end up funding it on their own. It’s a very shortsighted decision. n OCT: Before you left in 2010, there was already a hiring freeze and some salary reductions.

Do you think those things do need to continue? n MITRECIC: It’s certainly something that you have to look at on a year-to year basis. You can’t make a decision, sitting in this office today, on what’s going to be able to be done in 2013, 2014, 2015. The general employees were told by management at the time, or even maybe by the council at the time, that once the FOP got their union, that they also would be looked after. There was a motion made – by council member Jim Hall – to fund the raises based on the Hendricks study, and seconded by council member Howard at the time, to fund the Hendricks study pay raises. So that’s where we got to the amount of money the employees were making at the time. They haven’t gotten a raise, they haven’t gotten a COLA. Everything else they ever got was based on the social security index, where everybody who received social security got that some COLA.

So they have a hiring freeze on, and I would say that is probably going to continue into the future because the town is changing the way it does business. It no longer does its own construction, it subs that out. It no longer does a lot of its own lawn mowing, it subs that out. If you look at it in my business, we’re more like a general contractor who oversees a number of subcontractors. That’s the way the town is going. That’s one of the decisions that was made back in 2007 and 2008 to start to reduce government, reduce payroll, reduce these pensions and healthcare for cost. n OCT: The fire company issue that Jim has brought up again. Do you want to state your case on what happened there? n MITRECIC: That was 2006. We’ve moved on. That’s the past; I’m looking at the future. My ideas are not what for happened in 2006; my ideas are for what’s going to happen in 2013, 2014, 2015 and 2016. That’s what I’m looking for. We keep going back and talking about the past, and it does nobody any good. When everything was said and done, it was a painful experience for both the fire company and the full-time firefighters, and the council and the mayor at the time. But we worked through it, we had a good discussion, and we came up with an excellent outcome. n OCT: One of the things that, when I look back and read what you said during the 2010 election season, one of the things you wanted to be a strong advocate for was a tax differential with the county. n MITRECIC: Absolutely. I think that we should fight for that every minute that you’re up there as a councilman, and the mayor, that’s something that needs to be worked towards all the time. We pay a tremendous amount of money to the county for services that we do not enjoy. n OCT: One of the things that always gets hit on is the motivation of employees towards the union. Have you spoken with employees, do you think there is some sort of problem in the ranks, as has been alleged? n MITRECIC: Ever since the FOP got a union, I think there has been grumblings in the background of the employees unionizing. I think that the issues with the changes in the pension plan and the changes in the salaries and the healthcare and all, precipitated that becoming a reality. Originally, when all those ordinances were thrown out there, I don’t believe that they discriminated between current employees and future employees. I think the words were just “employees.” Whether it was meant to be that way or not, I can’t say. And certainly with the firing of Dennis, who was a good people manager, there was some objection.

But also we need to go back to the fact that the current council majority decided that nobody could have a pay raise or be promoted without their approval. So we’re taking Ocean City back to a pre-City Manager type of government, where the City Council and the mayor do the hiring. If you wanted a job in public works, you went and talked to somebody on the council, and the next thing you know you have a job in public works. And I think that was another worry for the employees, that we’re going backwards, not forward as far as employee negotiations. I don’t think that this council, or any council that I served on, is equipped to know whether we need another backhoe operator or whether the backhoe operator should be making more money. Or the staffing levels that need to be done, I think that’s something that somebody who is there, who has their hands on it – like a city manager – is the one to make that decision. n OCT: I guess the elimination of the commissions is another part of that. Do you think that has been effective, with the institution of TAB for the tourism system? n MITRECIC: I think the elimination of the commissions was a major mistake. They talk about how it was done for clarity and for openness, but nothing was decided in any of those commissions that didn’t come back to council for a full council vote. You had three councilmen, or two councilmen and the mayor, or three councilmen and the mayor, on any of these commissions. And they could field the thoughts of the council for the group that they’re meeting with. TAB is a great organization, however, they come up with an idea, they go to the council, the council kind of beats it up, they go back to TAB, talk about it some more, it comes back to council, and it could be three months, it could be three weeks, it could be six months before there’s a decision made. It’s a lot of going back and forth that would not be necessary if we had two councilmen and the mayor, or three councilmen and the mayor, or just three councilmen on some of these. Especially TAB, because tourism is our business. If we’re not on the cutting edge of tourism, we’re falling behind everybody else. So if we have to spend weeks or months going back and forth on whatever topic, we’re losing time. We’re going backwards. n OCT: You’ve been given what I guess you could call the de-facto endorsement of the FOP, given that they’ve gone to great lengths to attack people who are clearly gunning against you. They don’t endorse you, but do you have a sense of why they prefer your side to the other? n MITRECIC: Again, I don’t think I have a side. That’s the first thing. The FOP has endorsed me every time I ran, except for the first time, because I didn’t support the FOP’s referendum for collective bargaining. But I think the FOP, the IAFF, the general employees, the people at city hall find me easy to talk to, somebody that they can approach and [who will] listen to their concerns. I don’t always agree with them, but I’ll tell them that. They know exactly where they stand with me at all times. I think that any of the employees feel that way – that they may not like what I have to say, but I’m telling them that from my heart and that it’s the truth. So I would imagine that, yes, I would get the FOP endorsement. Maybe I don’t, maybe I do.

OCT: If you are on council – because I know the FOP contract is coming up pretty soon – do you think that’s going to be a tough negotiation? n MITRECIC: I think the FOP has been outstanding with understanding the situation that the town is in [over] the last couple years. They could’ve pushed the issue, they could’ve made the town give them the raises that they had in their contract, but they didn’t, and I commend them for that. The IAFF also, both of them had raises and steps and COLAS built in that they could’ve forced the issue on. With that said, it wasn’t really the political climate to do so. But they decided not to. I’ve been through three negotiations, and I would go in with the same ideas and thoughts, whether they endorse me or not, that we’re there to protect the taxpayers of the Town of Ocean City. n OCT: It seems like, every time the FOP achieved a certain level of pay, everyone else wanted it. There is kind of an escalation pattern with the payroll. n MITRECIC: That’s not true. After the first FOP contract was done, we had a study done, as I mentioned earlier, by the Hendricks company. They compared the city employees’ wages with the same 10 groups that the FOP used to compare their wages with. And salaries were adjusted from there on. After that, the general employees’ pay raises were based on COLAs and steps. The FOP’s raises were based on what they negotiated. n OCT: But there was a point in 2006 where Hendricks suggested that our department heads were being paid 30 percent too little compared to equivalent officer ranks in the police department, and thus there were significant raises given. Do you think that that kind of escalation is something that the city still needs to be worried about? I guess that’s what I mean by escalation. n MITRECIC: Absolutely. But I don’t think that you’re seeing comparable salaries out there with the other municipalities that we did our comparison with, I don’t think you see them escalating. So I would imagine that the FOP contract would be fairly bare-bones, just based on the economic climate of today. I’m not going to try to scare the taxpayers by saying that there’s going to be some big-suited lawyer that comes down here and negotiates to cause them to have to move out of their house because their takes are going to go so high. The town has the ability, that if they feel that it’s an outrageous request, they can in fact fight it and take it to arbitration if necessary. As far as the IAFF and the general employees, should they win the right to have bargaining, it will not having binding interest arbitration. So basically if they say, “We want this” and we say “no,” there’s really nowhere to go. You just hope you can work it out at the table. n OCT: Anything else you want to cover? n MITRECIC: There’s a couple things I would like to add. One of them is that a couple of the people running want to label me as a big spender. The last year, they lowered the tax rate by a penny. It was an artificial lowering of the tax rate, because the money was just taken out of the fund balance. So, the last time it was lowered in a non-artificial way was in my last budget that I’d done. Every budget that I did for the eight years before that, the tax rate was lowered – through cuts, not through taking money out of the fund balance, not through robbing Peter to pay Paul, so to speak.

The other thing I’d like to point out is that some people paint me as this gruff, non-friendly type person. I took my job as City Council president very seriously. I took my job as a councilman seriously. I took my job as City Council president even more seriously. I ran a meeting the way that a meeting should be run, and it takes a tremendous amount of concentration to keep those meetings running the way they should be run according to Robert’s Rules, and to treat everyone with the same amount of respect and dignity at all time. Did I take it too seriously? Maybe. Did I come off as too serious? Maybe. But I was there to do a job, and I took it as seriously as I could. I don’t come off jovial, but it’s a time that we need seriousness back at that council. n OCT: One of the things that I hear from your erstwhile opponents is that the race is trying to be made into a personality issue, where the success of the city depends on a council that is just nicer people, or is less arrogant in some way, or any of these terms that are thrown around. Do you think that’s overplayed as well, that the personality issues of the other side, which have also been alleged, are that big of a deal? n MITRECIC: I hope it doesn’t come down to personalities. I would hope it comes down to the people who can get the job done and represent the taxpayers the best possible. If you ask anybody, other than probably the Halls at this point in time – or if you ask Jennie Knapp, if you went and just walked in Jennie Knapp’s office and asked, “Of all the councilmen who served, who knew the budget best,” she’s going to tell you it was me. I poured over the budget. I actually have the budget sitting on my desk right now from last year that I’m poring over. When I did the budget, there were questions asked. I’d ask, “Why are we buying boots for employees we don’t have anymore?” I was asking questions – “How come we’re buying all these rounds of ammunition for the police department? What’s left over from last year?” I was looking at each line item through whether it was cut at the city manager level, and when it came from the department head and was cut at that level, I wanted to know why it was cut at the city manager level. Why did we cut this out? Could we have done this and this instead of that? So that was my bailiwick. You have people like Mary Knight or Margaret; they’re more centered on the tourism aspect of it. Nancy Howard was another. When Rick was the City Council president, and even as mayor, his was zoning, he can quote zoning codes off the top of his head, things that I don’t do. I can tell you numbers from the budget – once I read it – all year, and I can tell you if we talk about something that we approved in the budget and we talk about it in August or September or October, I can tell you what that number was. Because I read it and know it and I live to do that budget. So that was my thing. Lloyd, he’s more in tune with the police department, things like that.

I think you just need the people who are going to move the town forward, need to be elected. The people who understand, who have actually worked on a municipal budget and understand it, can help you move that portion forward. Those are the type of things you have to look at, you have to look at moving the town forward. I put it in context with that, if you go to Best Buy and buy a computer, by the time you get home, it’s out of date. That’s where we are. There are people sitting outside the McDonald’s on their computer, using the McDonald’s WiFi, to find a hotel in town that they’re going to go to in five minutes. Technology has taken us so far; we have to stay up with all that. And being that tourism is our only business, we have to stay on the cutting edge of tourism, and we have to offer the people that come here cutting edge amenities. n OCT: Do you think the direction as far as how we’re marketing and who we’re marketing to is being done well? Because I know that the MGH contract renewal, for whatever reason, has become kind of a political issue. Do you think that the time that we’ve had under MGH has gone in the right direction? n MITRECIC: Look at the resorts around us. Look at national resorts – look at Disney, Atlantic City, look at their numbers over the last five years since the downturn. Atlantic City is down double digits, we’re up double digits. This whole “we’re not having any visitors come to Ocean City, the sky is falling, nobody’s moving” – it’s really starting to get old. Let me explain something about Demoflush. Demoflush is based on wastewater output. Close to 90 percent of the units in this town – probably even close to 100 percent – have new toilets, new faucets in their kitchen, new shower diverters, which are all now water-saving entities. So if we’re getting the same amount of wastewater out of all these water-saving entities, doesn’t that mean there are more people in town? n OCT: I guess the idea with Demoflush is that it’s not necessarily accurate, but it should be consistently inaccurate. n MITRECIC: It was designed in the ’70s, when toilets flushed five gallons of water, when showerheads would allow whatever amount of water could come through the pipe to come through. All of those things have been cut back. Haven’t we redone the fixtures in the town enough that, if you’re still getting the same amount of gallonage, but you’re using less in the toilets and the sinks and the showers, doesn’t that mean there’s more people? In 1982, we had 21,200 calls for service for the police department. Last year, we had 70,000. 2012 we have 70,000, and it’s not complete. So how can you not have more people, and have three times as many calls for service. As far as the census, in 1980 the census said there was 4,946 fulltime residents of the Town of Ocean City. In 2010, there were 7,012. Doesn’t that mean there are more people living here? n OCT: There’s definitely been [long-term] growth. But it has tapered off by a few hundred people since the downturn. n MITRECIC: The difference with that, also, is that you have a lot of people retiring here. You have a lot of people who came here on vacation, fell in love with Ocean City, and they retired here. And they retired here for the amenities that are offered to them. And retirees, unfortunately, pass away. So, are we not backfilling with the same amount of people who are moving out or passing away? Maybe. But it’s not thousands, it may be hundreds, or it may be 50. It’s hard to say, I guess the census numbers will be done again in 2014.

You have to go and base things on numbers and not just the Demoflush. Room tax was up, food tax was up or this year. And they’ll say, “Well, people are charging more for rooms, or they’re charging more for food.” Go to the hoteliers and ask them what they’re charging for their room as opposed to last year or the year before. I would venture to say that most of them are staying flat.

As far as the demographics, when you put a marketing plan out there – and the advertisers know far better than I do who it targets – I think that if somebody sees an ad for Ocean City, they either like what they see, or they don’t. It doesn’t matter if they make $30,000 a year or $100,000 a year. n OCT: One of the other numbers thrown around there for the “doom and gloom” argument is that condo sales have been really slow. Do you think that makes a difference? Is the sale of real property here an issue? n MITRECIC: The sale of real property all across the country is bad. I’m a builder and haven’t built a new home in seven years. We’ve done a lot of renovations and we’ve luckily stayed very busy, but we haven’t built a new home. Now there are new ones going up, but it’s not like it was seven years ago, there’s not condos going up like there were seven years ago. I think, or I hope, more than I know, that things have leveled off and we’ll start to come around. I hope it doesn’t go any lower than it does. But we had a boom, where everybody was going to change their property into condos and sell it and make money. And some did, and some got caught. It wasn’t going to last forever, and you’re foolish if you though it was. n OCT: Back during that heyday, when the revenue was more consistent, do you think the city could’ve done more to stash away for a rainy day? Do you think we’re doing okay now as far as sustainability? n MITRECIC: When the revenue started to climb, we had many infrastructure projects that had to be addressed at that time. Due to the fact that the council has always been mindful of the tax rate and the taxpayers, we had to look at a lot of these changes and upgrades that had to be made because they had been put off for previous budgets. So we had to address a lot of them. And they’ll have to still be addressed. It’s a balance that’s going to have to be made. I would say we have two more years in this assessment, and then there’s another three years after that, I wouldn’t look for the assessments to climb significantly. So we’re looking at a five-year cycle. The residents of the Town of Ocean City need somebody there who can understand the budget and what needs to be done, and can make the necessary cuts to make that budget balanced in the coming years.

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