The Town of Ocean View held a public hearing and workshop earlier this week to discuss its proposed 2017-fiscal-year operating and capital budgets.
Town Manager Dianne Vogel said that, since the council had last met, the draft budget had been updated per direction from council.
“As we’ve said in two other meetings … [personnel and benefits] represents about 70 percent of the operating budget.”
In Draft 2, a pool of 2 percent of total salaries —approximately $12,000 — for compensation remains in the budget.
Vogel said the Town did receive confirmation that there will be no increase for life insurance and short-term disability premiums for the upcoming renewal period.
“Presently, the Town pays 100 percent of these premiums. Based on the current census, this represents about $610 per month.”
The Town’s dental coverage will increase by 2.7 percent, or $27 per month, effective May 1. The Town currently pays 100 percent of dental premiums.
Vogel said the Town has heard from the State of Delaware that medical coverage will increase in cost by 8 percent across all six plans, effective July 1.
“Presently, the Town pays 100 percent of the premiums for the First State Basic Highmark Plan. The financial impact of the increase is approximately $20,000 per year, based on the current census of the employees that participate.
“Employees who select another plan over the basic receive a credit against their premium, and they pay the difference on a biweekly basis through payroll deductions.”
The Town also received preliminary rates from the State for the employer contributions to the pension plans that will change effective July 1.
“The preliminary rates for the municipal police is going to be $13.77 of base payroll and 6.76 percent for municipal general employees.
“These rates are subject to change, but from Lee [Brubaker’s] experience, generally the rates that are released the first time are the rates that are accepted.”
She noted that two speed monitors were requested by the Town’s police department, at a cost of $7,000. Vogel said that, in looking at the current year’s budget, the cost for two monitors was $6,000.
“At the last meeting, [state] Rep. Ron Gray was present and called me after the meeting and has offered to share the cost of one of those speed monitors with [state] Sen. [Gerald] Hocker. So they have committed to pay for at least one.”
Town Finance Director Lee Brubaker reminded the council to remember what they’re working on.
“Remember, this is a budget. It’s an itemized projection or estimate of revenues and expenditures for a set period of time,” he said. “We happen to project out five years. I find it hard enough to predict what’s going to happen tomorrow or next week, let alone five years, but it gives us an early warning system.
“As council members, you have to remember, we’re talking about five years, but we only adopt one year at a time.”
Although there was a 2 percent property tax increase last year, Brubaker said that, with changes to the draft budget for the 2017 budget, it does not appear that the Town needs to increase taxes.
Brubaker noted that the Town receives $700,000 per year, on average, in transfer tax revenue from the State.
“Last year, in their budget deliberations, the State talked about taking that money away from the towns and from the county,” he said. “At the very last minute, they gave up on that idea, but they thought about it once. So they can think about it again.”
Brubaker said the Town’s drainage projects’ costs were recently updated, based on updated numbers provided by the Town engineer.
“Last year’s budget, these drainage projects were projected at $1,180,000,” he said, noting the cost has now increased to $2,023,000.
Brubaker said the updated figures came from estimated contractor, easement, legal and advertising costs, based on the Town’s recently completed Avon Park drainage project.
“Drainage is a major issue,” he noted.
The drainage projects for Woodland Park Phase II, and Woodland Avenue Phase II and III, have not been, nor have they ever been, provided for in the Town’s budget.
“There’s now still $1.288 million that are still not yet provided for in this budget.”
Mayor Walter Curran said it appeared that the Town seems to have the ability to increase its allocation to the Street Repair & Replacement Trust Fund. Currently, the Town increases its yearly allotment by $25,000. Curran suggested that be increased to $75,000.
Brubaker said he can run the numbers in varying increments to show how an increase would affect the budget and the trust fund.
Council Members Bill Olsen and Carol Bodine said they liked Curran’s idea of increasing the allotment.
Although citizens were in attendance at the meetings, no one opted to make comment.
Vogel said the budget ordinance would be introduced at the Town’s March 14 meeting.
The Town must adopt the budget no later than April 30. Copies of the draft are available by visiting the Wallace A. Melson Municipal Building or online, at www.oceanviewde.com.