Fenwick adopts $1.8M budget for 2016, no tax increase

The Fenwick Island Town Council approved the Town’s fee schedule and financial plan for the 2016 fiscal year at a July 24 council meeting, including a $1.8 million operating budget, $262,000 in capital improvements and new funding for maintenance of town parks — all with no property tax increase.

Town Manager Merritt Burke noted some increases in fees, with a business license to cost $185, up $10; late-payment fees up from $25, to $100; the special-event deposit increasing to $250; bonfire permits up $25, to $75; and the cost of an additional parking tag increasing to $75, from $50.

Councilman Bill Weistling said he thought that last fee should go still higher, and he further recommended the council consider reducing availability to just one additional tag.

“People want to buy them,” he said, so the fees must not be excessive. “I hope most of them are being used by [townsfolk], but I expect some of them are being passed around to friends and family outside the town.”

The property tax rate remains at $1.92 per $100 of assessed value, and there were no changes to other parking fees, while the building permit fee is 3 percent of construction costs for the project. All other fees remained the same, Burke said.

The council approved the schedule of fees unanimously, 7-0.

Burke reviewed the 2016-fiscal-year financial plan starting with a set of service goals set by town officials, including year-round 24/hour police coverage; updates to the Town website and social media; solid waste, recycling, yard waste and bulk trash collected throughout the year; maintaining Community Rating System (CRS) discounts for insurance; and maintenance and improvements of the Town’s streets, drainage, rights-of-way, buildings and grounds.

With a goal of funding and maintaining the public parks, 5 percent of real estate transfer tax is now going into a fund set aside to maintain what Burke called “two of the best public parks on the coast.” Other services that are part of the Town’s goals include emergency management and storm cleanup; engagement with other municipal and county and state governments, “to improve the quality of life in Fenwick Island”; and high-quality beach patrol services during the summer season.

Burke noted the recent addition of an ATV and side-by-side vehicle, which have enabled the beach patrol to provide rides to beachgoers who might otherwise have a hard time getting over the dunes.

As far as finance-specific goals, Burke said they aimed to keep property taxes at current levels; pursue opportunities for government grants; save transfer tax revenue and any surplus funds for capital improvement projects, such as street resurfacing, equipment replacement and drainage improvement; reserve a portion of transfer tax revenue to fund any general-fund deficits; build long-term reserves; maintain cash reserves to help maximize interest income; reduce worker compensation and insurance premiums, if possible; offer competitive salaries and benefits; offer workplace safety workshops; and allow for professional development opportunities for staff.

Burke noted that the $1.8 million operating budget was balanced, and in addition to the 5 percent of transfer tax revenue now going into the dedicated parks fund, the Town will continue to put 10 percent of that revenue into its dedicated street fund.

Delving into the details of the budget, Burke did note a “nominal” increase in health insurance rates. An improving economy, he said, had been seen in increased bonfire fee revenue, as well as the 109 parking permits sold that far in July. He said increases were expected in revenue from property taxes, rental receipt taxes, permit fees, transfer taxes and the beach concession for the state-line beach.

Seeing a drop in anticipated revenue, Burke said, was the Town’s lifeguard sponsorship program, which was started two years ago as an opportunity for local businesses to advertise on the back of the Town’s lifeguard stands and support the beach patrol service with that funding.

He said the first year of the program had brought in $13,000, but it only garnered $8,000 in revenue for 2014 and just $4,000 this year. He said there were plans to revamp the program for 2016 to get the revenue levels back up.

While property tax rates remained unchanged, Burke said property tax revenues had increased by $10,000 from the 2014 fiscal year to the 2015 fiscal year, with a number of properties seeing upgrades, as well as the razing of some older structures in favor of newer ones.

Burke said most of the Town’s departments had seen a reduction in expenses. Increases were seen in insurance and the cost of daily operations, with the new public-safety building adding about $10,000 annually in new operations costs.

Planned expenditures for the coming fiscal year included resurfacing of roadways, paving, drainage projects, installation of stone in some areas and facilities maintenance. Burke particularly noted that ponding was causing problems with some residential/commercial property borders and that they would be getting engineering work done to help address that. “We’ll do our best to find grants” for that, he added.

The police department will get a new vehicle and replace its automated defibrillator devices, while the Town’s administration will have costs for technology projects and professional development, taking the operating budget from $225,000 in 2015 to $260,000 in 2016.

Burke emphasized that the Town is in good financial standing and reiterated that he feels the economy is rebounding, but that there remains concern about a number of existing funding sources.

“Like any town, we take it year to year. You never know what is going to happen with State and other funding,” he said, noting persistent proposals to eliminate Municipal Street Aid funding to the towns and to reduce the municipal portion of transfer taxes from a 1.5 percent even split between State and local government to a 1 percent/2 percent split favoring the State.

“I would recommend people keep in touch with their legislators,” he said.

Outgoing Mayor Audrey Serio thanked Burke for his revisions to the budgeting process during his three years with the Town. “The way the budget is done now makes it much, much easier,” she said.

“The figures were being adjusted before our eyes,” Weistling said. “It’s a very smooth process.”

“We’re also planning five years ahead,” noted Councilwoman Diane Tingle.

Asked why the Town doesn’t include transfer tax in the revenue areas of its core budget, Burke noted that the council makes the decision whether to use transfer tax revenue for operating expenses and that when he had been hired, the Town didn’t need the transfer tax revenue to fund its budgets.

“This year, there is a small portion being used to fund operations,” he acknowledged, pointing out that a decade ago, use of transfer tax as a major component of a municipal budget had been common in the area but that the reduced amounts seen during the recession had caused municipalities to re-think the idea, with Fenwick having avoided the pitfall by not including transfer tax as a core revenue item for the operating budget.

“During the recession, several towns were technically broke because they had it in their budget, and Fenwick Island was not broke,” Tingle said.

As it stands, transfer tax revenue can fluctuate unpredictably, he said, with $206,000 in 2013, $174,000 in 2014 and $400,000 in 2015. That makes it tricky to include in a budget.

“We have used it for capital improvements, if necessary, but it’s sort of our savings account,” Serio explained.

Asked about the solid waste collection costs and related expenses, Burke acknowledged that more than half of the cost of the service is in administrative areas. “For a long time, we have charged for the administrative costs for the work [of town staff] and oversight of contractors. It has always been more than actual cost,” he said of the basis for fees charged to property owners for the various waste services.

The council approved the budget as presented, on a 7-0 vote.

Also on July 24:

• The council unanimously approved the Town applying for a surface-water grant from DNREC. The item was added to the agenda on short notice due to the grant application deadline falling before the next council meeting.

The grant would fund half of the cost of engineering for some of the Town’s potential drainage projects, which include areas near Pottery Place, Just Hooked and Claddagh pub. The grant allows for up to $50,000 in total project cost, but Burke said he was anticipating the costs to be closer to $30,000, though he was still applying for the full $50,000, just to be sure. The Town would pay no more than $25,000 for the grant-approved projects.

• Burke announced that the Town will “go backwards to go forward,” reinstating its printed newsletter after a less than successful attempt to go paperless. The next newsletter is set to be mailed out no later than Sept. 15, while the Town will continue to post information on its website and social media, including surf conditions. He also noted that the Town’s new telephone system was up and running, though he acknowledged a few “snags” early on.

• Burke reminded townsfolk that solid waste service from Waste Industries is set to start Sept. 1, in a change from the previous vendor.

• Building Official Pat Schuchman noted that the previous three-home elevation project using a FEMA grant has been reduced to a two-house project after one property owner withdrew. The houses will be elevated to 18 higher than the minimum requirement, she said, a number arrived at when the council’s decision on the issue of freeboarding was up in the air.

• Beach Patrol Capt. Tim Ferry reported a spate of busy days for lifeguards, with 21 rescues in the prior 10 or 11 days, he said, and 55 for the summer that far, providing experience for the squad’s younger guards.

Ferry said the most significant thing in recent days had been requests for rides via the side-by-side vehicle, with 132 requested in the first 23 days of July alone and 169 for the summer that far. The total in 2014 had been 341 rides, with 237 being requested in 2013. “I expect no fewer than 350 side-by-side requests,” he said of the season as a whole. “Having the ATV allows the beach patrol to respond to emergencies while still providing that service.”

Despite the significant number of rescues, Ferry said there had been no serious injuries. “We have been fortunate,” he said. “Most of the rescues have been surf-related, but more rip current-related — ironically, on the incoming tide,” he noted, adding that the most serious injuries were when two people got large fishhooks embedded in their foot or ankle areas and had to be transported.

Wildlife has also been an issue this season, he said, with man-o-war having twice washed up on the town’s beach “with no harm to beachgoers. We disposed of it,” he said, also noting visits by a humpback whale that day, as well as some sightings of sharks this summer. “It’s a little bit of everything with this warmer water.

“The guards have done a great job guarding the beach and effecting those rescues. With more and more people, it’s inevitable that we’re going to have some of those kinds of things happen,” he added of the bruises, dislocations and other comparatively minor injuries seen thus far this year, “but nothing serious.”

• The council unanimously approved second readings of a number of zoning ordinances, including ones allowing use of pervious asphalt or concrete inside town limits; a definition of vegetated stormwater buffer; changing the front building limit line in the commercial zone from 25 feet from the property line to 15 feet back; allowing parking in the front setback in the commercial zone; requiring sidewalks in compliance with DelDOT and ADA requirements, or DelDOT-approved alternative, be built anytime substantial improvements are made in the commercial zone; and removing the previous 9-foot encroachment into the front setback allowed for stairways and decks in the commercial zone, due to the change in the setback.

The changes also require a fence along commercial rear property lines when they abut a residential property, but no longer than 4 feet, with an opening of 20 to 30 percent to allow for airflow and visibility maintained for cars; restricting landscaping and structures to no closer than 5 feet from the front sidewalk and no higher than 3 feet, and no new landscaping or structures less than 10 feet from the curb, with existing areas grandfathered until the total destruction of the existing building.

• The Beach Committee reported another successful bonfire, with $6,000 raised for the lifeguard competition fund. Ferry said four lifeguards had qualified for the national championships in Daytona Beach this year, with some of the remaining funding being used to send female guards to a women’s national competition in New Jersey. He thanked the beach committee for their work and local businesspeople who he said were eager to donate toward the fundraising efforts.