The Bethany Beach Town Council will look to adopt its budget for the 2016 fiscal year this Friday, March 20, during the regular monthly council meeting. The most recent draft, which was up for public comment in a hearing on Monday, March 16, calls for $8.4 million in revenue for the Town in the fiscal year beginning April 1, with $7.7 million in operating costs and $1.4 million in capital projects expected.
Monday’s hearing was characterized by the lack of public comment, as no citizens beyond the council and town employees attended, though the hearing was extended for a few minutes to allow for any late arrivals.
Council Treasurer Jerry Dorfman noted that the draft budget had been discussed in several public meetings that had included analysis of past years’ finances. He said the Town’s “conservative approach to budgeting … has served us well. The Town remains in good financial condition.”
Under the draft budget, the Town’s General Fund revenue is projected to increase by $327,000 (about 5.8 percent) over 2015. General Fund operating costs are budgeted at $203,000 (4 percent) more than in 2015, primarily owing to increases to lifeguard staffing and conversion to new municipal software.
The General Fund Capital budget consists of several projects and totals $535,000, including $400,000 for street paving, $95,000 to replace a 16-year-old backhoe and $40,000 to purchase two large outdoor holiday trees, which the council approved late last year as an enhancement to its winter holiday season activities.
Sanitation Fund revenues are unchanged in the proposed budget, while the Sanitation Fund operating budget is increasing $12,000 (1.6 percent), with no new capital funds budgeted.
The major specific changes from prior years’ budgets include:
• A 25-cent increase in the hourly parking rate for metered parking, to $1.75 per hour, generating an estimated $190,000 in additional revenue. (The Town also charges a 50-cent fee for non-cash payment for parking at its paystations.)
• A commensurate increase in fees for daily and weekly parking permits, with visitor and construction permits costing $23 for a one-day permit, $69 for a three-day permit and $160 for a seven-day permit, generating an estimated additional $3,000 in revenue. (Property owner permits remain free for the first permit, while the cost is $35 for a second permit.)
• Outside shuttle bus operators are also seeing a similar rate increase, being charged $3,500 for the season for shuttles seating 10 or fewer people, or $7,000 for shuttles seating 11 or more, expected to generate about $6,000 in additional revenue for the Town. (The rider fee for the Town shuttle remains 25 cents.)
Dorfman noted that the parking-related fee increases were specifically targeted to increase summer-related revenues, “to make sure the ones who come here and use our beaches during the summer are the ones who pay for the costs of summer services” — calculated so that revenues generated by the summer season fully cover the costs of summer services.
“Summer season costs have increased significantly in the past few years, mainly from enhancements to lifeguard staff, to improve safety,” Town officials said in their budget summary. “Secondary reasons are improvements to bandstand performances and general cost inflation. … With this focus, we have been able to maintain a reasonable level of reserves, provide outstanding services and incur minimal debt. … While Town finances are in good condition, adjustments to revenue are recommended as needed to keep it this way.”
• A 21 percent increase in the water use fee rate, which Dorfman noted hadn’t been increased in seven years, and which is estimated to generate additional revenue of $208,000.
The proposed water rate increase, officials said, is expected to sustain the Water Fund for at least the next five years and is expected to cost most residential water users less than $55 additional per year.
According to the Town, the additional revenue is needed to cover annual increases of 3 to 4 percent in the cost to operate its water plant, including the personnel costs for three full-time workers and administrative support, water treatment chemicals, electricity and insurance.
They said that, without the increase, the Water Fund Capital Reserve would fall below the recommended minimum established by the Town’s Fund Balance Policy this year, because of the $350,000 needed to replace the media in the filter gallery of the water plant, which has not been replaced since 1992. In fact, the Town’s 2014 financial statements showed that the Water Fund experienced a small net operating loss and was expected to show a more significant operating loss for the 2015 fiscal year, which ends March 31.
The Water Fund Operating budget is increasing $82,000 (8.8 percent), mainly from insurance increases and conversion to new municipal software. The Water Fund Capital budget totals $600,000 and includes $350,000 to replace media in the filter gallery, $100,000 to improve water pipes on South Atlantic Avenue, $50,000 to construct a structure to house the mineral tank and store equipment, $50,000 for replacement of equipment if needed and $50,000 for unplanned repairs to the distribution system, as needed.
The council will consider adoption of the draft budget at its meeting on March 20 at 2 p.m. at town hall. It must adopt a budget prior to the start of the new fiscal year on April 1. Printed copies of the proposed budget are available for review in the Finance Office of Town Hall and on the Town’s website at www.townofbethanybeach.com.