The Ocean View Town Council reviewed its first draft of the Town’s budget for the 2016 fiscal year this week.
“This is our first draft… It’s going to change,” emphasized Finance Director Lee Brubaker.
In a memorandum to the council, Town Manager Dianne Vogel explained that the Town’s revenue comes from a variety of sources, including property tax, which represents approximately 50 percent of the Town’s budgeted revenue.
“We have no control over this number,” wrote Vogel, adding that the Town also receives approximately 25 percent of its revenue from transfer taxes — another unreliable source.
Aside from “significant swings” in collection numbers over the last six or seven years, Vogel added that the State could choose to take some or all of the Town’s transfer tax to solve its own budgetary issues, making for another unreliable source of revenue for the Town.
“Our daily lunch money shouldn’t come from transfer taxes,” said Brubaker of the funds that support the core of town services. “If they ever do monkey around with our transfer taxes, we’re in trouble.”
Brubaker said that the 2015 fiscal year saw the Town’s all-time high in terms of transfer taxes, taking in $2.5 million.
“It’s not to say we won’t have another big year — you just can’t budget for it,” he said.
Construction and tourism represent approximately 20 percent of the Town’s budget, which Vogel said the Town also has little control over.
“As the local real estate and tourism market changes, so does this revenue source,” said Vogel.
Ocean View also receives revenue from grants. Only the three “generally consistent” grants from Sussex County, for police, as well as State grants for police pensions and municipal street aid, can be reasonably expected. “Other grants are not projected in the budget, because if we get one, we need to spend the money on a specific project.”
Vogel added that personnel costs represent approximately 70 percent of the Town’s operating budget.
In the first draft of the 2016 budget, a pool of 4 percent of total department salaries for compensation was added for increases, based on the Hendricks Compensation Study approved by the council in October 2014. It also includes salary adjustments for two Town employees whose salaries fall below the minimum level set for their positions, based on the study.
Vogel stated that overtime is projected at 10 percent, for emergency personnel and 3 percent for other staff.
A 15 percent increase for health care coverage, which the Town gets through a State program, is also projected in the draft budget.
“The State is self-insured program. They have to adopt their budget for the insurance premiums no later than March 31.”
Vogel said that when she first met with the State about this year’s costs, they anticipated a 10 percent increase in premiums; however, when she recently touched base with them again, “They said claims were worse than they anticipated,” resulting in a potentially higher figure.
Vogel said she hoped that by the end of February she’ll have a better number than 15 percent and may see some improvement.
“Again, we’re very early on in the process, and we still have a couple more workshops and council meetings, so we have opportunities to improve some of those numbers to greater accuracy.”
Councilman Tom Sheeran asked if the Town had considered giving employees a cost-of-living adjustment (COLA) or a percentage of one.
Mayor Walter Curran said he would not be in favor of a COLA for Town employees and is not a fan of them personally.
“I don’t like them, because I don’t think they really reflect the accuracy of what people need. Any cost of living adjustment really would have to be based on what is our local cost of living, anyway. You can’t go by the national index,” he said, stating that he’s in favor of raises based on merit. “I just don’t like COLAs. I just don’t think they do what everyone says they do.”
Sheeran stated that the cost of living “doesn’t do a tinker’s damn” for his Social Security but that he wanted to get the council’s opinion. He said he also believes a merit method would be better.
“It would be nice to recognize extraordinary contributions monetarily,” said Councilman Bob Lawless. “We just can’t do that.”
Sheeran agreed, adding that sometimes extraordinary contributions are just luck of the draw — for instance, if an on-duty police officer is called to respond to an emergency and saves a life.
Council members stated they could later consider creating a small fund to acknowledge employees with a small gift card to a local store, along with a certificate of appreciation.
Vogel also addressed capital projects for the Town, including maintaining the Town’s streets, investing in the Town’s infrastructure and making park improvements.
Brubaker said that public works projects for street repair that had been budgeted for the 2015 fiscal year have been moved to the 2016 fiscal year, with no major projects done in the current fiscal year.
The Town has targeted six drainage projects, estimated to cost $1,240,000 to be addressed in the 2016 fiscal year. In the budget draft, it also projects the Town to spend $150,000 on another drainage project. Three other projects, estimated to cost $930,000, have not yet been included in the budget.
“That extra transfer tax that we’ve been socking away — that’s what that can be, and I think should be, used for,” said Brubaker.
He added that there was a total of $370,000 worth of projects added to the list this year of drainage improvements to be addressed by the Town.
“We’re constrained by getting easements,” said Lawless. “This could carry over into ’17, ’18, ’19.”
Curran said that he believes the Town has made some progress regarding acquiring easements to complete the Avon Park project.
“That, at least, is progressing,” he said.
Town Administrative Official Charles McMullen added that there are some projects that are ready to go, while others are held up due to reasons outside of the Town’s control.
The budget draft will be introduced at the town council’s Feb. 10 meeting. The budget must be adopted by April 30. Copies of the draft budget may be acquired by contacting town hall, at (302) 539-9797. Only one public hearing is required prior to the council adopting the budget.