The Ocean View Town Council this week reviewed a draft of the Town’s 2015-fiscal-year budget.
Finance Director Lee Brubaker told the council that the Town should focus on reducing the transfer tax used for operations costs.
For the draft budget, the Town is projected to receive $620,000 in transfer taxes, but plans to reduce the amount available for operating expenses by $25,000 each year. In the 2014-fiscal-year budget, the Town reduced the amount available by $50,000. For the 2015 budget, the draft shows a reduction of $75,000.
“The plan is to decrease transfer tax used for operations by an additional $25,000 each year, with the goal of weaning the Town from its dependency on this unreliable revenue source,” explained Brubaker.
The Town plans to allocate no more than $550,000 in transfer taxes toward balancing the annual operating budget.
“The Town is going to face a mini-boom in transfer tax,” said Mayor Gordon Wood of the recent improvement in the area’s real estate market. “It’s not going to last forever. What’s being done right now, I think, is to the credit of both staff and council.”
The council also discussed raising property taxes by 3 percent in the 2015 fiscal year. For the last two fiscal years, there have been no property tax increases. Prior to that, there were three years of increases. From 2010 through 2012, there was a property tax increase of 8 percent. In 2013 and 2014, there was no increase in property tax. During those two years, however, it was projected that there would be an increase in property tax revenues of 5 percent.
“Three percent on a half-a-million-dollar property works out to be $794. A 3-percent increase takes you to $818,” said Brubaker of the $24 difference. “That’s less than half a cent per $100 assessed.”
“This is the decision we get to make,” said Councilman Bob Lawless. “This is where we get to wrestle with what increase, if any, there ought to be.”
Key budget objectives for the year include maintaining adequate cash for two months of operations at the end of each fiscal year, without reliance on any state or federal grants, maintaining all Town capital assets in good repair and maintaining the Emergency Revenue Trust Fund.
Brubaker added that other objectives are to maintain the Town’s approximate 23 miles of streets, by continuing with annual paving rehabilitation projects.
The draft budget only included three grants, which the Town receives consistently: $25,000 from the County for local law enforcement, $30,000 from the State for police pensions and $99,000 from the State in Municipal Street Aid.
The draft also budgeted for a 3 percent increase in salaries for Town employees. Wood noted that the State only had a 1 percent increase in its salaries and asked for the council to look instead into a 1.5 percent salary increase for the Town’s employees.
The budget draft also noted that the Town will cover 6 percent for employee health benefit increases.
“The Town absorbs 6 percent of the increase — anything above is covered by the employee,” said Brubaker. “It’s 6 percent of whatever that healthcare premium increase is.”
Also in the draft, $96,900 is allocated for public safety for the 2015 budget, with another $1,859,900 for Public Works, which includes the construction of the new public works building, as well as demolishing the two buildings located at 6 Oakwood Avenue and paving the site.
Wood questioned whether an ice machine was necessary for the new public works building, instead of using ice from the facility’s refrigerator.
Public Works Director Charles McMullen said that the public works department fills large water coolers of water — sometimes multiple times a day — to take with them when they are working outside in the town. He emphasized his concern that the facility’s refrigerator would not be able to keep up with ice production at the rate it would be used.
Wood also questioned whether or not the police department would need a K-9 unit, which was a part of the draft budget. The department hasn’t had a K-9 unit in more than five years, when their canine officer was accidentally killed by the summer heat in a patrol car.
“For the life of me, I don’t know why our police department needs a dog,” Wood said. “What other towns have dogs?” It was noted that the Dagsboro, Lewes and Bridgeville police departments all have K-9 units.
“If we have a dog, here’s what’s going to happen… what do we gain, other than the fact that we want a dog?” Wood asked. “I don’t see that it’s needed.”
Councilman Tom Sheeran said that, back when the Town did have a K-9, the drug issues in the town were far less than what they are today.
“If you have a drug-sniffing dog, word gets out, and the people doing that don’t come near you, because there’s a good chance of getting sniffed out,” he said.
Police Chief Ken McLaughlin was unable to attend this week’s budget workshop, but the council will hear from him at next month’s workshop.
“I want to hear what that case is,” said Sheeran.
The Town plans to hold another budget workshop in March, to continue the discussions and revisit some points.
“For our next workshop, it’s incumbent on each of us to go through this and come with those questions and get them answered,” said Lawless.
The draft budget was formally introduced at the council meeting held following the workshop. Copies of the draft budget can be obtained at the town’s administrative offices, located in the Wallace A. Municipal Building at 201 Central Avenue.
The next workshop will be held on Tuesday, March 11, at 5 p.m. in town hall, before the town’s regular council meeting at 7 p.m.