Fenwick Island Town Council and Budget Committee members met Tuesday, June 7, to make final tweaks to the town’s budget for the 2006 fiscal year. The final draft budget is scheduled to be presented to the town at the council’s June 24 meeting, in anticipation of the end of the 2005 fiscal year in July.
The draft budget calls for $1.437 million in expenditures and the same amount incoming in the form of revenues. Those revenues include $110,595 of the town’s total anticipated realty transfer taxes, in a move designed to make the budget revenue neutral. (Remaining transfer taxes will go into other town accounts and reserves.)
The budget (both anticipated revenues and planned expenditures) is an approximate 12 percent increase from the figures in 2005 fiscal year budget — $1.28 million.
Council and committee members had previously met and engaged department heads in the town to determine budgets for individual departments, as well as plan for revenue. They were therefore in general agreement on the amounts presented.
But Council Member Vicki Carmean raised objections to the 20 percent planned increase in total police department salaries, citing how significant that figure was in comparison to the 3.3 percent average increase in total salaries for all town employees.
Carmean said she realized the increase from $240,000 in the 2005 fiscal year budget to $289,500 in the 2006 fiscal year budget reflected known increases in overtime for police officers but she was emphatic that the town not write a “blank check” for the police department’s overtime needs.
Public Safety Commissioner and Council Member Theo Brans said the amount reflected not only this year’s known increase in overtime but also an overall increase in the number of tickets issued by Fenwick Island police — a figure that results in overtime due to court appearances by the officers as some of the tickets are fought and taken to court.
Brans said the ticketing was, in effect, a break-even situation, with increased ticket revenues not bringing additional revenue to the town coffers but coming closer to covering the extra man-hours needed from police officers to adjudicate the tickets.
(The 2006 fiscal year budget anticipates $38,000 in vehicle violation fines, $3,000 above the 2005 budget).
Budget Committee Chairwoman and Council Member Audrey Serio said she believed concerns about overtime should be addressed in the budgeting process for the 2007 fiscal year, with the current year being used to analyze and plan how to reduce overtime hours.
Mayor Peter Frederick said he also thought a plan to reduce overtime was needed before any changes could be made in the budget amounts, pushing such a change into the future.
Brans stated strongly that the obvious way to reduce overtime was to eliminate court appearances entirely and to tell officers they could not take off when ill, indicating his disapproval of such suggestions.
Carmean responded that she was not asking for any such extreme measures but instead emphasizing that the overtime issue needed to be looked at, as well as involve checks and balances to ensure it was being used efficiently.
Frederick said he believed as much as 80 percent of police overtime was due to court appearances, with the end result of cutting back on court appearances being that people would fight or refuse to pay tickets more often, knowing the town wouldn’t pursue the matter in court.
While smaller towns had been known to make such a decision on financial grounds, Frederick said he didn’t support any such change in Fenwick Island.
Carmean’s arguments for increased scrutiny of the overtime heard and generally agreed to, it was additionally noted that the hiring of two part-time officers to cover increased needs also served to increase the police salary budget for the coming year.
Much of the discussion at the June 7 meeting involved the details of how the budget is laid out, with concern expressed over designating building and maintenance costs for town properties (such as town hall) as “public works” expenses and other similar designations.
Historically, since such projects are overseen by the public works department, the expenses have ended up as part of that department’s budget.
While committee members agreed that costs to replace doors and upgrade electrical systems in the police department were clearly building issues that should be handled as part of “general fund” expenditures, questions remained about where to place expenses such as those for utilities (such as electricity, phone service and water) at the public works building itself.
The committee initially started to move such expenses to the general fund area but later agreed that the process was far too complex to be done at such a late stage in this year’s budget process. Instead, the budget format will be reconsidered over the course of the year and any changes made to the 2007 fiscal year budget.
Among significant changes from the 2005 budget to the 2006 version are:
• Increases in gas and oil expenditures, representing an estimate based on expected use and anticipated continuing increases in petroleum prices;
• Increases in engineering services costs, due to ongoing drainage and flooding issues in the town (deemed a top priority by committee members, due to public feedback);
• Decreases in capital expenses for public works, due to a focus on grounds, maintenance and equipment in the coming year;
• Increases in lifeguard salaries, due to a high rate of return for experienced lifeguards, as well as planning ahead for anticipated annual raises and uniform costs in the first months of the 2006 summer season as part of the 2006 fiscal year (previously, raises were given in August, to coincide with the fiscal calendar);
• An increase ($400 to $1,000) in expenses for the town’s Junior Lifeguard program (anticipated to pay for itself through fees, but without revenues planned in the budget due to unknown participation);
• No increase in reimbursement for lifeguard salaries from the state (despite a town request for such). The state reimbursed Fenwick Island for $50,000 in salaries and equipment in the previous year, for coverage of the state-controlled beach, with the same amount ($3,000 of which is shifted to equipment over salaries) anticipated in the 2006 budget. (The Bethany-Fenwick Area Chamber of Commerce contributed $500 to salaries in both years.)
• Increased costs for printing and advertising, largely due to a need for new business cards and letterhead this year;
• Increases in garbage fees revenue, brought about as a result of increased tipping fees to the town for use of the landfill, as well as planning for capital expenses in the future;
• Decreases in insurance costs, offset by the division of workmen’s compensation costs into a separate category and allowing for normal annual increases in insurance rates ($108,000 total in both years);
• Increases in postage and printing costs due to increased reliance on outside mailing services — a move it was hoped would increase efficiency for administrative employees (to be monitored during the year to prove efficiency);
• Increases in revenue from interest on the town’s financial accounts (attributed to finance officer Gary Esposito’s work on finding high-yield accounts);
• No increase in property rental receipt taxes ($225,000), due to a decline in property rentals;
• Decreases in rental licenses ($22,000 to $20,000), again due to a decline in rentals;
• Increases in property tax revenues ($450,000 to $480,000), due to an increase in taxable properties;
• A $140,000 amount under revenues, due to a budget surplus from the 2004 fiscal year that was not previously applied;
• Increases in “service grants” ($750 to $2,500) to reflect the town’s new donation policy and grants to the Fenwick Island Lighthouse and Bethany Beach Volunteer Fire Company;
• Capital expenses of $3,800 (up from $3,000) to replace one of the town hall air system components;
• Increases in office equipment maintenance ($7,500 to $9,500) to reflect replacement of equipment, computer services and copying costs, as well as an increase in offices supplies costs ($8,600 to $10,500) attributed to normal price increases;
• Increases in capital expenses for office furniture and systems ($2,500 to $12,000), reflecting the purchase of a recommended dedicated server with a backup drive;
• Decreases in building maintenance ($14,800 to $10,900) reflecting projects done in 2004 and 2005, with men’s room renovations, repair of a handicapped access ramp and painting of town hall planned in the coming year; and
• Maintenance contracts for $11,700, to cover maintenance for the newly planted median strips, HVAC, termite control and janitorial services.
During the meeting, Esposito noted that the town’s annual revenue to date was $18,000 above the amount anticipated in the 2005 fiscal year budget, indicating a likely surplus for 2005’s revenue.
He also noted that the town would likely have to borrow some $100,000 from its real estate transfer tax funds for a period of three to four weeks in late June or early July, to pay for costs of the town’s median project.
The contractor for that work came in under the anticipated budget and has applied for payment, but the state has not yet provided its portion of the funding for the project. Esposito said those state funds could arrive prior to the end of the fiscal year but would not be in place in time for timely payment to the contractor — necessitating the brief borrowing of funds.
He further noted that the town’s portion of the project cost would be reduced due to the lesser cost of the contractor’s work.
Costs to replace carpeting at town hall were previously stripped from the 2006 fiscal year budget, in anticipation of possible renovations or construction. But Carmean requested that the runner in the hallway of town hall be replaced as soon as possible, due to degradation she felt might be a safety hazard.
Council members agreed the replacement of that carpet could be taken care of under the 2005 budget, prior to the conclusion of the fiscal year.
Finally, the issue of long-range planning was tackled, with the idea of possibly setting aside some funds for such projects, either in the coming fiscal year or near future.
Serio said she had made a list of three items that were regularly mentioned as needing attention as long-range plans. Those included:
• Signs (street, informational and beach-end) that are in need of updating (Bethany Beach and South Bethany have both recently updated town signs);
• Drainage and flooding problems, deemed a top priority by town officials and property owners (Serio said she believed funds needed to be earmarked for engineering to determine a final answer as to whether the problems can be improved and indicate officials’ desire to address the situation); and
• Town hall needs, possibly including renovation and/or addition of space to meet oft-mentioned needs for space for town employees and functions.
Council Member Harry Haon said there were at least two or three other items that had been mentioned for long-range planning during the town’s “visioning” process. He said he believed council members’ goal for the year should be to evaluate such projects and get ballpark figures for their costs, with prioritization and practicalities to be decided once those numbers are available.
Haon said the goal should be to have those figures by October or November of 2005.
Frederick noted small amounts of funds set aside by the town in previous years, in individual accounts, designated for projects that had not yet been done. He recommended those amounts and accounts be cleared up by working on such projects, using the funds for the uses that had been decided at the time.
He said, for example, the signs project could potentially be tied to $40,000 in funds previously set aside for beach replenishment purposes. Such a handling of those stagnant funds, he said, would serve to prove to lenders that the town was handling its finances in a professional manner, in the case that the town should seek financing for larger projects.
Council members were in general agreement that those older funds should be spent for the purposes for which they were intended, with emphasis on funds targeted at infrastructure needs — as many of the long-range projects would be.
Long-range planning was to be an item on a future council or workshop agenda, with no specific date set for such a discussion.
Committee members praised the work of Serio in overseeing the budget process.
The final draft budget is due to be presented at the June 24 council meeting and could be approved at that meeting by a vote of the council.