As Bethany Beach moves to the public hearing stage for its draft budget for the 2009 fiscal year, the most recent draft of the document calls for $4.8 million in revenue for the town’s general fund — just 0.2 percent above the 2008 budget’s projections and continuing a recent trend of conservative revenue forecasts for the town in uncertain financial times.
Reinforcing the appearance of that conservative philosophy is the latest figure on the town’s actual revenue to date for the 2008 fiscal year: some $4.95 million in revenue collected through Feb. 28, 2008 — above the 2009 budget projections, as well as 2008’s budgeted revenue figure.
The revenue side of the equation for 2009 actually proposes a modest increase from 2008 in the amount of property taxes the town expects to collect, from $1.488 million to $1.505 million. But the draft budget also plans for a significant drop in real estate transfer tax revenue, down 25 percent from $600,000 under the 2008 budget to just $450,000, acknowledging a continued slow real estate market in the area compared to prior years of boom.
To offset the falloff in previously relied-upon transfer tax revenue, the town more than doubled its property tax revenues in the 2008 fiscal year, by virtue of an increase in the property tax rate from 8 cents per $100 of assessed value to 16 cents per $100.
That increase was approved with the adoption of the 2008 budget last year, bringing in $1.51 million in taxes through Feb. 28, 2008, compared with the budgeted figure for the fiscal year of $1.488 million and 2007’s actual revenue — just $745,000.
The property tax increase had been targeted at avoiding a situation in which the town would be forced to dip into its reserves for regular expenses — a circumstance Finance Director Janet Connery had advised would come to pass if a significant property tax increase were not adopted.
A 4 percent increase in both the 2008 and 2009 fiscal year would not have solved that problem by Connery’s calculations, and — after a split on variations between 2 and 6 cents in increase in 2008 — council members voted 4-2 last March to go with the full 8 cent increase in 2008.
Council members had also considered an increase in the town’s real estate rental tax for the 2008 fiscal year but agreed to table the idea until the 2009 budget, after concerns were raised about the impact of even a 1 percent increase on renters — particularly business owners and year-round renters, who might pay an additional $1,000 above the $5,000 they currently pay on a $100,000 annual rent.
Despite the decision not to increase the rental tax for 2008, the town saw an increase in rental tax revenue, more than meeting the full total collected in the 2007 fiscal year ($758,934) with one month remaining in the 2008 fiscal year. The $765,111 collected through Feb. 28, 2008, exceeded the $720,000 in rental tax revenue planned in the 2008 budget.
Some $860,000 in rental tax revenue is now planned for the 2009 budget. That 1 percent increase — to 6 percent — is present in the 2009 draft budget and accounts for $140,000 in anticipated revenue increases.
Another key real estate-related area of the town’s revenue saw a fall-off in the 2008 budget year, with just $235,623 in building permit fees collected through Feb. 28, 2008, compared to the $300,000 that had been budgeted for the full year. The town collected $333,010 for the full 2007 fiscal year. Just $200,000 in building permit fees is planned in the 2009 draft budget.
Parking is another area in which the town voted in 2007 to increase existing charges to help offset falloffs in real estate-related revenue, and it’s a plan that appears to have paid off. Through Feb. 28, 2008, the town collected $1.209 million in parking-related revenue, compared to $1.14 million budgeted for the full year under increased parking meter rates, permit fees and fines.
Through the 2007 fiscal year, the town had collected just $962,061. The parking-related revenue is expected to continue to rise in the 2009 fiscal year, with $1.145 million in revenue appearing in the draft budget.
Overall, the revenue side of the budget picture in Bethany Beach is relatively neutral, with just $10,000 in additional revenue coming in through Dec. 31, 2007, over the same period in the prior year.
Only that same amount — the 0.2 percent increase — is planned in the proposed budget for 2009 versus its 2008 counterpart. Gains through minor increases nearly match continued losses in the area of transfer taxes and building permit fees.
Water fees on the rise
Some increases in revenue are planned in the town’s fiscally separate areas of sanitation and water, with a minor 3.4 percent — $21,500 — increase planned for sanitation, including some $20,000 in voluntary recycling fees collected from subscribers to pay for service in the town’s newly adopted curbside recycling program.
A significant 33.3 percent increase is planned for the water department’s operating side, which is nearly offset by a 25 percent anticipated reduction in capital-related impact fees as the Salt Pond community — which has water service from Bethany Beach — nears build-out.
The revenue increase comes in the form of a new flat rate of $125 per year per lot, as well as per-1,000-gallon rate ranging from $3.50 for accounts where 0 to 10,000 gallons are used, to $4.50 for accounts where 10,000 to 40,000 gallons are used and $5.50 for accounts where more than 40,000 gallons are used.
Out-of-town water users will also see a fee change, from $4.65 per 1,000 gallons of usage and a flat rate (connection charge) of $120 per year for a 5/8-inch meter, up to $5.50 per 1,000 gallons and $180 annual flat rate.
Capital needs at the town’s water plan are a main mover behind the fee changes, with $100,000 budgeted for replacement of an aerator to increase capacity and $120,000 for the relocation of a water line at the library property. Some $200,000 in budgeted funds from the 2008 budget are being carried over to 2009, allocated for drilling of a new well.
Personnel a major
As with revenue, the town plans little overall increases in its expenses from the general fund versus 2008, coming in at just over $4.06 million — an increase of only $40,100 from last year. Just $3.36 million of the budgeted $4.02 million had been expended through Feb. 28, 2008, with springtime and pre-summer expenses on the horizon.
Personnel costs are again a major portion of the 2009 operating budget, with 64 percent of the general fund operating costs going to personnel, and 47 percent of costs in both the water and sanitation departments in personnel.
Town Manager Cliff Graviet cited stripped-down departmental budgets in the discussion of the 2008 budget, saying personnel costs to do required work were a constant in the town’s budgeting and limited how much expenses could be cut.
Uniquely, among general capital projects funded in the 2009 budget is solar panels for the roof of town hall, at $85,000. Also funded is $200,000 in conservation, open spaces and park improvements, including boardwalks for the Bethany Beach Nature Center/Natter Park, with a $135,000 grant match; $60,000 in beach cleaning equipment; and $80,000 in road improvements not covered by Municipal Street Aid grants.
The budget also includes replacement of office equipment at town hall at $10,000, an all-terrain vehicle for lifeguards’ use for $11,000, the paving of two alleys at $50,000, and $50,000 in repairs and improvements to the town’s boardwalk.
Planning for future capital expenditures has been a major feature of the town’s budgeting for the sanitation department, and that planning will come to fruition with the purchase of two new trash trucks in the 2009 fiscal year with $100,000 in funds carried over from 2008 and $125,000 in newly budgeted monies for 2009.
Likewise, the water department will tap both $200,000 in carry-over funds and new revenue from the 2009 budget to pay for a total of $632,000 in repairs, upgrades and equipment.
Another significant point in the 2009 draft budget is changes to visitors’ daily parking permit fees, to increase to $11, $33 and $70, respectively, for one-day, three-day and seven-day permits. Beyond water fees, that is the only fee in the town’s schedule of fees that is proposed to change.
Three meetings on budget set for this week
The next review for the draft budget for the 2009 fiscal year, which begins April 1, has been set for this Friday, March 14, at 1 p.m., when the town council and Budget & Finance Committee will hold a joint public hearing to collect public input on the budget.
The council will then discuss the budget during its Monday, March 17, council workshop, at 10 a.m., where the agenda also includes discussion of capital items for the water department.
The council has moved their regular monthly meeting from Friday, March 21, to Thursday, March 20, at 7:30 p.m., due to the Good Friday holiday. As usual, that March council meeting is set to include a vote on possible adoption of the final budget.
A copy of the draft budget is available on the town’s Web site at www.townofbethanybeach.com/Archive.asp?AMID=39.