In recent years, the development presence east of Millville in Delaware’s “quiet resorts” has been visibly undeniable. Second-home buyers have flocked with their families to the beaches in the summer, congesting area roads and patronizing area businesses.
Retirees have done the same but in every month of the year, helping establish a large year-round population in the area that is evident whenever driving down Routes 1 or 26 on a weekday or visiting shops in downtown Bethany Beach on decent Sunday afternoons.
Besides serving as a pass-through for the deluge of visitors and home for some buyers who like the inland feel, though, the town of Millville has remained mostly unchanged. Now, it is at a crossroads.
In Millville alone, nearly 3,500 homes have received approval without yet receiving permits to build. Hundreds more, including those in the next annexation phase of the Route 17-based Millville by the Sea, are planned.
At least 7,500 homes have received preliminary approval from county or town officials in the Coastal Point’s coverage area without yet receiving building permits, county and state records show. It is a comparable number to the roughly 6,300 homes that received permits in the newspaper’s coverage area since 2000, alone.
Lisa Giorgilli, a self-employed mother of four who moved to Millville from Baltimore a decade ago to raise her children in the town, said she does not support the pace of development in the town.
“I think it’s too much too soon,” said Giorgilli. “Honestly, I don’t think the land can support that many homes. I have no problem with development but I think it ought to be thought out a whole lot more.”
The Delaware Department of Transportation plans to expand back roads — including portions of Burbage and Windmill — and mainline Route 26 remains on hold while the state considers approving a fee package that would eliminate a $1.5 billion shortfall.
DelDOT has also looked to area developers to help with expansion of roads that will surely be impacted by future Millville homeowners — but that were also found in need of expansion before approval of Millville developments.
Millville By the Sea developers, for instance, plan to build roughly 3,200 homes over the next 10 to 12 years, off Route 17, a baseball’s toss from already-crowded Route 26.
Nearly 1,000 additional homes are planned in already-approved Dove Landing and Barrington Park, off Route 17 and Burbage and Substation roads in Millville. Some 114 units have been approved for Windhurst Manor on Windmill.
In 2000, the date of the latest available census information, 272 people lived in Millville, then a town of only 142 housing units.
Millville officials approved new developments — which will increase housing in units more than 20 fold above 200 levels — without town infrastructure in place and amid questions and continuous delays of road projects most deem necessary to support future home buyers. That is a fact that confuses Giorgilli.
“They are trying to congest everything because of funds,” she said. “All they want is money. Look what happened to Ocean View. Bethany Beach is raising everything. A place to live is not about money. It’s about the proper environment and the use of what they have.”
Former Millville Councilman and lifetime Millville-area resident Cliff Toomey, who lives on Burbage, echoed Giorgilli’s infrastructure concerns.
“It looks like a beautiful place,” Toomey said of Millville By the Sea, which is complete with amenities such as a community center and an outdoor pavilion, “but I’m just concerned as the infrastructure. Are we putting that in to meet the needs?”
Former Millville Mayor Gary Willey, who oversaw major development approvals, including the ones listed above, during his tenure, disputed that the developments were meant as “cash cows” for the then-strapped towns. Instead, he said, they were approved out of a “matter of survival.”
“We should be controlling our borders and making decisions about what development happens around our town,” Willey said. “We didn’t want Ocean View eventually surrounding us. We’d have had to succumb to Ocean View. It’s not all going to happen right away,” he said of the development, and “It can’t be supported or good for the town unless infrastructure in place.”
With the help of developers, sewer districts are being expanded to meet the needs of new development and to serve older homes that were on septic systems.
Relying on growth-related funds
In 2002, Millville spent just more than $16,000 and doubled that in revenues. By 2005, town expenditures had risen to more than $60,000, and in the proposed fiscal 2008 budget to $393,000.
Officials mulled over a tax increase last month but, instead, decided to attempt to balance the proposed 2008 fiscal year budget with variable, one-time, annexation and permitting fees. The $300,000 in proposed revenues coming from those fees makes up more than 75 percent of the revenue side of the proposed plan and is all unreliable long-term income.
“We have (balanced the budget) with very conservative figures,” said new Millville Mayor Don Minyon, who added that he was not worried yet about relying on variable revenue sources. “We don’t think there is any need for any tax increase at this time. That’s not to say at some day down the line we’re not going to have to look at that.”
Rising consultant and engineering costs, and salaries for new hires are directly related to growth of the town, officials have said. In the 2008 fiscal year, town officials are proposing to take the town manager’s position full time and hire part-time financial and administrative clerks. The town hired a building code official recently and last year hired Debbie Botchie, its first full-time employee, as town clerk.
Millville Town Manager Linda Collins — who will assume the full-time position May 1 — said that despite their political ramifications, property tax increases are inevitable. They would serve to ensure long-term stable income for the town, she added, and to retain development-related funds for capital projects and for potential future investments in measures such as recreation.
“It’s a no-no in the political world,” Collins said. “But you got to do what you got to do. I would hate to see town hall shut down because you don’t have (the money to pay) the people. You have to do something with the property taxes.”
Similar situation, different towns
Other towns are currently facing the consequences of relying on growth-related funds.
Ocean View has added five full-time police officers and a part-time officer to deal with growth since 2001 — all on the back of transfer tax revenues, which eclipsed $1 million in 2005 but dropped roughly 50 percent last year due to a sluggish real estate market. (Transfer taxes are collected when a property changes hands and are shared at town, county and state levels. The funds can only be used for public safety, public works, capital expenses and debt reduction.)
Once leaning these funds on the transfer tax, the town pays about $100,000 per officer annually, including benefits, nearly equaling the $900,000 it brings in through stable property taxes in police salaries alone. Without tremendous transfer revenues, Ocean View is eyeing a 9 percent tax increase and capital cuts, including de-funding road and drainage projects, to keep up with rising operational costs.
Town officials currently shell out more than $1.9 million annually “just to keep the doors open” and some believe this year’s tax-increase proposal will be just one of many in the town’s future.
Town Councilman Eric Magill said it was once difficult to raise property taxes with millions in projected revenue coming from the transfer tax, but last week he said that any town relying on transfer tax, or other sources of variable income, is “kidding itself.” Now, a property tax raise has become the inevitability it possibly has always been.
“It is a problem when you start to live on something that is a variable income,” said Roy Thomas, chairman of the town’s long-range financial planning committee. Thomas said he doesn’t believe that further tax increases, besides the one proposed this year, are inevitable.
“What do you do in the down years? It’s not rocket-to-the moon by any stretch of the imagination. Property taxes are a fixed income. It is predictable.”
After taking a nearly 50 percent hit from budget transfer tax projections of $1.4 million, Bethany Beach recently approved a 100 percent property tax increase, taking that rate to 16 cents per $100 of assessed value – still cheaper than the 40 cents Millville charges.
Bethany officials also increased various fees and fines, and cut departmental budgets by 10 percent last year to overcome the deficit in anticipated transfer tax revenues. The town plans to bring in nearly $1.5 million in property tax next year to help cover a $4.4 million operating budget.
“The main reason we had the property tax increase is so Bethany Beach has a steady stream of income,” said Jerry Dorfman, town councilman and treasurer. “We don’t have to worry for the next five years. To me it was the responsible thing to do.”
Counties struggle, too
County-level struggles with leaning on growth-related, viable sources of revenue are not much different than those of towns. New Castle County budgeted $40 million in transfer taxes in its operating budget — nearly the entire projected amount — this year to help cover dramatic rises in salaries and other operational costs.
Facing a still-struggling housing market, county officials are now expecting a nearly 20 percent shortfall from that number. The elimination of jobs, millions in capital spending cuts and a 17.5 percent increase in property tax are expected, but officials do not blame all their problems on the market.
“Even if the real estate transfer tax recovered fully, we’d still have a problem,” said Jeffrey Bullock, New Castle County chief administrative officer. “The deficit of this county is structural and not due just to the whims of the real estate market.”
Sussex County officials, claiming to have seen real estate troubles coming, budgeted a conservative transfer tax number of $28.7 million last year — just less than half of which was slated for capital projects — and are projecting to actually receive roughly $28 million, a 20 percent drop from a year ago.
Just more than $15 million, though, is set aside for operating expenses, including $7 million for the paramedic program. County Administrator Dave Baker said he does not anticipate a property tax increase this year to cover the loss and touted conservative budgeting for leaving the county still dependant but less dependant on variable revenue.
“We do anticipate a leaner budget,” said Baker of the plan he and other county officials begin work on this week. “(But) we don’t anticipate major changes. We’ve tried to be cautious. When times are lean, that gives us a cushion.”
Millville’s police protection problem
The Ocean View Police Department’s annual traffic arrests rose with development and an influx in population, from 497 in 2000 to nearly 2,000 in 2006. Service calls rose from roughly 700 in 2000, to more than 1,400 in 2006.
Ocean View Police Chief Ken McLaughlin said that with more than 4,000 homes planned just to the west in Millville — a town without a police department — those numbers will surely continue to dramatically rise and further stress his department, as well as Ocean View’s finances.
“I think it’s going to be like Fourth of July all year long,” said McLaughlin, who has been head of the department since 2001, adding that all of the new residents will come through Ocean View to get to the beach, as well, naturally stressing the town. “You can feel it. It’s going to be ea nightmare to drive down here. We’re looking at a real critical situation.”
Millville is currently saving 10 percent of all its transfer tax revenues in a fund dedicated to the future opening of a town police department. The town has nearly $1.5 million available in transfer tax revenue and almost $74,000 saved for a new police department — not enough to fund one Ocean View officer for one year.
Millville officials have budgeted $7,000 in next year’s proposed budget to pay for holiday state police coverage.
Collins and the Millville town council have continually stressed the importance of establishing a police department for the town — which is served only by the state police and responding Ocean View officers — but they do not have a timetable for its funding.
Citing Ocean View’s financial problems, Magill said Millville will need to act sooner rather than later lest it further stress that town’s services and, in turn, finances.
“They’re going to have to build a police department or start paying us,” Magill said. “It’s not fair to us to have to make those calls into their town.”