South Bethany Town Council members are squaring up the books in preparation for the 2007 fiscal year, and gathered for the first of three special meetings/budget workshops on Feb 9.
They’ll need to adopt the budget at the Thursday, April 13, council meeting. (The meetings are normally held on the second Friday, but April 14 is Good Friday.) But council’s moved through a lot of material already, having reviewed anticipated revenues and most of the general and administrative (G&A) expenditures (other than salaries and salary-related costs, which remain to be determined).
Financial Administrator Renee McDorman broke revenues into two categories – one for the general operating budget and one for capital projects. Council’s anticipating just a little less than $1.47 million in revenues for the operating side, up just a couple of percentage points from last year, McDorman said.
The town expects to collect about $540,000 in real estate transfer taxes, but South Bethany accounts for one third of those revenues ($180,000) on the capital side. The state places certain restrictions on all these monies, but the other two-thirds ($360,000) is used around the operating budget.
Transfer taxes are the major fundraiser around most of the local towns, but South Bethany’s revenues from an 8-percent tax on rental proceeds comes in a close second. McDorman anticipated $450,000 from rentals this year.
There’s a certain honor-system element involved in rental tax collection, but she characterized the residents as an honest bunch. As McDorman pointed out, the town was also able to report a 100-percent success rate for property tax collections last year.
She anticipated a little less than $230,000 in property taxes this year (a roughly 1.5-percent increase).
Elsewhere, McDorman budgeted for $70,000 in magistrate’s fines, $30,000 in rent from Artesian (for lease of the land around the water tower), $30,000 from interest on investments, $27,000 in cable television franchise fees (from Mediacom) and $23,000 from building permits.
Trash collection is a wash — McDornan budgeted $156,000 in fees this year to support the service.
Back on the capital side, she noted about $740,000 in reserves under the 0.5-percent transfer tax heading. However, the town earmarked nearly $220,000 of that last year, to help its police officers buy into a state pension plan.
“We might have to take some money out of the 1-percent (transfer tax revenues) to cover the difference, for the police station and town hall,” McDorman pointed out.
South Bethany has budgeted $980,000 for the pending town hall/police station project.
McDorman discussed grants, noting a decline in Municipal Street Aid, with the Delaware Department of Transportation’s (DelDOT’s) ongoing budget problems. The town received $75,000 in 2002, but she didn’t anticipate more than $50,000 this year.
“What’s happening is that many of the towns are building more and more streets,” noted Council Member Bob Cestone, “but they’re getting the same amount of money, so the formula’s changing.”
On the plus side, street aid wasn’t use-it-or-lose-it funding, Cestone added — it carried over year to year. And he expected South Bethany’s need would taper off, once the town repaved Ocean Drive — at least until streets paved in recent years started to wear out again.
McDorman reviewed the beach patrol budget ($168,000) and then G&A. She expected a 4.5-percent health insurance increase, to $115,000 — as McDorman pointed out, the town’s rates were somewhat more stable, because South Bethany was under the state plan.
She recommended $70,000 for general insurance and $40,000 for legal fees. Although, as noted, salaries and Federal Insurance Contributions Act (FICA) withholdings remain to be determined, McDorman said the town had budgeted $50,000 and $165,000, respectively, last year.
Police Chief Joe Deloach traditionally presents his own budget, and McDorman said he had that nearly finalized on Feb. 9.
But everyone’s phone service falls under G&A, and when Mayor Gary Jayne asked why that budget line had doubled to $18,000, she said it was in large part due to wireless service for the police department laptops.
The old service, which cost $170 a month, had been declared obsolete and discontinued, McDorman said — the new service cost $450 a month. “It’s an increase, but the cost of doing business,” she pointed out. “Those services are vital.”
In non-2007 fiscal-year business, council approved three purchases — a $30,000 propane generator, via Homeland Security funding, and two vehicles. As Town Manager Mel Cusick pointed out, council was about to miss the deadline for purchasing under state contract, and would have to wait until fall if that deadline passed.
Council members directed Cusick to go ahead and buy: (1) a Ford Ranger pickup for the town’s code enforcement officer ($12,000) and a Dodge Stratus for general use ($13,000).
And finally, they awarded a $54,000 contract to Delmarva Paving, for work on nine lateral streets, east of Route 1. According to Cusick, five companies bid the job.
He expected Delmarva Paving to initiate the project on April 5, and finish it by May 5.