Things in Bethany Beach — financially speaking — are right on track. That, according to town Finance Director Janet Connery, who said the town’s financial picture at the half-way point in its 2006 fiscal year is comparable to where it was for the 2005 fiscal year as of the same point in 2004.
“There are no surprises and few items of interest,” she explained to members of the Budget and Finance Committee at their Nov. 4 mid-fiscal-year meeting.
Still, Connery provided the committee members with an extensive and detailed list of the highpoints among revenue items and expenditures, and an even more extensive and detailed 19-page report full of more than enough numbers to make any accountant happy.
The town was technically 58.3 percent through its fiscal year, as of Oct. 27, with 81.7 percent ($4.337 million) of its revenue recorded and 58.1 percent ($2.493 million) of its operating budget spent.
Though Connery declared there were no surprises in the budget report, there were a few significant changes — and those unpredictable when the town council approved the budget in late March. The town had grants for municipal street aid and the Volunteers in Police Service (VIPS) program cut and has had to adjust the budget’s anticipated revenues to account for the reductions.
And while one of the town’s major revenue sources — real estate transfer taxes — was declared comparable to that from the 2005 fiscal year, the subject was the source of concerned discussion as committee members dealt with the recent recommendations of a state task force that was charged with finding ways to make up for a $500 million shortfall in the Delaware Department of Transportation (DelDOT) budget.
Those recommendations included the withdrawal of transfer tax funds from the counties, with additional speculation that municipal transfer tax funds might follow them back into state coffers. Officials in Ocean View had expressed concerns about the possibility at their Nov. 1 town council meeting, and Bethany Budget and Finance Committee members were also concerned.
However, Mayor Jack Walsh emphasized that the taking of the county transfer tax funds was only one of a long list of recommendations offered by the task force, as he and other municipal leaders had been informed at a Sussex County Association of Towns (SCAT) meeting that very morning.
And Town Manager Cliff Graviet pointed out that the impact on Bethany Beach would be much less, even if town transfer tax funds were taken. The town is much less reliant on taxes from new construction than is its western neighbor, he said.
Ocean View must focus on its eventual build-out as a limit on its revenue stream, Graviet noted, while Bethany Beach is virtually built out and deals much more often with reconstruction of existing homes.
The two officials said they also felt secure that municipalities were not going to have to worry about losing their transfer taxes.
Committee member Don Doyle — in addition to being relieved that the state was not already planning to take the town’s portion of the transfer tax — said he was also relieved to hear from Connery that the transfer tax revenue for the year was maintaining a level similar to that in the 2005 fiscal year.
“Every year, we’re apprehensive they’re going to start sinking,” he said.
Connery also reported an increase in the amount of real estate rental taxes collected to date, but noted that it was too early to tell if the increase was a true one, since most of those taxes are collected in October and November.
An increase in building permit fees enacted with this year’s budget led directly to an increase in revenues in the category, up $139,000. Similarly, trash revenues were up after a fee increased designed to raise additional funds for capital expenditures (trash trucks). The additional revenue was slightly above the anticipated $69,000 to $70,000, at $71,000.
Increased use of parking meters was at the root of increased parking revenues, up $47,000 from 2004. Connery said it reflected a good summer with plenty of visitors.
Rate increases naturally resulted in higher water revenues for the town (about $100,000). But the summer of 2005 also marked a literal new high-water mark in Bethany Beach, with an all-time water usage record set and bringing in an additional $49,000 above the amount expected just from the rate increase.
That led naturally to the issue of demolition impact fees — recently considered again as a possible way to offset the increased capacity needed in the town’s water system in order to serve ever-larger homes with ever-increasing numbers of bedrooms and occupants, after having been discontinued this year.
The infrastructure impact of the destruction of smaller cottages in favor of those so-called “McMansions” might be accounted for by a destruction-based impact fee.
But Graviet said Town Solicitor Terence Jaywork had encouraged the town to move away from considering demolition impact fees, saying there were strict criteria and justification needed to implement them. Just needing to raise funds for capital expenditures to keep up with an upward trend in use might not be enough.
Graviet said the future needs of the town’s water system would be in the nature of water storage towers and replacing lines, if demand continues to be as high as it has trended in recent years. Those expenses would be the kinds of things impact fees could help pay for, just as the higher usage demands them.
Other impact fees were slightly lower so far for the year, Connery said, noting that the reduction was possibly insignificant since the fees will continue to be collected through the end of the fiscal year.
Doyle inquired as to the origin of a reduction in town shuttle fees — those charged to developments not serviced by the town trolley in exchange for allowing them to bring their residents to the downtown area en masse. Doyle said the reduction in fees was unexpected considering the increase in population on the town’s west side.
Graviet offered that only five of the previous seven shuttles had renewed their contracts for 2005, with Clearwater and Southampton having discontinued the service.
Among the expenditure notes Connery made was a reduction in overtime pay to town employees. Council Member Tony McClenny, who is the council’s secretary/treasurer as well as the chairman of the Budget and Finance Committee, praised the reduction, noting only one department — the police department — had an increase in overtime pay thus far in the year.
That, Graviet explained, was partially due to additional hours put in by seasonal officers — primarily for weekend training done through the Rehoboth Beach Police Department — though seasonal hours overall had been purposely limited.
Police also put in overtime dealing with a rash of summer burglaries on the town’s south side, he said. And bailiffs have been added to the town’s court system.
Also impacting the police budget are two vacancies. Graviet said the town’s police department offers limited growth potential, since most of the duties involve routine patrols rather than inviting detective work or similar elevated positions.
“We tend to lose more officers,” he said, as a result of officers seeking a wider variety of experiences and opportunities.
In the end, the department is $18,000 overbudget to date for seasonal police wages.
There are also vacancies in the town’s public works department, leading Connery to anticipate as much as $15,000 in regular wages and $25,000 in season wages could be left in the coffers, depending on how quickly those positions are filled.
Parking enforcement wages were expected to be $30,000 underspent, while beach patrol season wages were expected to be underspent by $19,000.
The bottom line: as much as $100,000 underbudget in salary costs for the year, Connery said.
On the negative side of the expenditures column was one unexpected expense: the $20,600 cost of hiring a barge from which the town’s Fourth of July fireworks were shot after beach erosion forced the display’s origin point offshore, due to safety concerns.
Finally, Connery noted a number of minor items — individual lines on the budget sheet — that were likely to exceed budgeted amounts (or that hadn’t been in the budget) but that were not expected to drastically affect department totals for the year:
• Additional costs incurred by contracting for SAD22 computer service for the administration, police, parking and water departments;
• Additional costs for light bars and stop arms for the town trolleys;
• Additional advertising costs for advertising for police department vacancies;
• Costs for police training and travel, with Connery noting that she expected some of the costs would be moved to an accreditation classification and thereby lessen any overage in that budget area;
• Costs for reprinting parking ticket envelopes to reflect credit card payment options, and costs to print more parking permits than had been expected;
• $6,500 to pay for backhoe repair for the street-repair department; and
• Increased costs for fuel for the water department, due to increased gasoline cost, increased driving and what Connery said was a low budget estimate.
McClenny noted an increase in telephone costs pretty much across the board. Graviet explained that was probably due to the use of Blackberry telephone/e-mail/messaging devices, leading to more use of those than had previously been the case with pagers and cell phones. He said the use of the Blackberry devices was a trend for the future and headed the town in the right direction.
Doyle said he expected the devices allowed employees to do their jobs more efficiently. He also asked Graviet for an update on the town’s beach projects, as related to the budget and the need for the town to obtain funding for possible reconstruction or periodic replenishment.
Graviet said he’d noticed high tide had been up to the boardwalk that very morning. However, he allowed that replenishment guru Tony Pratt, of the Delaware Department of Natural Resources and Environmental Control (DNREC), had told him that the beach seemed to be in a rebuilding stage. The town is still awaiting the result of federal budget negotiations to see if federal funds will be allocated for its hoped-for beach reconstruction project.
In related business, Graviet noted that work on the new bandstand was under way, after a delay due to a change from a concrete foundation to wood pilings. That change was expected to cost an additional $60,000.
Doyle also inquired as to the status of the proposed bladder dam to help with flooding in the Loop Canal. Graviet said the plan had essentially been scrapped, due to expected negative impacts on properties on the Assawoman Canal near the Loop Canal.
He said the town’s engineering firm was still looking at some sort of bladder or other type of dam, but would instead be focusing on possibly placing it farther into the Loop Canal, where it would push water overflow into the Salt Pond, which could easily handle the additional load.
If the town were able to make that solution work, it could help to reduce the level of the Loop Canal itself and possibly allow the canal to work as a reservoir to help alleviate flooding on Pennsylvania Avenue. A more extensive solution for that area was also recently scrapped after engineering studies showed it was unlikely to make a significant impact.
Monies for the projects may be reallocated in the near future, Graviet said.
In closing the meeting, committee members praised Connery’s work on the budget and the report.