Bethany continues record of laudable audits

It won’t come as a surprise to many who keep an eye on Bethany Beach’s finances, but the town yet again this year earned positive marks from its auditing firm, Trice, Geary & Myers. Members of the town’s Audit Committee met in recent weeks to review the audit report for the 2008 fiscal year and they presented their report to town council members at the council’s Oct. 17 meeting.

Audit Committee Chairman Don Doyle emphasized last Friday that the town had received “the best rating we can get from them.”

“The town should be very gratified that we continue to get this clean audit report from the outside auditors,” he said. “They continually compliment our finance officer, Janet Connery, who’s just an outstanding accountant.”

Doyle also offered compliments to Town Manager Cliff Graviet and the overall environment created by the town for its accounting.

For the 2008 fiscal year, the town’s audit shifted to new accounting standards that focus more extensively on risk-management oversight. The Audit Committee had previously put their own focus on that issue, recommending several years ago that the town institute internal audit controls that eventually led to a part-time internal auditor position for resident and retired CPA Phil Rossi.

Rossi has since found no major problems with the town’s financial systems, though he has recommended some minor tweaks, including recent recommendations to separate the processes of billing fees for the building inspector’s office and collecting those fees, and computerization of some of the processes in that office.

Doyle said those processes were already computerized and that Connery had access to them from her computer terminal but that committee members felt the change “would make John’s (Eckrich) records a little more accessible. It helps keep everyone honest.”

An internal audit review earlier this year did uncover fraudulent filings by one Bethany police officer related to overtime and related medical expenses. The officer was placed on leave and has since resigned and pleaded guilty to a criminal charge in the case.

The Audit Committee is now planning to meet on a quarterly basis, rather than simply around the time of the annual audit, in part to continue oversight of Rossi’s work as an internal auditor.

Doyle said that three reports presented to them on areas of the town’s financial structure had been good news.

“Everything seems to be in good shape,” he said.

Beach shuttle fees recommended for increase

On the subject of finances, new council Secretary/Treasurer and Chairman of the Budget & Finance Committee Jack Gordon reported to the council on Oct. 17 on recommendations from that committee’s most recent meeting.

Among them: an increase in the fees the town charges to out-of-town shuttle buses that drop off beach-goers inside town limits. Gordon noted that state officials had recently increased the rate charged to buses dropping off passengers at Fenwick Island State Park – an increase from $6,000 per season per bus being used to $8,000 per season per bus.

The increased rate, which was listed in a new contract between DNREC and the Bayside community, well eclipses the rate Bethany currently charges to outside communities – as did the former rate. Bethany has been charging only $3,000 per bus per season.

With that disparity noted, Budget & Finance Committee members recommended that the town start charging $6,000 per bus per season for shuttles that can carry 11 or more people, while those carrying 10 or fewer people will continue to pay just $3,000 per season.

Gordon noted that the costs associated with the safe operation of the town’s public beach have continued to increase in recent years and that the town had previously chosen to increase parking rates on that basis.

The council did not take action on the recommendation last Friday but could do so in time for the 2009 summer season.

Gordon also reported on Oct. 17 that the committee’s review of the 2009 fiscal year thus far had shown town finances tracking well for the first six months. Noting the global financial crisis, he emphasized that the town’s bank accounts and investments are safe.

He also noted that prior borrowing by the town’s fiscally independent water company is due to be paid off soon with money from the associated sinking fund. If future needs for the borrowing of funds for the water company are not identified, Gordon said, water company customers are likely to see a reduction in the sinking fund fee on their quarterly water bills.

Gordon, in making the town’s monthly financial report, noted that 73.8 percent of budgeted revenue had been collected since the start of the fiscal year on April 1, compared to 68.4 percent at the same point in the prior year. That increase, he said, was due in part to a “better-than-budgeted revenue from real estate transfer tax so far” this year.

The town’s expenditures are running at roughly the same pace as in 2007, at 52.8 percent of budget, compared to 52.3 percent in 2007. Its revenue continues to exceed its expenditures.

Committee guidelines updated, appointments made

Council members adopted some updated guidelines for town committees on Oct. 17, under a required annual review.

Mayor Tony McClenny recommended the council change membership requirements for the Audit Committee to exclude council members from membership, owing to a potential conflict of interest. The recommendation came from the Audit Committee itself and was adopted on a 5-2 vote, with council members Joseph Healy and J. Robert “Bob” Parsons in opposition.

McClenny further recommended that the council require that no changes be made to minutes of town meetings unless those changes were supported by official recordings of the meetings themselves or by a majority vote of the council. He said he felt the minutes “should not be used to express the personal opinions of council members.”

“I know of a couple of examples where individual council members have written their own minutes or gone to the town clerk and said, ‘That was not what I said,’ or ‘That was not what I meant,’ and had the minutes changed,” McClenny said. “And I don’t feel that is appropriate.

Graviet said town staff, for their part, were hoping to record official minutes based on the “factual record only.”

The motion was adopted on a unanimous vote.

Other minor housekeeping changes adopted unanimously on Oct. 17 included correction of erroneous information regarding Planning Commission appointments and term starting dates, and to clarify that some committees are formed for a specific purposes (i.e. the Board of Adjustments and Planning Commission), while others serve in an advisory role to the council.

The council also clarified an existing rule limiting committees to nine members. Communications Committee Chairman Tracy Mulligan had requested 10 members to serve on that committee this term, though some of those members are non-voting ex-officio members.

While Councilman Lew Killmer said he was concerned that allowing more than nine committee members might prove unwieldy for a committee, McClenny said he believed that the nine-member limit had always been intended only to apply to voting members. The council was in agreement on that issue and voted unanimously to cement that understanding in the committee rules.

McClenny on Oct. 17 also made appointments for committee membership for the coming year based on recommendations from the committee chairpersons.

The single bone of contention in the appointments was the rejected offer by Mulligan to serve on the Budget & Finance Committee this year.

While Mulligan said he could accept that rejection since he can still attend the committee’s meetings as a citizen, he said, “What I have more difficulty accepting is the current committee guidelines, which I feel – perhaps inadvertently – allow single individuals to exclude certain people.

Mulligan recommended that the council amend its committee rules to require that the council confirm both a list of recommended committee members and a full list of those rejected from service when making committee appointments each October.

“I’m not advocating that anyone who offers automatically be included on a committee,” he said. “There are legitimate reasons why someone would be rejected. … But this would be consistent with the council’s statements about valuing public participation. And I’m confident that any discomfort with any member appointed by the council would be compensated for by the overall participation.”

Council members did not take up Mulligan’s recommendation but were divided on the final vote for the sum of the committee appointments – apparently due to Mulligan’s exclusion from the Budget & Finance Committee. The appointments were adopted on a narrow 4-3 vote, with Healy, Parsons and Councilwoman Margaret Bogan Young dissenting.

Along with the committee appointments, the council also made new appointments to the Board of Adjustments, implementing a rotating schedule with the one-year reappointment of Thomas Mahler and two-year reappointment of Parsons. Robert Graham will continue to serve as the board’s third member – a position guaranteed to the chairman of the town’s inactive zoning commission.

Council members noted that if the zoning commission is merged with the Planning Commission, as some have recommended, a third citizen appointment would need to be made, with Graham eligible to take that appointment.

Also at the Oct. 17 meeting:

• Graviet reported that the town’s annual street repair work was nearly complete. Within two weeks of that completion, he said, work to restore sidewalks and driveways disturbed in the work is also expected to be complete.

• Recent work on pedestrian and bicycle improvements in the area of Gibson and Maryland avenues also produced “significant stormwater improvements,” Graviet said, with work done alongside the new path there.

• Graviet noted continued problems with beach access after the most recent coastal storm that damaged dune crossovers. He said it is possible that state officials may wait until a planned additional winter replenishment to make anticipated repairs to the dunes and crossovers.

• The town has signed off on a development agreement related to providing water to the new shopping center near Salt Pond, as required under its water agreement for the parcel. The development of the project, with its Harris Teeter grocery store, CVS pharmacy, bank and possibly other stores, was designated as meeting town financial and engineering requirements.

• Graviet reported that the final days of the bidding process for the town’s summer beach umbrella concession were looming. Meanwhile, bids are also being anticipated on the proposed boardwalk widening project. They are due to be opened on Oct. 29.

• Parsons made a clarification to previous discussion of the town’s regulations regarding renewable energy sources, agreeing that while related state tax credits are not due, after all, to expire this December, federal tax credits for such projects are due to expire in December and are not guaranteed for renewal. He again urged the council and Planning Commission to make accommodations for residential wind turbines before the end of the year.

“If our citizens are going to get the two grand back from the feds, now is the time to do it,” he said.