After months of discussion, the South Bethany Town Council on April 12 quickly passed their 2020-fiscal-year budget. Treasurer Don Boteler said he was proud to announce the $2.463 million balanced budget, which begins on May 1.
This year, the Town also introduced a new financial plan: a 10-year Capital Improvement Plan. Although it’ll be an “evergreen document,” it shows the Town’s priorities, expenses and potential funding sources for major projects, including vehicles; canal dredging; town hall repair and renovations; beach access ramps; bulkhead replacements and more.
“We now understand what we want. We now understand what we’ve got to spend,” said Mayor Tim Saxton. “It is a great achievement.”
The budget items were approved on a 6-0 vote, with Councilman Jerry Masiello absent.
Property taxes and rental tax receipts won’t change under the new budget. Property taxes are $1.30 per $100 of assessed value. Rental taxes are 8 percent of gross rental receipts.
However, the 2020 fee schedule was not finalized. The council wants to reconsider parking-ticket fines (which have not changed in years) and home-improvement permits (for a flat fee, rather than the current fee of a percentage of cost).
For the regular financial reports, the operating budget was balanced at $2,463,287.
Major income is from property taxes ($526,209); rental tax ($550,000); realty transfer taxes ($395,000); building permits ($220,000); and other various permit and license fees ($215,850).
Major expenses include public safety ($717,525); general and administrative ($624,503); beach patrol ($297,525); public works ($266,139); and code enforcement ($100,892).
Recent adjustments to the police department include hiring the Delaware State Police for $91 per hour; Ocean View Police for 1.6 times an individual’s wage, plus $25 for use of the police car; and a new temporary administrator (“consultant”) at $38.50 hourly.
Although those expenses will, for now, take the place of hiring additional fulltime police officers, the town council and the remaining police officers emphasized their desire to focus on hiring a quality chief and officers, rather than continue with shifts of hired help.
Pros and cons
in the savings account
The Town’s reserve fund has good news and bad news.
“As of Feb. 28, we have more than $2.4 million in reserves, which makes me feel so happy,” Chris Keefe of the Budget & Finance Committee had said in budget discussions in late March. However, only $130,000 of that is unassigned, which “frankly, it’s not good.”
Most of the funds were already designated for important future needs, including beach access, road projects, depreciation of capital assets, operational reserves and accrued liabilities, such as accrued sick leave or vacation.
But that $2.4 million isn’t being replenished, and South Bethany now needs to start rebuilding its reserves.
“We’re sort of maxed out on transfer tax, rental [tax] — so the only other revenue stream is property tax,” Mayor Pro-Tem Sue Callaway said, and others agreed.
“I do think you need fund that projects you need funded,” Keefe suggested. “It’s time we started looking at our infrastructure. I mean, we have neglected many, many things over the last few years.
The Town is debt-free, but it has big projects coming down the road.
“We don’t have a short-term problem — we have a long-term problem. The reality is, you know I’m the last guy who wants to raise taxes, but we’re going to have to face it at some point,” said Saxton. “I don’t want to get into the situation where we’re doing a 25 percent tax increase.”
Comparatively low at the time, property taxes in the town doubled around 2009, but have not increased since then.
Perhaps later this summer, the town council hopes to host a more in-depth public discussion of finances, “a conversation like we’re having it right now and open to the public … is very helpful. When people see $2.4 million in reserve, it’s hard for them to comprehend why we need more money,” said Callaway.
The draft budget is posted online, and eventually, the final budget likely will be, too.
Despite three public discussions of the budget before it was finalized, the Town didn’t release the draft budget until the public noticed its absence.
(Coastal Point also submitted two Freedom of Information Act (FOIA) requests for versions of the draft budget, which Town Hall sidestepped, and no draft copy was ever provided.)
In other finance news:
• Daily parking permits can be purchased at town hall’s new outdoor kiosk. But the Town will not hang road signs instructing people to obtain daily permits at town hall, said Town Manager Maureen Hartman. Seasonal permits can now be purchased on the Town website.
• The Town has renegotiated its agreement for Sharp Energy Inc., to supply propane in town, including a tank on Town property.
The original 15-year contract (with two possible renewals) was changed to a five-year contract (with two renewals).
“We looked at the pricing, and it turned out that the people that were using more gas were actually subsidizing those who were using a lot less gas,” said Saxton, so there are two new rates, $1.01 or $1.07, based on a household using more or less than 250 gallons per year. Also, the customer meter charge will not exceed $4.95.
To store its fuel tank in town, Sharp’s lease payment doubled to $5,000 per year. After an incident last winter where the tank went empty, Sharp must also install a central monitor on the tank or pay a fee for an empty tank.