South Bethany Town Council has held two teleconference meetings in the past month to finalize and approve the town budget for Fiscal Year 2021, which begins on May 1.
After months of working on the draft budget, they decided not to make major changes this late in the game.
They took treasurer Don Boteler’s advice to “simply approve the budget we have now, fully acknowledging we have so many uncertainties — most likely we will have some kind of deficit … rather than guessing which revenues may fall short.”
In a 10-minute meeting on April 3, they also unanimously opted to keep the same property tax rate of $1.30 per hundred dollars of assessed valuation, and a rental tax rate of 8 percent of total gross receipts.
The operating budget is $2.53 million, which is 3 percent increase of the current budget.
“It is balanced, although we probably all recognize that given the unusual circumstances in the world right now, we will probably end the year at a deficit,” said Boteler.
For now, people will probably slow down on requesting permits, purchasing second homes or renting vacation homes. Town council will keep a close eye over the next quarter to see how this impacts the town revenues.
“If we have deficit, we have sufficient reserves to cover that deficit, and we have the luxury of time to determine which of those reserves [to pull from],” Boteler said.
This April, committees are allowed to continue spending the rest of their money that was budgeted for the current fiscal year. After all, that money was already set aside.
“We are fine right now in this budget year,” said Town Manager Maureen Hartman.
However, the Town Hall staff have also outlined plans to operate in austerity and freeze any unnecessary spending for the time being.
“Guys, we’re gonna have to make decisions on the fly next year and that’s okay, because that’s” what they’re elected to do, said Mayor Tim Saxton.
South Bethany has reserves, also. The operating reserve will keep the town running for several months in an emergency, and town council could also pull from other accounts if absolutely needed (accounts intended for other important priorities, like canal dredging or cleanup).
The town has not stopped construction on the three new beach walkways.
“We shouldn’t be so austere that we stop work in process,” Boteler said.
There had been some preliminary discussion this winter about potentially raising taxes by a few cents a year (for example, a five-cents increase would only result in a tax increase of $10 to $56 per household. Even the major tax increase from 2009 to 2010 was an impact of the low-hundreds.).
However, as the pandemic ramped up, the council ultimately abandoned this discussion. The conversation is important, though, because the town can’t always rely on rental or real estate taxes — fickle sources of income during a financial recession. With a gradual property tax increase, they hope to avoid the town ever falling into such dire financial straits that they would have to double the tax rate.
Neither meeting on March 26 or April 3 had any additional listeners from the general public. There were no public comments.
Delaware is currently trying to slow the spread of coronavirus (COVID-19), which currently has no specific vaccination, but can be especially harmful to the older population, or all ages who are immunocompromised.
South Bethany has closed all buildings to the public, although staff continue to work daily by phone and email. The Town posts regular updates from the governor on its website.
“We will try to get out additional information on resources that the owners of the town can utilize as well … our town manager and her team and our chief of police and his team have done an excellent job of keep thing this town running through this crisis and ensuring normal services are provided,” said Saxton, and the council echoed their support of the town staff during this time.