Despite legal woes, Dewey budget shows surplus

Even with $400,000 in unanticipated lawsuit fees and administrative costs, seven months through its fiscal year, Dewey Beach financials show a $200,000 surplus.

Tasked by council to create next year’s budget, the recently revived budget and finance committee began that process Nov. 27 with a thorough examination of the budget.

Dewey’s fiscal budget runs April through March, and as of the end of October, lawsuit legal fees are $370,000 over budget. Other administrative costs, the line item where former Town Manager Marc Appelbaum’s $100,000 buyout has been placed, are $115,000 over budget.

Committee Chair Dave Davis said, at this point, he doesn’t think the lawsuit legal fees are going to subside anytime soon, and next year’s budget should reflect that.

Keeping the town’s budget in the black are transfer taxes, building permits and below-the-line revenue.

Coming in at $548,000, transfer taxes are $200,000 over expected revenue.

Mayor TJ Redefer, a realtor by profession, was in attendance, and he cautioned the committee to not expect those returns next year, because, he said, the state’s decision to increase the transfer tax from 3 percent to 4 percent during the past legislative session will have a negative impact on Dewey. Defined as under $500,000, Redefer said the 1 percent increase will slow sales in the low-end market, and a significant portion of the for-sale housing stock in Dewey falls under that line.

Redefer was more positive about the $166,000 in additional building permit revenue. He said he expected that number to continue to be strong because of renovations to beach cottages in the north end of town.

Below-the-line revenue – Dewey’s accounting for unbudgeted, one-time costs and revenues – is $320,000 to the good. A $245,000 payment from Dewey Beach Enterprises, redevelopers of Lighthouse Cove, accounts for more than two-thirds of this revenue.

Davis said the committee’s goal is to have a budget prepared for town council by the end of February.

Come March, while council is considering the committee’s proposed budget, the committee will begin developing a 10-year finance plan – council’s second task. Davis said the plan is expected to keep in line with the town’s 2017 comprehensive plan, currently in the hands of council, and he said he anticipated a fall completion.

The committee tentatively scheduled meetings for Friday, Dec. 15, Friday, Jan. 12, and Friday, Jan. 26.