Rehoboth set to approve $21 million budget

The Rehoboth Beach commissioners are close to approving a $21 million budget for the 2018-19 fiscal year, a decrease of $2 million from last year.

The city expects to raise $272,000 in revenue by increasing all parking permit fees except seasonal and scooter permits.

The changes range from a $5 increase for weekend daily and weekday daily permits to a $20 increase for weekly permits, from $60 to $80. The largest changes overall are for Deauville Beach seasonal permits, from $75 to $250; bus permits that allow a bus to park in the City Hall parking lot from morning to midnight go from $50 to $250; and permits for rental properties go from $30 to $100 per bedroom.

Currently, each property owner in Rehoboth receives two free transferable parking permits, a $500 value. Those with a rental license can purchase additional permits at $30 per bedroom, which is set to increase to $100 per bedroom.

Commissioner Patrick Gossett said, “I think this is a good starting place for additional revenue.”

Commissioner Lisa Schlosser questioned the increase for rental properties, saying she thinks the $70 increase per bedroom is too high after the city just increased its rental tax from 3 percent to 6 percent.

“All the sudden these people get another fee with zero notice. They’ve already sent out most of their lease agreements for the year, and now we’re going to add another fee on top of that. I don’t think we’re giving those who rent their property ample notice,” she said. “It doesn’t seem fair to me.”

Mayor Paul Kuhns said he hoped the new rate could help get some cars off the street.

“Maybe now some of these people will come down with three cars instead of six,” he said.

Commissioner Patrick Gossett said the $60,000 raised by the increase could help provide a 1 percent salary increase for city employees.

The city will be putting some of that extra revenue back into its capital improvement budget, including sidewalk improvements on Second Street, estimated at $113,000, and $53,000 reserved to restore Lake Gerar. City contractor Envirotech has proposed cleaning up Lake Gerar, removing sediment and overgrown vegetation.

While the scope and cost of the work is not yet finalized and Delaware Department of Natural Resources and Environmental Control is reviewing the proposal, the commissioners decided to keep the project in the budget so it could get get underway during the fiscal year.

Not in the budget for this year is a $15,000 proposal by the Country Club Estates Homeowners Association to erect a pavilion in Silver Lake Park. Commissioner Toni Sharp questioned why the city could find $50,000 to fund Rehoboth Beach Main Street but not for a pavilion in the park. Commissioner Jay Lagree also supported the pavilion proposal.

“I think we should find this $15,000 somewhere,” Lagree said.

“The idea needs to be vetted and we need to have a plan,” Mayor Paul Kuhns said. “It’s a nice idea.”

He said the commissioners could spend the spring and summer coming up with a plan to have ready for next year’s budget.

This year’s budget calls for $80,000 to hire a public works director. City Manager Sharon Lynn said she would like to hire a person with an engineering background who would help manage and direct city projects conducted by the streets, water, wastewater, and building and licensing departments. Lynn said this position could save money on consultants. While the commissioners questioned whether they should be involved in the process, in the end, they agreed to let Lynn handle hiring. The city is now advertising for the position on its website.

The budget includes $1.1 million in projected parking meter revenue, $1.3 million in property tax revenue, $1.4 million in transfer tax revenue and $2 million in rental tax revenue. While the city projects to take in $1.7 million in transfer tax revenue, city officials have generally been very conservative in their projections over the last 10 years. The rental tax revenue is projected to increase by $1 million after the city raised the rental tax rate.

The proposed budget shows the city will spend $2 million for city administration, $3 million for the streets department and $2.8 million on the police department. The police department budget is projected to increase as the city is in negotiations with the Teamsters Union on a new contract. It has generally been city policy to give raises to the rest of the city employees as well. While it is not reflected in the budget currently, the city is expected to give employees an average raise of 1 percent over the current year’s budget.

While no date has been set, it is expected the commissioners could approve the budget at their Friday, March 16 regular meeting. The budget must be in place and approved before Sunday, April 1.