Dewey Beach leaders optimistic about budget

Transfer tax to generate $240,000 windfall
October 16, 2020

Dewey Beach commissioners expressed cautious optimism about COVID-19’s financial impact on the town budget during their regular monthly meeting Oct. 9.

September’s actual revenues of $276,000 fell $39,000 short of the $315,000 expected revenues, interim Town Manager Jim Dedes said, but part of the problem involved the timing of the transfer tax coming in.

With 22 or 23 homes sold in September, Dedes said, the town will see a windfall of $240,000 in transfer tax reported next month; he said he expects building permit revenue to go up as well. 

Accounting Clerk Sheena Gossett said transfer tax recoupment is delayed because the county, instead of Fulton Bank, now processes the tax. The county has until the 14th day of the following month to process taxes and seven days after that to present funds to the town, Gossett said.

“This puts us at our transfer tax budget for the year, so everything else is icing on the cake,” said Gossett, adding that an additional $70,000 in parking revenue is also expected to show on the budget next month.

Commissioner Paul Bauer said that was news to put a smile on everyone’s faces.

At $317,000, September’s expected expenses are $30,000 under the $347,000 in actual expenses, but the total did include COVID-19 cleaning costs and a stormwater management project, Dedes said. 

Commissioner Gary Persinger said the season started slow but seemed to have ended strong. There’s still a ways to go, he said, but he’s seeing some good performance.

“I’m certainly more optimistic than I have been in recent months,” Persinger said.

He said the town still needs to exceed projected transfer tax totals by 40 percent to balance the budget. Parking revenues generated more than expected, he said, although parking fines are down considerably.

Commissioner David Jasinski said council will have a better understanding of the budget when accommodations taxes are reflected next month.

Commissioner Bill Stevens said the budget was not as dire as originally feared. He said two budget line items should be moved: The Bayard loan repayment should be moved from profit and loss to the bottom line, and equipment asset purchase should be a balance sheet item.

“If those truly are asset purchase and loan payments, then the bottom line is $150,000 better than what we’re seeing right now,” Stevens said.

Gossett said Luff & Associates, the town accounting firm, has been asked before to make the changes but would not, stating they are expenses that have to be realized in the year.

Persinger said he had been complaining about the same issues for a long time.

“If there's any help you can provide in getting those things changed and getting a better reporting system, we would all appreciate that,” Persinger said to Stevens, who said he would do what he could.

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