Dewey Beach commissioners unanimously approved a $3.8 million budget March 12 for the 2022 fiscal year, which includes a 3 percent raise for employees and a new capital improvement fund seeded with lodging tax income.
The budget, which runs from April 1 to March 31, shows $3.81 million in revenue and $3.78 million in spending, with a net income just over $24,000.
Town Manager Bill Zolper first presented a draft budget with a 4 percent raise for employees. Zolper said he agreed with a 3 percent raise, which he said was the median now among other municipalities. The difference between 3 and 4 percent is about $12,000, Zolper said.
Budget and finance committee Chair Dave Davis said the committee recommended 4 percent because members had heard employees were underpaid compared to those in other towns; he said members chose to err on the side of caution and keep the increase on the high side.
Mayor Dale Cooke said the town has given higher-than-average increases in past years, and 4 percent is too high. He said each year he asks how raise amounts are decided.
“Last year I asked the exact same question of why they came to the conclusion of 4 percent, and it was only because, again this year, someone suggested it, not because there was a logic behind it. That's my opinion,” Cooke said.
Commissioner Bill Stevens said he could support a 4 percent raise, but the town needs a market analysis and a formalized, structured compensation plan.
Zolper said he agreed and hopes within the next six months to work on a pay scale for town hall employees; he said he does have data showing police officers are underpaid compared to those in other towns, based on a pay increase commissioners approved in 2019.
With no property tax, Commissioner Gary Persinger said, Dewey doesn’t have a revenue source to match other towns, and the town needs a system for raises based on performance.
“You muddle exemplary performance with very average performance and everyone gets the same percent,” Persinger said. “That makes no sense to me. We need a better way of people being able to understand how they can move up the pay scale and how they might be rewarded for really exemplary performance.”
He said he was disappointed the budget didn’t set aside income from the recently implemented lodging tax in some way, and said he would like to reserve a portion of the income into a new capital expenditure fund.
Commissioner Paul Bauer said employees deserve the 4 percent raises suggested by the budget and finance committee. Expenses were kept low this year while revenue due to transfer tax grew, he said.
Commissioner David Jasinski said 3 percent raises still exceed the inflation rate.
“The real issue is we need to direct that our town manager benchmark key staff salaries against other localities to really identify where we've got more significant pay problems, and when we look at next year’s raises, we try to allocate more money to those positions where there's a comparable pay issue,” he said.
Jasinksi then motioned to approve the budget with a 3 percent raise for town employees and to put $60,000 of the lodging tax income into a capital improvement fund; Persinger seconded.
Income from the lodging tax is uncertain in its first year, Jasinski said, but $60,000 would seed the capital improvement fund, and allocation amounts can be increased in the future. The budget will be balanced with net income remaining, he said. Lodging tax income is projected to be $100,000 for the 2020 fiscal year.
Stevens said he would support a 3 percent raise until a compensation plan is completed. He said he preferred a percentage, rather than a dollar amount, of lodging tax income to go into a capital improvement fund.
Jasinski said that was a good idea and amended his motion so that 50 percent of the lodging tax would go into the capital improvement fund; Persinger accepted the amendment.
“Even a small seed is better than no seed at all,” Persinger said.