Lewes City Manager Ann Marie Townshend says more than $260,000 may need to be pulled from reserves to balance the budget.
Townshend presented the city’s first draft of the fiscal year 2020 budget at a workshop Feb. 12. The budget year runs from April 1 to March 31.
Townshend presented council with a menu of items council could consider to bridge the gap, including a property tax increase. She expects this year’s budget to be about $6 million.
She said for every one cent property taxes are increased, it adds $45,000 in revenue to the city’s coffers. She did not recommend a specific tax increase for residents, and left that up to council if it chooses to go that direction.
Property taxes have not been increased since 2011, when they moved from 49 cents per $100 of assessed value to 57 cents per $100. The previous tax increase was 2009.
Other options include extending the daily parking meter time from 6 p.m. to 8 p.m. both downtown and at the beach parking lots. Adding two hours would generate an estimated $72,000, assuming 25 percent occupancy.
Townshend said council could also consider increasing downtown meters from $1 per hour to $1.50 per hour. That measure would increase revenues by $87,000. Downtown parking meters last increased 25 cents in 2014.
Increasing fines for expired meters from $20 to $25 could generate about $30,000, Townshend said.
Another option would be to increase fees for general contractor licenses, which haven’t been adjusted since 2009. The existing fees are $125 for businesses with fewer than six employees and $300 for contractors with six or more. Townshend said the city could make it a flat fee of $225, which would increase revenue by $16,000. However, council expressed concern over raising fees for small businesses, but lowering them for larger outfits.
Councilman Rob Morgan suggested keeping separate fees and increasing each 20 percent to $150 for smaller companies and $360 for larger contractors. New revenue realized from such an increase could reach about $54,000. Council did not make a final decision on the matter.
Budget reflects growth
The draft budget reflects the continued growth of the area. The city is seeking to add an entry-level planner to work with the full-time planner the city hired two years ago. The city already pays for a part-time planner through a local planning firm, and Townshend said it would be cheaper for the city to add a planner to city staff.
The budget also plans for the hiring of an additional administrative assistant to help with the growing workload of the existing administrative assistant.
The budget anticipates 1 percent raises for non-police employees and a 10 percent increase in health insurance, which will be determined by the state later this spring.
Morgan thanked city staff for providing options for raising more revenue, but asked that they also consider cuts to expenses.
“I don’t see anything about cost savings,” he said. “Where the money is in the expense budget is in personnel. We have to think hard about personnel because I think we’d have to justify strongly any tax increase.”
He also singled out a growing police budget, saying the department needs to justify some of its expenses.
“We’ve heard that we can’t possibly go below having two officers on the streets at all times, but other municipalities do it,” he said. “We heard last year that we need all these pursuit vehicles, but to pursue whom?”
Townshend said some of the deficit has already been trimmed based on council’s conversations Feb. 12, and further cuts could happen as council digs deeper into the budget. She also pointed out that several items were left out of the budget, including the hiring of another building official/code enforcement officer and a new human resources manager. Staff also left out several capital projects proposed by the parks and recreation commission.
Council will meet at 1:30 p.m., Friday, Feb. 15, to continue work on the budget. Discussions are expected to center on the streets department, the building official department, the planning and development office, and the city manager’s office. The police budget is expected to be the topic of the Thursday, Feb. 21 meeting. Council will also meet Tuesday, Feb. 26 at 9 a.m., Monday, March 4 at 1:30 p.m. and Thursday, March 14 at 1:30 p.m.