Two weeks ago, Rehoboth Beach City Manager Taylour Tedder told members of the Rehoboth Beach-Dewey Beach Chamber of Commerce that parking revenue this summer exceeded the projected amounts budgeted for the fiscal year that began April 1.

There were more transactions and everything went better than expected, he said to the chamber members Sept. 10.

The city’s finance director told commissioners during a meeting Sept. 20 that parking revenue is expected to fall short of the projected budget.

It will be down a minimum of $200,000, and it could be more than that, said City Finance Director Burt Dukes.

The revenue side of Rehoboth Beach’s budget includes at least a dozen parking-related sources – meters, permits, lot rentals, fines, etc. In this year’s budget, which began April 1, the city budgeted about $10.9 million between those sources. That number includes increases to parking fees across the board, most notably meters going from $3 to $4 per hour and parking permits increasing 30%.

Dukes’ comment came during the city manager’s report portion of the meeting. Commissioner Craig Thier asked about parking revenue. Tedder said Dukes and Assistant City Manager Evan Miller had prepared some information in anticipation of the question. Following Dukes’ update, there wasn’t any further discussion on the topic.

Immediately following the meeting, when asked for further explanation, Tedder said he and Dukes were using different sets of numbers, that Dukes was “guessing” and that he would respond to emailed questions. Tedder was out of the office Sept. 23, but Miller responded to the questions.

Miller said Tedder had been using point-in-time from a previous month using total number of transactions this year to last year. The number appeared to be similar when Tedder reported his information, but overall transactions are actually down slightly, he said, adding that cool weather in September may have been a contributing factor.

He said parking revenue is a volatile revenue stream, so the city budgets conservatively.

It appears a decline in parking permit sales is the main culprit in falling short.

According to the city’s budget report prepared in advance of the meeting, for the months of April through July, parking permit sales were $1.16 million this summer, which is an increase of $25,000 from the prior year. However, the report continues, parking permit sales were 89% of the FY25 budget as compared to 97% in the prior year, which implies that actual revenue in the current year may be close to or slightly below budget.

Overall, the city’s $38.6 million budget appears to be in good shape. When compared to the same four-month snapshot from last year, the hotel accommodations tax is slightly higher, a property tax increase generated more than $600,000 in additional revenue, and the transfer tax is up nearly $300,000.

The report said it was too early to project revenue from the rental tax and mercantile fees because the former won’t be collected until early 2025 and the latter won’t be collected until December. 

As for expenses, the report said general fund expenditures, including operating, debt service and capital outlays, are 32.9% of total expenditure budget versus 32.8% over the same period last year. This consistent trend implies that the actual expenditures are within the annual budget parameters for FY25, said the report.