Record-high $27.7 million budget passed in Rehoboth

Rehoboth Beach was incorporated March 19, 1881. On the city’s birthday 140 years later, commissioners unanimously approved a record-high $27.7 million budget for its 141st year.

Rehoboth’s fiscal year runs April 1 to March 31. During a March 19 meeting, City Manager Sharon Lynn presented commissioners the final version of a balanced budget for Fiscal Year 2022. The budget includes a 2 percent raise for city employees, but there are no increases in fees or taxes.

Mayor Stan Mills said a growing budget is always of some concern, but the city is run efficiently with watchful staff who are prepared to make adjustments when necessary. The city has been fortunate to be able to maintain services and perform necessary projects while maintaining low property taxes, he said, in an email after the meeting.

Included in the operating budget are expenses of $2.4 million for city administration, $2.3 million for the water department, $4.7 million for the wastewater department, $1.3 million to operate the parking department, and $1.8 million in debt service.

The operating budget also includes $3.1 million for the police department. That amount does not include $660,000 for the beach patrol, which has been placed under police control.

The budget calls for $2.04 million in real estate tax revenue, $1.6 million in transfer tax revenue, $2 million in rental tax revenue and $1 million in hotel accommodation tax. 

The capital budget is $4.7 million. Capital items include, but are not limited to, street paving for $450,000, Delaware Avenue restroom expansion of $430,000, Lake Gerar Tot Lot enhancements of $275,000, replacement of a trash truck for $125,000, the third and final installment of parking meters for $218,000, a new sewer vacuum truck for $420,000, replacement of a section of water meters in the city’s distribution area for $500,000, and alterations to the front deck of city hall for $87,000.

There was little discussion on next year’s budget during the recent meeting, because commissioners hashed out the details at five previous budget meetings. Instead, commissioners and staff reflected on the city’s good fortunes over the past year and were optimistic about the year ahead. Despite a $2 million loss in parking revenue, city staff are projecting a balanced budget for the current fiscal year, due in large part to a multimillion-dollar surplus in transfer tax revenue.

Lynn said the city was in good shape, which was reason to be cautiously optimistic.

Commissioner Edward Chrzanowski said the city survived on good luck and the hard work of city staff. The sacrifices made have given Rehoboth the opportunity to be optimistic about the coming year, he said.

In his email, Mills said he anticipates the summer season will open up considerably, and he expects parking revenue to increase.

Last year, when the budget was passed at the height of COVID-19 unknowns, the city created a list of capital improvement items that would be deferred if revenue wasn't coming in as expected.

Mills said this year’s budget does not have a similar list, but Lynn regularly scrutinizes the budget to ensure revenue is appropriately tied into expenses.

Editor’s note: The story has been updated to reflect the correct birthday number.