Rehoboth balancing budget on deferred projects, savings

Six months through fiscal year, $1.9 million revenue shortfall looks likely
October 16, 2020

Story Location:
Rehoboth Beach City Hall
229 Rehoboth Avenue
Rehoboth Beach  Delaware  19971
United States

Rehoboth Beach’s budget runs April 1 through March 31. At the outset of COVID-related lockdowns and unknowns, Rehoboth Beach approved a $25.9 million budget March 20 for fiscal year 2021.

Six months through the pandemic, Rehoboth Beach is projecting a $1.9 million revenue shortfall this year. However, through deferred capital projects and expense reductions, city officials are projecting the budget will end the year a little more than $200,000 to the good.

During a commissioner workshop Oct. 5, City Manager Sharon Lynn said a significant majority of the shortfall is related to parking revenue and the city’s new hotel tax. To account for the loss, she said the city is using two sources – deferring roughly $2.77 million of a $5.47 million capital improvement budget, and projected savings in operating expenses of about $485,000.

Lynn said the city is projecting a net savings of approximately $1.35 million. She came to the workshop prepared with five capital improvement projects to spend the savings on – $210,000 on an expansion of the city’s Delaware Avenue restroom, $170,000 on a new street sweeper, $35,000 on improvements to the rain garden on Scarborough Avenue Extended, and $360,000 on water meter replacements and sewer line rehabilitation.

These items are all in the original plan and they’re all needed, said Lynn, adding the $216,000 of net savings is a conservative amount.

The amount for water meters and sewer line rehabilitation is a $100,000 reduction for both projects from the originally budgeted amount.

In an email Oct. 14, City Public Works Director Kevin Williams said last year the city replaced approximately 140 water meters in the North Shores area for $450,000. He said this year, Breezewood, off Old Landing Road, is going to be getting the new meters. He estimated the budget reduction will lead to installation of 30 fewer meters.

Williams said the location for the sewer line rehabilitation still hasn’t been chosen. 

Commissioner Edward Chrzanowski questioned how the five capital improvement projects were picked and why the Delaware Avenue expansion was going ahead of stormwater repairs, a new sewer vacuum truck or fixing a stormwater basin.

Lynn said the deferred projects aren’t going anywhere. Commissioners will see all the capital items again, she said.

Commissioner Jay Lagree said he thought the budget looked good, taking everything into account. Back in May or June, he never would have guessed the city would only be down $1.9 million, he said.

Commissioner Patrick Gossett said the budget projections were a pleasant surprise. 

The city may have lost money in parking, but according to the budget document prepared for the workshop, not all sources of revenue are down. The city is projecting a $400,000 surplus in property transfer tax, and for rental and property taxes to be pretty much on target.

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