This time last year, Rehoboth Beach commissioners approved a budget for the current fiscal year that broke the $30 million mark for the first time in city history.

Due in large part to a capital improvement budget that’s about $4 million more than last year, commissioners approved a budget for the upcoming fiscal year that’s nearly 20 percent larger. 

This is a big budget, but there’s not a lot of frivolity, said Mayor Stan Mills during a meeting March 17. The budget is getting bigger and bigger, but the city’s needs are getting bigger, he said.

Rehoboth’s budget year runs April 1 through March 31. As adopted, the budget for next year will be $35.7 million, which includes more than $10 million in capital improvement projects, and maintains current tax and utility rates. The city has estimated nearly $8 million in parking-related revenue, $2.83 million in sewer services, $3.8 million in water services, $1.2 million in transfer taxes, $2.9 million in rental taxes, about $1.5 million in hotel taxes, $2.04 million in property taxes, and $1.25 million in building permits and appeals.

The approval of the budget was a formality – city commissioners and staff conducted a number of hours-long meetings in the months prior – and there was little discussion before it was adopted.

Commissioner Jay Lagree expressed some concern about a budget that’s balanced using roughly $1.2 million in excess revenue from the water fund to make up for deficits in the general and wastewater funds.

Following the meeting, in response to Lagree’s comments, Finance Director Burt Dukes said the general fund should not operate in a deficit from year to year. However, he said, for next year’s budget, capital outlays were primarily responsible for expenditures exceeding revenue.

Dukes said over the past decade, the city has made a conscious effort to narrow differences between revenues and expenditures in the general fund. Examples include the hotel accommodation tax, a 50% increase in the property tax rate, and a 100% increase in the residential rental tax, he said.

Three months into his job, City Manager Laurence Christian said he’s confident staff will address the opportunities and challenges provided in next year’s budget. The city is well-positioned to handle the responsibilities that come with a $35 million budget, he said.

Time and time again, city commissioners brought up enforcement of city code as an issue.

Christian said he’s clearly heard the concerns related to this issue.

“Again, I have confidence that our team can effectively address these concerns,” said Christian.

Budget priorities and numbers

There’s a lot to the city’s budget.

• City staff will receive a 3% cost-of-living increase

• Two new staff positions: an administrative assistant in the building and licensing department and administrative assistant to the city secretary

• A compensation and classification study

• Development of a stormwater management plan

• Update of the city’s website and implementation of community engagement software

• $2.4 million for the design and phase one construction of Baltimore Avenue restrooms/beach patrol headquarters

• $505,000 for streets repaving

• $383,000 for LED retrofit of lights in the Rehoboth Avenue median

• $170,000 for a trash truck

• $2.5 million for State Road pump station reconstruction

• $150,000 for a traffic and parking study during the summer season.

Other capital items include new equipment for the bandstand, continued inspection and cleaning of sanitary sewers, water main replacement on Laurel Street, security cameras, and fence replacement at Grove Park.

Commissioners Gossett, Markert named to library task force

Included as part of the budget are four donations to city organizations – $150,000 to the Rehoboth Beach Volunteer Fire Company, $60,000 to Rehoboth Beach Main Street, $30,000 to the Rehoboth Beach Museum and $75,000 to the Rehoboth Beach Public Library.

While all the donation requests were evaluated by city commissioners, it was the library’s that drew the most scrutiny after library representatives announced midway through the budgeting process that they were in the beginning stages of moving its main location outside city limits. Throughout the process, they have said the library will maintain a smaller location downtown.

As a result of the library’s pending move, city commissioners placed a few conditions on their donation, including a stipulation that the money can only be used for the facility’s day-to-day operations, a task force must be formed and a commissioner liaison be assigned.

Library officials agreed to those terms, and after volunteering, Commissioners Patrick Gossett and Francis ‘Bunky’ Markert were assigned as the commission’s library liaisons.

Gossett’s appointment was voted on first and Lagree voted no, but it was a vote against the task force, not Gossett specifically. Lagree said he thought the city should create its own task force separate from the library’s, because the library is about to undertake a huge project and he thought they could be overwhelmed. Aspirations are great, but they can change in a moment when there’s no more money, he said.