A few weeks ago, Rehoboth Beach commissioners learned from Rehoboth Beach Main Street representatives that after four summers the million-dollar Grove Park canal dock is still seeing little use.

Now, during a budget meeting Jan. 17, commissioners learned the ground between the Rehoboth Beach Museum and the canal dock’s retaining wall to the west is settling, which in turn has produced cracks in and around the dock’s retaining wall.

City Manager Taylour Tedder said he has closed the dock indefinitely until the city figures out the best path forward. Included in next year’s proposed $43.9 million budget is $400,000 to fix the situation.

The issue was brought up Jan. 17 in the context of next year’s proposed capital improvement budget of $11.6 million. Public Works Director Henry Matlosz said the issue was brought to the city’s attention when officials from the museum called to say a crack had developed in one of the bathrooms of the city-owned building. Upon inspection, he said, the retaining wall is no longer plum and the soil has settled up to a quarter of an inch in two areas.

Matlosz said the proposed $400,000 fix includes riprap to stabilize the shoreline and the possible addition of pilings. He said it won’t be an easy job, but there is critical infrastructure in the immediate area, referencing a 16-inch water main and the outfall pipe that runs under the bike trail that’s parallel to the canal.

None of the commissioners were happy with the news.

Mayor Stan Mills said he was concerned about putting more money into the dock and not actually fixing the situation. It’s a very steep slope, he said.

Commissioner Suzanne Goode said she knew something like this was going to happen and that it’s not the end of the costs. It’s time for the city to cut its losses and consider removing it, she said.

Goode said she was in favor of the city replanting the trees that had been stabilizing the canal bank prior to being removed for the dock.

Commissioner Mark Saunders said he thought the dock was a useless liability.

Matlosz said the city will reevaluate the area to see if there was any more shifting once all the snow and ice have melted.

Ultimately, commissioners tasked Tedder with figuring out how much it would take to remove the dock.

The canal dock was first proposed well over a decade ago by the Lewes-Rehoboth Canal Improvement Association. Discussions stalled for years, but were reignited in 2018, and the dock was ready for use in May 2021. The LRCIA raised about $1 million for the project, but has since disbanded. Rehoboth Beach contributed nearly $300,000 and also took over control of the project once construction began in April 2020. There had been plans for an observational deck and a kayak launch, but both were ultimately scrapped because of cost overruns.

Budget proposed for FY26

The Jan. 17 meeting was the first of the city’s budget process for fiscal year 2026, which begins April 1. As proposed, the budget calls for about $43.9 million in revenues and $43.7 million in expenses, which represents about a 14% increase over the current year’s $38.6 million budget.

Tedder said a majority of the increase in revenue and expenses is related to a loan that’s being put toward the completion of the beach patrol project. A few months ago, in an effort to free up cash in the current fiscal year, commissioners agreed to finance up to $5.5 million of construction costs. Tedder said the remaining portion of the loan is being used this year.

As presented, the general fund would see about $28.8 million in revenues, with $28.6 million in expenses; the enterprise funds – water and wastewater – would have about $14.9 million in revenue and $15 million in expenses; and the capital improvement budget is about $11.6 million.

Tedder said revenues include expected increases in the amount of transfer taxes ($450,000), parking revenue ($350,000) and building permits ($900,000). He said revenues are expected to remain flat in property, rental, hotel accommodations taxes.

As proposed, salaries would increase by $1.6 million over the current fiscal year to $9.53 million. This includes the hiring of an in-house attorney and planner to reduce contracted services, a 3% cost-of-living adjustment and up to a 3% merit increase for eligible employees. Medical insurance increased by $175,000, a significant portion of which – about $140,000 – is due to funding 100% of employee health insurance. Currently, it’s a 90/10 split for employees and a 80/20 split for dependents. There is no recommended change for dependents.

The budget includes an increase in expenses related to a new three-year contract with the police union, which has been tentatively agreed upon. Overall, the police budget would increase by $1.36 million, which includes a $623,000 increase in salaries, $278,000 to implement a take-home vehicle program and $126,000 in maintenance contracts.

In addition to the $400,000 to fix the canal dock retaining wall, the capital improvement budget includes $2.5 million for the beach patrol project; $585,000 for the annual street paving program; $257,000 for a new hook hoist container truck; $2.4 million for Phase 3B and $2.3 million for Phase 4 of the wastewater treatment plant upgrades; $475,000 for water meter replacements; $350,000 for the placement of a water main; $500,000 for PFAS filters at two of the city’s wells.

As of now, there are at least three more budget meetings scheduled.

The second budget meeting is scheduled for Monday, Feb. 10, which will focus on the general fund and include department presentations.

The third budget meeting is scheduled for Friday, Feb. 21, which will focus on the city’s enterprise funds – water and wastewater.

The fourth budget meeting is scheduled for Monday, March 10, and will focus on community partner contributions and grant requests.

The budget is expected to be approved during the commissioner meeting Friday, March 21.