With a new fiscal year beginning April 1, Rehoboth commissioners are poised to approve a budget that includes a 50 percent property tax increase, an increase in residential trash service and the implementation of a 3 percent lodging tax.
Commissioners are expected to approve the budget during their monthly meeting at 3 p.m., Friday, March 15, following a final budget meeting at noon the same day.
During the most recent budget discussion, March 4, City Manager Sharon Lynn presented commissioners a balanced budget with approximately $22.5 million in anticipated revenue, approximately $20.2 million in expenses and $2.3 million of capital outlay. The anticipated revenue total doesn’t include revenue from the 50 percent tax increase – $668,000 – or the lodging tax – $890,000.
Commissioner Richard Byrne said it’s important to remember that even with a 50 percent increase, property taxes will still make up only about 13 percent of the city’s revenue. He said transfer taxes and revenue from parking make up about 40 percent each.
During a budget meeting last month, city officials said the average annual property tax bill in Rehoboth is approximately $413. A 50 percent increase on that amount would come out to about $620, or roughly $17.21 a month.
The 3 percent lodging tax requires a charter change and approval from the General Assembly. As of press deadline Monday, March 11, no legislation had been introduced in Dover.
At the March 4 meeting, Mayor Paul Kuhns said it was important for commissioners to be thinking of a Plan B, in case the lodging tax isn’t implemented. He said in the past an increase to the rental tax has been discussed, as has using surplus money from the capital fund.
“I’m not saying it’s a definite thing. But a Plan B would be what are the projects we can take out or where can the money come from?” said Kuhns.
The budget includes approximately $720,000 in improvements to the three public restrooms on the Boardwalk. During a previous budget meeting, Public Works Director Kevin Williams said these improvements would basically include replacing everything in the bathrooms but the toilets.
Commissioner Stan Mills, probably the biggest proponent for cleaning up the restrooms, said he wanted to make sure money isn't being spent unnecessarily.
In addition to the heavy-duty sprucing up, Mills has presented committee suggestions to other commissioners for the addition of family restrooms and possibly a second floor on the Baltimore Avenue bathroom, which is also home to the beach patrol. The city needs to make sure it doesn’t spend a bunch of money this year, only to be told the best path moving forward is to demolish and rebuild next year, he said.
The budget includes at least a 2 percent raise for all non-union employees. Roughly 30 employees stand receive a pay increase of greater than 2 percent as a result of the city following recommendations made in a compensation study. Between the two, pay increases represent about $220,000 in expenses.
From the very beginning of the budget process, there’s been a proposed $25 increase in residential trash per season – in-season, from $250 to $275; out-of-season, $275 to $300 – remaining from the first draft budget to the second. This is expected to generate approximately $64,000 in revenue.
The proposed budget includes a $100,000 donation to the Rehoboth Beach Volunteer Fire Company, $50,000 to Rehoboth Beach Main Street, $15,000 for the Rehoboth Beach Public Library and $38,700 for the Rehoboth Beach Historical Society. Commissioners did not approve a request by Clear Space Theatre Company for $100,000 for each of the next two years.
As proposed, the budget also includes an additional eight seasonal police officers and two beach compliance officers that will fall under the beach patrol.