Ocean View ponders tax of its own

Ocean View Town Council has been looking over its shoulder since the Delaware Department of Transportation (DelDOT) Transportation Trust Fund came up more than $200 million short, in July.

DelDOT Secretary Nathan Hayward announced the department would be forced to delay dozens of road projects in the aftermath of this year’s state budget process. Gov. Ruth Ann Minner quickly appointed a taskforce to find new revenue sources, and since then there have been rumblings that town- and county-levied real estate transfer taxes might be one such source.

With that as background, Ocean View council considered what possible recourse the town might have if the state took those tax revenues for roadwork (or whatever), at the Sept. 6 council meeting.

The question at hand — if the state took control of that funding source, effectively making the existing transfer tax a state tax, could the town then levy another similar tax of it’s own, to meet its own needs?

Mayor Gary Meredith asked Town Solicitor Dennis Schrader if the town had that authority. “It’s more complicated than that, because the town derives its authority to levy taxes from General Assembly,” Schrader pointed out.

He said Ocean View’s charter, in being one of the oldest around, was somewhat quirky in that it did grant the town authority to levy transfer taxes — one percent, anyway. The state authorizes counties and municipalities to collect one and a half percent.

If the Ocean View council members wanted to change the town charter to mirror that, they’d need a two-thirds majority in both houses of the General Assembly, Schrader continued.

He said the real estate transfer tax started out as a temporary one-percent tax, back in the 1960s or 1970s — “There’s nothing more permanent than a temporary tax,” Schrader quipped.

According to Town Manager Kathy Roth, the state currently collects one and a half percent as well, so all real estate transfers incur a total three-percent tax (with certain exclusions for first-time homebuyers).

This generates considerable revenues the counties and towns, and the same again for the state. Schrader said the state had garnered $52 million from the counties alone last year.

He suggested the town might want to fight the state’s ability to change the proportion of which level of government retained what percentage of the transfer tax, “but we’re kind of shadowboxing at this point.”

The town’s Long-Range Financial Planning Committee will probably be looking into the use of projected transfer tax revenues in planning future budgets, anyway. While there’s still room for some smaller projects around town, the pending Fairway Village project (166 single-families, 166 townhouses at Central Avenue and Beaver Dam Road) will likely be the last major project, without additional annexations.

And there’s been some debate as to whether annexation really generates enough in new taxes to offset the cost of public services new residents will rightfully expect.

As Schrader pointed out, the state’s Livable Delaware policy, directing new development where infrastructure already exists, was supposed to be cost-efficient. “However, thinking in terms of water, that isn’t always the case — at which point Livable Delaware becomes an unfunded mandate,” he said.

Magill, who chairs the Long-Range Financial Planning Committee, noted this year’s first committee meeting (they typically break for the summer) — Sept. 20, 4 p.m., at town hall.

• In other business, Magill gave an update on the town’s pending central water project, still slated for completion by late 2006. The town is presently working its way through two obstacles — (1) the wait for DelDOT’s comments, regarding disruption of Route 26 when the town runs the new water mains, and (2) obtaining construction easements from the residents.

• Magill said they’d rescheduled a meeting for Saturday, Oct. 1, at 10 a.m. (town hall), when and where the town would have all the necessary paperwork available for signoff.

• Council members held first readings of three ordinances — (1) to rezone various parcels along Route 26 as General Business, (2) to give holiday pay to part-time employees who’d been with the town for 10 years and (3) to require developers to submit plans before the 15th of the month prior to the month in which the Planning and Zoning (P&Z) Commission would consider the project.

• They also approved a Request for Proposal, for property reassessments, unanimously, and a bid packet for drainage work in Country Village and the Cottages, by a 4-1 vote (Council Member Wade Spanutius opposed, saying he hadn’t seen it).

• Council introduced several new ordinances, especially in light of the recent disaster along the Gulf Coast — during a State of Emergency, (1) to allow the town to waive the normal bidding process for emergency-related purchases (less than $22,500) and (2) to reimburse personnel for meals.

• They introduced Regina O’Rourke’s request for annexation (1.1 acre) and a request for conditional use for a wine and cheese shop, in Bear Trap.

• And finally, council established a Historic Preservation District Committee, naming Spanutius and property owners Eugenia “Jean” Athan, Candace Conrad, Theresa Galvin and Ginger Hill as committee members (they’re still looking for a volunteer from the P&Z).