Bethany 2006 budget nearing finalization

A meeting of the Bethany Beach Budget and Finance Committee (BFC) kicked off Tuesday, Feb. 15, with discussion of the town’s investment policy. The policy is due to be approved by the town council at a future meeting, and the committee gave some final polish to the draft on Tuesday.

The core of the policy is a policy statement, which currently reads as follows: “It is the policy of the Town of Bethany Beach to invest public funds in a manner which will provide the highest investment return with full security of principal.”

The policy further details who is responsible for investment decisions: the town’s director of finance, currently Janet Connery, under the direction of the town manager, Cliff Graviet.

Connery said the policy, as drafted, “will work well for town purposes. We are not here to make money,” she said. “These investments are a sideline to doing our normal business.”

The committee recommended unanimously to forward the updated draft policy to the town council for consideration.

The road was not quite so smooth for ongoing work on the committee’s own mission statement. Discussion of the number of members to be on the committee resulted in debate not only over how many should be appointed but also over how many council members should sit on the BFC — or on any committee in the town.

Currently, four of the eight members of the BFC are council members. Vice-Mayor Carol Olmstead has handed over the committee’s reins to Secretary-Treasurer Tony McClenny. But Olmstead also requested to remain on the committee as an interested and experienced member. Council Member Wayne Fuller also serves on the BFC.

Finally, Council Member Bob Degen has a seat on the committee. There, also, arose considerable debate, for Degen is a non-resident who is only in town on some weekends. The BFC, in contrast, generally meets only on weekdays. Degen has never attended a meeting. He had, Olmstead noted, previously offered to resign from the committee on those grounds but was told he could remain.

Committee member Don Doyle recommended council consider taking Degen off the committee, leaving the group with seven members and thus less likely to produce a tie vote.

That would reduce the number of council members on the BFC to three, but concern remained over whether an official cap on the number of council members on any committee should be discussed by council. “There shouldn’t be four council members on any committee,” Olmstead said.

McClenny said he would refer the matter to council for discussion, noting also that council members occupy committee seats that had previously had residents offering to serve.

With interested residents volunteering, the factor of keeping a quorum at the meetings might be of reduced concern. Only four members of the committee (Olmstead, McClenny, Fowler and Doyle) were at the Feb. 15 meeting. Olmstead was unable to attend a simultaneous meeting of the Seaside Craft Show Committee because she was needed for the quorum.

The issue of membership remained a sticking point for the mission statement, and its submission to the council will be delayed until the issues are ironed out.

Also of interest to the committee for long term may be a suggestion that the committee take into account long-range planning in making its annual budget. Graviet and Doyle both argued that the town’s long-range planning had proven adequate, despite the lack of specific inclusion of such planning in the budget process.

Graviet said, “Internally, we have a good feel for the town’s financial needs. But we do have some projects that continue for five years or more, and they are often hard to plan formally, due to changing needs. They often take on a life of their own.” He pointed to the bandstand refurbishment project, which was originally estimated to cost $150,000 but is now being bid at $560,000.

Doyle instead recommended the town continue informal “strategic planning” for items such as long-term capital projects. Discussion of such philosophical changes will likely come up again in the fall of 2005, when Graviet recommended the committee tackle them, free of the time constraints of formulating the actual budget.

Under the mission statement revisions, the committee will also plan to review each year’s annual budget at a six-month point, to compare it to the actual expenditures and revenues in the town.
The BFC did review elements of the town’s draft budget for the 2006 fiscal year on Tuesday, moving toward finalization. The committee’s previous meeting led to few specific changes to the draft originally presented by Graviet.

The budget now reflects the additional $20,000 in charitable contributions requested by the committee members at that previous meeting. The Bethany Beach Volunteer Fire Company would receive an additional $10,000 for its building fund under that budget recommendation. A similar $10,000 donation would also be given to the capital campaign for expansion at the South Coastal Library.

Graviet noted that $27,000 had been included for the purchase of a new truck for the town. The additional vehicle will allow the town’s lifeguards to have a more functional vehicle than their existing Jeep, he said.

A $90,000 capital budget expense was also included, for expenses related to the town’s purchase of the Neff property at Routes 1 and 26. Graviet noted that the court elements of the purchase had been completed, with settlement now scheduled for some time prior to the original April 1 date.

One additional change was made to the draft budget at the Feb. 12 meeting. Doyle had — with the assistance of Connery — performed an analysis of the finances involved in town sanitation department.

The analysis projects that by the 2007 fiscal year, the department’s expenses will exceed its revenue, largely due to the necessary purchase of new vehicles. By the 2013 fiscal year, the analysis predicts, the department will have essentially eliminated its current $547,134 balance of funds.

On that basis, Doyle recommended an increase in trash collection fees, aiming to raise targeted reserves for the replacement of trash trucks.

He initially recommended residential hauling fees be raised from $200 to $225 annually. But discussion by the committee led to a decision to instead raise the fees by a flat 12 percent in all areas, including the comparatively inexpensive commercial hauling. The amounts will be rounded to a near dollar figure before the new fees are established.

Since the recommendation would affect the town’s revenue projections for the coming fiscal year, the trash fees will be included in an updated draft of the budget when it is presented to council in March.

Finally, BFC members reviewed recommended changes to the town’s schedule of fees and fines. A subcommittee comprising Doyle, Olmstead and Council Member Lew Killmer had met Friday, Feb. 11, to discuss updates to the schedule. The move is part of an effort by the town to remove fees and fines from the town code to the more easily updated schedule.

That effort itself brought concern from Graviet, who said he had consulted in recent days with Town Solicitor Terrence Jaywork on the matter. Jaywork’s opinion, Graviet said, was that the committee could remove the fees to the schedule but that it wasn’t necessarily recommended.

His recommendation has to do with the way the Town Charter requires changes be made to fines and penalties. “Section 6.8.2 of the Town Charter authorizes the Town Council to enact ordinances or resolutions relating to any subject within the Town’s powers; but then goes on to provide that the Council must act by ordinance to provide for a fine or penalty,” Jaywork’s opinion stated.

That could mean each provision for a fine or fee must remain in the town’s code. Or, it could mean that the town’s efforts to remove the fines and fees to a schedule would have to be made by an ordinance, and subsequent changes to the fees and fines likewise changed through ordinance. A resolution alone may not do it.

Graviet said he would take up the matter with Jaywork again to get additional clarification on which route would be allowed to the town. But the delay on the issue — as well as the question over how a number of proposed fines relate to state-mandated fines — means the proposed secondary schedule of fees will appear as a proposed supplement to the rest of the draft budget for the 2006 fiscal year.

Committee members voted unanimously to accept the amended budget, minus that troublesome schedule of fees. They will meet one more time prior to presenting the budget to the council, to finalize any late changes.

Discussion then proceeded on those recommended changes to fees and fines. They range from an increase in photocopying charges from 40 cents to $1, to a sizeable and more controversial increase in building permit costs. The change would alter the cost for permits for the “principal building” from 50 cents per square foot to 3 percent of the construction cost of the building (a $30 minimum).

That would mean a building permit for a 3,000-square-foot home could increase from $1,500 to perhaps $9,000 (based on a $100 per square foot construction cost).

The recommendation was made, Killmer noted, based on the standard practices of other towns in the area. The increase, he said, would help offset the additional time spent by town building officials in inspecting more elaborate homes, rather than simply basing the cost on square footage alone.

The revisions to the schedule of fees were largely made to ensure the town’s expenses in providing services are offset by the fees paid by those requesting them. “They were made based on real costs,” Killmer said.

Fines were also updated to be more current with a level of penalty deemed appropriate by the subcommittee, virtually eliminating all $25 fines as not being a significant penalty nor sufficient to cover town expenses related to the offenses.

The following are some highlights from the fees and fines that were recommended to be changed:

• Application for land combining or partitioning — increased from $75 to $175
• Application for a minor subdivision — increased from $450 to $700
• Application for a major subdivision — increased from $750 to $1,200
• Applications to the Board of Adjustments — increased from $200 to $500, to $525 for a basic application; $1,200 for an application requiring the involvement of the town solicitor; $2,000 for an application requiring the involvement of the town solicitor and a court stenographer; home occupation applications remain at $50;
• Water turn-off fee for non-business hours — increased from $75 to $150, to be comparable to county and private plumber costs;
• Possession or consumption of alcohol by minors in a public place — increased from $25 to $100;
• Use of motorized vehicle on the boardwalk — increased from $25 to $100, to $200;
• Construction outside permitted hours — changed from $250 to $1,000, to $1,000 on the second offense and $3,000 plus 15-day suspension of business license on the third offense;
• Various animal offenses — change from a range of $50 to $200; to $500 for possessing a vicious, rabid or diseased dog; $50 for a dog running a large, or one on the beach or boardwalk during restricted hours; increased from $25 to $50 for dog waste violations, plus repair costs;
• Prohibited use of laser beams — increased from $50 to $100, plus confiscation of the device;
• Impeding drainage — increased from $10 to $25 to $50, per day; and
• Three-year business license — an added option at no cost increase or savings, $150 for one year or $450 for three.

While the removal of these fines and fees to the schedule of fees will need to be reviewed by the town solicitor, some or all recommendations for the changes may end up in the hands of the town council, regardless of how or when that is done.

The draft budget for the 2006 fiscal year — likely minus the supplemental schedule — will be reviewed and possibly voted upon by the council at its March meeting.