The town of South Bethany held a special budget workshop Sat. March 19. Councilman and Budget and Finance Committee Chair Tim Saxton gave a brief overview of the current draft for the FY-12 budget.
“The community has a pretty strong input into what happens and what goes forward in the Budget and Finance Committee,” said Saxton. “They really drive what comes out of this committee.”
In his presentation, Saxton stated that expenses are tracking just to meet budget and that the committee and council have tried to be cautious about going over budget.
“We remain conservative. We were very nervous with the economy, where it was going and so we didn’t want to have a large budget that we couldn’t meet… I’m perfectly happy with this,” adding that when all is said and done, the proposed budget will exceed revenue by $180 to $250,000.
The committee reclassified unspecified reserves, establishing three categories: long-range planning, capital depreciation, operating reserve. Saxton said that the big plan for the budget is to establish long-range planning, which was approved this year by the council.
“The objective is, when we need to replace something, we have the money sitting there. We don’t take it out of operational any longer,” he explained.
A depreciation schedule was created, where everything owned by the town is depreciated, just as a business would do. Saxton said that the process had already been utilized this year, when the town replaced computers and a mower.
“I believe this lays the foundation for budget structure going forward that will, I think, protect us from tax increases,” he said.
Saxton used road repairs and replacements as an example of why the new plan will help. Although road repairs were depreciated and funds saved up, the actual roads were not. Therefore, there would be monies available for simple repairs — but if a road needed to be completely repaved, there was not enough money set aside to pay for the project.
“Even though we had the paper number for the depreciated road repaving, we didn’t set that money aside. So even though it’s sitting there as a cost, there was no money set aside to replace it,” said Mayor Jay Headman. “What we’re doing from this point on is having the roads in the long-range but as we replace them, we put them in depreciation and we’ll take that money every year and put them under the depreciation capital reserve, so when they come due in another 20 years we’ll have the money for it.”
He said that the long-term planning is designed to save funds for known and unknown special projects throughout town.
“If you want something, it goes to the council and the council says, ‘yes, we want to do this. Now start saving.’ We want to get out of, ‘we’re going to spend money just this year.’ We want to change that way of operating. The objective is to have a plan,” said Headman.
Long-term projects for the town include beach walkways access, water quality, post-storm beach clean up, bulkhead replacement, HVAC maintenance, beautification funding and IT structure.
Healthcare was also changed and reflected in the proposed budget, saving the town money. For employees hired before March 10, 2012 they are required to pay a 5 percent share for a single plan or 10 percent for the family plan. For those hired after, if they wish to have a higher-level plan, they will have to pay the difference.
“In reality it will save us money long-term as new employees come into the town,” said Saxton.
“Administratively, I think it’s better to leave all your employees the same,” said resident Mary Suazo, noting it could be difficult to recruit future employees.
“It bothers me that we keep whacking away at employee benefits. That’s one of the reasons we have the employees we have and the reason they stay,” agreed resident Bonnie Lambertson.
Saxton noted that the committee looked at the benefit packages offered by neighboring towns and what was chosen by South Bethany council is better than most.
“When you’re talking about competitive hiring, we still have a better plan. I think we’re going to be okay when it comes to hiring.”
“Things have changed,” added Headman. “And because things have changed, we’ve had to make some tough decisions. Our feeling was that it was prudent on our part, for the future of this town to reign in some of these costs.”
Other budgetary points of interest:
• Saxton noted that there would not be an increase in property tax.
• Rental tax will remain at 8 percent but is projected to increase by $470,000.
• Real estate transfer tax is projected to increase by 10 percent, approximately $300,000.
• Beach vendor income will remain at $15,000.
• Other grants remain stable
• Salary increases for employees’ increases 2.5 percent.
• Restructuring healthcare costs for all employees.
• Funding for Ocean Drive paving maintenance included at $180,000
• $33,900 has been set aside for handicapped beach access.