BUDGET WORKSHOP MINUTES April 3, 2018 @ 6:00pm 32 WEST AVENUE OCEAN VIEW, DELAWARE 19970 1. CALL TO ORDER Mayor Curran called the meeting to order at 6:00pm with the Pledge of Allegiance. Present: Mayor Curran, Council Members Carol Bodine, Tom Maly, Frank Twardzik and Bill Olsen; Town Manager Dianne Vogel, Finance Director Sandra Peck, Police Chief McLaughlin, Town Solicitor Dennis Schrader, and Town Clerk Donna Schwartz. 2. ADOPTION OF AGENDA A motion was made by Council Member Bodine, seconded by Council Member Maly, to approve the agenda as presented. The motion carried unanimously 5/0. 3. NEW BUSINESS A. Review and Discussion of Draft #4 Proposed FY19 General Fund Operating Budget and 5-Year Capital Improvements Program. Mayor Curran opened the meeting with the following statement saying a lot has happened since our last budget workshop. First and foremost, this Town Council did listen to your comments. The Town staff also listened to your comments. We heard them, and we responded to them. The three main topics raised were: 1) Tax increases; 2) Dealing with the Town bureaucracy; 3) Engineering costs and issues. On the topic of the budget, the operating budget was not a fat budget. It never has been, at least in the last three years. Notwithstanding that, we have reviewed the Operating Budget and have come up with budget cuts close to $80,000 for this year. On the topic of the Town bureaucracy, we have reviewed the system, and how it worked or did not work. 1) We are in the process of restructuring how we run the Building & Planning Reviews, Code Enforcement and Facilities Management in order to streamline the process. Please keep in mind that we are not changing the rules. The Town Codes will stay in effect and for building permits/code issues and we still have to deal with the County.
2) What we are doing is ensuring that enough people are cross-trained, and they are given the direction and authority to make decisions to allow the process to move along and not stagnate. To that end, the next few weeks will be difficult since some employees are out sick or on vacation this week, but things will improve and, in fact, have already improved in terms of delegating responsibility. On the topic of the engineering costs and the role that engineering plays in the bureaucratic process, we met with the engineering company today and gave them a week to deliver a detailed report on the status of every open project. Furthermore, within a month, we will start the review of outlying year s projects, years 3, 4, and 5, for the purpose of determining their necessity, scale and cost. It is our belief that once a more thorough review has been completed, the scale of the projects will be lowered substantially. Also, the previous scope of work that was outlined had shown the engineering costs to be 40% of the project. That amount has been reduced to the 20% to 25% range. Inasmuch as the tax increase has been driven mainly by the cost of drainage related projects, we again looked at the prospect for completing the proposed drainage projects that are in the pipeline and awaiting only easements. To that end, we have limited the projects for 2019 to Woodland Ave Extended-Drainage; Woodland Ave Extended -road repairs; and Woodland Park; (Page 8 of 8-Assumptions). We will have a much better handle on what the outlying years project costs will be within six months. At that time, as we prepare for Fiscal Year 2020 s budget, the Town Council will have to decide on how much of a tax increase will be needed at that time to fund the outlying years capitol drainage related projects. At the last budget workshop, I felt that it would be close to another 50% increase. Over the past week, I have come to believe that the outlying years projects will be considerably less costly and thus the impact on future taxes should be less than previously anticipated. Having said that, we still face the immediate problem of the Woodland Avenue drainage and road repair projects. Therefore, I am still recommending a 50% increase in Fiscal Year 2019 property tax. That will ensure that we get through FY 19 on a balanced budget and will have ample reserves available at the end of the year to carry us into FY 2020. Ms. Sandra Peck, Finance Director, stated she does not expect transfer tax to keep pace with rival banner years before the downturn in the economy in 2008. This is a revenue stream the State looks at each year to help balance their budget. Gross Rental Receipts is another revenue area that is being looked at. She said salaries were never budgeted at 6% 2
increases contrary to some comments that have been made during past meetings. Council directed that the budget be prepared with a 3% pool of funds for merit increases and a.822% CPI. Ms. Peck read her memo to council noting the items changed from the last draft: Reduced the tax increase from 100% down to 50% increase; Adjusted the property tax revenue for additional home assessments; Added legal fees of $40,000 for the 13 properties turned over to the Town Solicitor for condemnation related to Woodland Avenue Extended and Woodland Park drainage projects; Increased advertising and public relations expense lines items; Increased investment/bank fees FY20-23 that had not carried over; Reduced health insurance increase from 5% to 2.5% due to State confirming rates will remain the same through December 2018; Reduced ammunition, education, and non-capital expense lines all decreased; Eliminated seasonal staffing and reduced overtime from 15% to 13.2%; Reduced park expense, DPW supplies; drainage maintenance, and street maintenance all reduced; Removed from the Capital Budget: Park Improvements, Concrete Pad Sealant, and Shed. Moved Country Village drainage from FY19 to FY20. 4. CITIZEN S PRIVILEDGE Tom Campione, 2 Plantation Court, asked why there was a 25% increase in Public Safety. Mayor Curran replied we are increasing the staff and have hired a new police officer and an administration officer who will be helping with IT and other issues. Town Manager Vogel explained that worker s compensation is higher for police officers and so are the pension amounts. Mr. Campione noted that we have a wonderful Public Safety Department. Kitty Rehrig, 8 Wade-Winn Street, stated she does not think a 50% tax increase is a fair. She noted she had read the last six months of minutes and made some comments regarding spending. Mrs. Rehrig thanked Mr. Olsen for his time explaining the budget items to her. She would like to hear an exact amount, versus an amount pulled out of the air, like 50%, for what is needed. She told the council she appreciates their time and effort but more needs to be done. Ray Wockley, 3 Edisto Court, spoke to council about regarding shared burden and charging other Towns for helping them with our Police Department. Ted Scoleri, 5 Wade-Winn Street, passed out a handwritten paper with tax figures for a property in Bethany Beach and told Council this was proof that Bethany Beach did not double their taxes 3
in recent years as stated by Council Member Bodine. Mayor Curran said according to both the Mayor and Vice-Mayor the taxes doubled in 2008. Darlene Koiner, 18 Lakeview Drive, criticized the Town for posting only what notices are required. Mayor Curran replied that everything is on the website. She said she expected council to take care of her money and asked why council cannot take care of one critical project at a time. Mayor Curran replied that the council has backed away from trying to do all the projects at one time and doing the critical projects in the next two years. Judy Bundy, 7 Betts Avenue, stated she was against the huge tax increase and suggested better management of the Town s money needs to be a priority in the future. Luis Lopez, 22 Seabrook Road, stated he is still employed. He asked who the Town auditing firm was and asked where he can find the audit reports. Mayor Curran replied PKS is the auditing firm and all audits are on the website. Mr. Lopez suggested the state auditor look at the Town books. He said many people are mad about the tax increase, and told council they do not know what they are doing. Steve Alexander, 1B Clubhouse Drive, stated he appreciated the efforts of council since the last meeting; however, he feels more progress could be made to cut the budget. He knows that these drainage projects have been kicked down the road; he said he feels it is outrageous to fund all the projects at one time. He noted another one of his concerns is employee health insurance, and suggested the practice of paying for the employee s family be looked at further. Mr. Alexander also said the website is better than it used to be, but he thinks it could be better. Tom Campione, 2 Plantation Court, asked council if they looked at raising the taxes in increments instead of at a one-time 50% increase. Mayor Curran said they have looked at other numbers and 50% is what is needed. Brett Reilly, 8 Caroline Street, asked council what the exact amount of increase is needed to do the drainage projects. Mayor Curran replied the decision was made at 50% and this will cover the projects for two years. He said the projects in the out years will be looked at again and a decision will be made in the future as to the funding. Judy Bundy, 7 Betts Avenue, asked if the council if they get competitive bids on the projects. Mayor Curran explained the process to her and said all Town projects are competitively bid out. Mr. Schrader commented that municipal projects in this kind of economy do not always result in the lowest bids. 4
Kitty Rehrig, Wade Winn, asked for a meeting with Ms. Peck so she can better understand the budget and get her questions answered. Ms. Peck said she would be happy to set up a meeting with her. Ms. Peck confirmed with council that they want only the three Woodland Avenue drainage projects in FY19. Ms. Peck also confirmed some reduced advertising costs and reduction of salary increases in years 20-22 from 3% down to 2% with the Council. Council Member Bodine thanked everyone for coming to, and participating, in the budget workshop meeting. Council Member Twardzik stated he agreed with the 50% increase, however, he would like to have an engineer look at the other projects in the out years to make sure they should be done. Ms. Bodine suggested some grants might be found to help the Town with paying for these projects. Bob Thornton, Colt Lane, observed that a 50% increase is a shock to most people, and $150 is a big increase for someone on a fixed income. He suggested council take a good look at these drainage projects. Darlene Koiner, Fairway Village, asked how many Council Members lived in Town and would be subject to paying the tax increase. (All Council Members live in town and pay taxes.) Tom Campione, Wedgefield, suggested some of the staff increases could be spread out through the year to get past the 50% shock value. He thinks there are ways to have less impact on the budget. Mayor Curran replied that one of the public safety positions is paid by a grant for three years. He said Sussex County needs to step up and help with the policing of the region. Mayor Curran also said it would not be cost effective to hire an engineer; we would still have to deal with a company. Brett Reilly, Caroline Street, asked council if there would be any more changes to the budget and if the tax increase will stand at 50%. Ted Scoleri, Wade-Winn, asked Council how many of them were elected. Mayor Curran said they all were elected even if no one ran against them. He said he was elected by a landslide of indifference. Steve Alexander, Bear Trap, asked when the final draft would be available. Ms. Peck said she hoped by Friday noon. 5
5. EXECUTIVE SESSION None. 6. ADJOURNMENT A motion was made by Council Member Bodine, seconded by Council Member Twardzik, to adjourn the meeting at 7:10pm. The motion carried unanimously 5/0. Respectfully submitted, Donna M. Schwartz, CMC 6