BERLIN — While there may be trouble at the county level, the budget picture for the town of Berlin is largely positive and contains a property tax decrease, a $500 one-time bonus for employees and a more than $500,000 budget surplus with revenues coming in higher than expenditures.
Totaling $13,333,164 million, the proposed budget is $328,680, or 2 percent, lower than the current budget. This is the fourth consecutive year that the town has decreased its budget from the previous year. Even so, the council is considering dropping the current property tax rate of 73 cents per $100 of real estate value down to 68 cents per $100.
“This 5-cent decrease equals a reduction of $50 per every $100,000 of real estate valuation, or $100 less a year for the average residential taxpayer in the Town of Berlin,” Mayor Gee Williams said.
Town employees also benefit in this budget. While it does not contain a salary increase as last year’s did, the proposed budget will include a one-time $500 bonus for every employee, similar to what was proposed in Ocean City last Friday, though Williams reported the two ideas were developed independently.
“In a very tight time, we want to say more than thank you [to employees],” he said.
Williams admitted that the $500 is “certainly not what I would like it to be” but that, in lieu of a much more expensive salary increase, it would at least show appreciation toward the employees that Williams credits with much of the town’s success.
Even with revenue declining 2 percent this year and funding from property tax down $102,000, as a result of declining property values, Williams said his budget is able to come in lower than last year’s, despite a property tax decrease and employee bonuses for two reasons.
First, the already mentioned budget surplus is available to help balance expenses and revenues.
“For the third consecutive year, the town is experiencing a budget surplus in actual revenues over actual expenses,” said Williams. “In fiscal 2012, the budget surplus will be in excess of $500,000, or 11 percent over the budgeted amount.”
Secondly, Williams gave Berlin’s infrastructure a nod, and said that investments into it have protected the town’s assessed property tax base, which should only see “modest” negative impacts during the next three-year assessment cycle.
Berlin’s infrastructure, mostly in the form of its business community, was a point that Williams returned to time and time again. He praised Economic and Community Development Director Michael Day for helping make the town attractive to private businesses. According to Day, the town pretty much sells itself.
“Business people see the vibrancy and decided to do business,” he told the council.
Day added that, for every $1 his department spent on encouraging growth, it received roughly $3 back in grants.
“I think we get a lot of bang for our buck there,” Williams said of Day’s department.
One item that the council hesitated on in the mayor’s proposed budget was the inclusion of a $75 business license for out-of-town operators. Until now, Berlin has not required such a license.
Planning and Zoning Director Chuck Ward said the license would do more than bring in some revenue to the town. It would help his department start relationships with any businesses not located in Berlin that still operate in town.
“It’s very helpful to us to have a relationship with every contractor that comes into town,” he said.
However, Councilwoman Paula Lynch wondered if the new requirement might scare off businesses that would otherwise bring commerce into town.
“Is this going to deter people from doing business in Berlin?” she asked.
In its current form, only delivery services and taxis are exempt from needing a license to do business in Berlin. But Lynch cautioned that not every other business probably needs to be included in the requirement. She pointed out that it would be a little overboard to make a $75 business license mandatory for a 17-year-old entrepreneur mowing lawns.
“It will certainly be a learning process throughout the first year,” said Town Administrator Tony Carson.
Nothing is final with the licenses yet and the requirements can be changed before the budget is adopted, he added.
“We haven’t put this as revenue,” said Carson.
While Williams was happy with the state the town is in, especially with its ability to offer a property tax reduction, he warned residents not to “count their chickens before they’re hatched.”
“We face some very important decisions as a community on what we are willing and able to do to in the immediate future and over the long term in managing and maintaining our stormwater system in a cost-efficient and environmentally responsible manner,” he said.
The next budget meeting for Berlin will be on Enterprise Funds and the Fire Company and will take place April 30 at 6 p.m.