Berlin Council, Citizens Continue Heated Tax Hike Talks

Berlin Council, Citizens Continue Heated Tax Hike Talks
Photo by Charlene Sharpe

BERLIN – Residents continue to plead for an incremental tax increase rather than the 29% jump proposed by Berlin’s mayor.

At Monday’s meeting of the Berlin Town Council, dozens of residents urged elected officials to reconsider the 29% tax increase proposed by Mayor Gee Williams at last week’s budget work session. The suggested increase would raise the tax bill on a $300,000 home by $600.

“You can’t do this all at once,” resident Marie Velong said. “It’s unconscionable. You only have working people here. We didn’t get a $600 raise this year.”

At a work session last week, Williams suggested a 29% tax increase as well as water, sewer and stormwater rate increases.  While the rate increases will end the utility funds’ practice of borrowing from the general fund, the tax increase is expected to gradually restore the funding depleted by the three utility funds during the past four years.

A roomful of concerned residents greeted the officials at Monday’s regular meeting. Though the budget wasn’t on the agenda, it dominated the public comment portion of the meeting.

Resident Don Fletcher questioned the need to restore funds borrowed during a period of several years in one year. He also pointed out that the town’s property tax revenue would increase 7% even if the town didn’t adjust taxes. Fletcher asked if the 29% increase would eliminate any shortfall.

“It would mean no more borrowing from reserves,” Williams said.

Merchant Michelle Bruder said she’d spent the day reviewing the town’s budget and was disgusted by some of the expenses.

“Why do we as taxpayers have to take care of what you guys did?” she said. “Small leaks sink big ships.”

She said the town spent $2,000 on Sam’s Club memberships.

“The small little things that I went through today, I was like excuse me are you kidding me?,” Bruder said. “I struggle here as a business owner. Struggle. I have struggled here for 17 years and I have to see this. I’m sorry it makes me sick.”

Cape Circle resident Larry Smith criticized the proposed 29% increase.

“The council and you mayor are the ones that screwed this all up,” Smith said. “How come we’ve got to make it up at one time? How come the taxpayers’ backs are being broken to fix your screw up?”

Williams replied that while he’d proposed a 29% increase, another option was an incremental increase.

“The other option is we incrementally increase taxes over let’s say three years,” he said. “That would mean continuing to borrow from reserves for three more years before we stop that.”

Smith said he already paid the town more than he paid for county and state taxes combined.

“You’re going to price everybody right out of this town,” he said.

Bruder interjected that Berlin could turn into another Snow Hill.

“Get rid of some of these white elephants you’ve bought,” Smith said. “Quit expanding. Every time you annex or build something else you’ve got to increase all the utility fees because now you’ve got extra draws on all the utilities.”

Councilman Troy Purnell said that wasn’t true.

“The developer pays for everything and I know it,” he said. “I can tell you right now any growth this town receives, like Oceans East, has brought revenue to this town and not had any other expenditures.”

Smith asked who was paying for the town’s spray irrigation fields.

“We all are,” Purnell said. “We had to do that years and years and years ago because we ran out of capacity… Everybody wanted to get a spray irrigation facility to get out of the stream. It was a good idea. It was extremely expensive. Operating it has become even more expensive than we anticipated. That’s the number one issue we’ve got. We’re still trying to figure it out. In one year our deficit at that place went to $1.1 million and that’s when it really, the wheels came off.”

He said officials would talk about that on April 15, which is when the utility fund budget work session is scheduled.

“We need to know why but we also need to fix it before it bleeds too much more,” Purnell said. “The developer pays for everything I can tell you. The only thing you’re getting from a new development like Oceans East is revenue to help residents in this town spread that cost out and pay for that sewer plant. … That annexation is a big deal to this town. It’s helping us all out.”

Resident Deborah Fletcher, a retired nurse, said she was worried about the impact the tax change would have on home sales.

“My big asset is my home,” she said. “If for some reason I can’t sell it, that’s a big concern.”

Resident Kim Holloway questioned the town’s efforts to recover delinquent fees and taxes. She also outlined the impact the proposed increase would have on her family. She said the family’s taxes would go up $700 a year, bringing her Berlin tax bill to roughly $2,800. She added that that would be in addition to utility bills and her county tax bill, which is more than $2,500.

“We are being sucked dry by this town,” she said.

Resident Jason Walter said that while Purnell was right about the fact that Oceans East wasn’t costing the town, the town had abandoned its wastewater discharge permit and opted to go entirely with spray irrigation, which had proven to be costly.

“We abandoned a valid permit and instead of incrementally going into spray we went straight into it,” he said, adding that he thought that was a mistake.

Williams said that while the town had been mandated not to add any more discharge, it had also pushed for spray irrigation in the interest of environmental stewardship.

Purnell added that officials were looking at all possibilities as they developed the coming year’s budget.

“There’s nothing we have not looked at,” he said.

Walter asked about the town’s plan to pay for its new police station. Williams said casino revenues were paying for the building. Because they’ve increased in recent years, the building could be paid for in eight years. When asked how the building was paid for, Town Administrator Laura Allen said the general fund had paid for the building so casino revenues were now going into the general fund to replenish what was spent on the station.

Walter said the town should have bonded the cost of the police station.

“Why pay for a 50-year structure in eight years?” he said.

Velong said she was frustrated that elected officials had complained about a lack of public participation and now, when they had that participation, seemed to be ignoring it.

“It appears you’re still going to do what you set out to do,” she said.

Velong also advocated for an incremental tax increase.

“You had four years of pulling from reserves,” she said. “What is the big emergency in replacing all the money in one year?”

Residents Kim Mumford and Jennifer Dawicki echoed her comments. Dawicki, owner of The Globe, also expressed concern about the town’s New Year’s Eve ball drop. Though it was eliminated from the proposed budget in a work session last week, on Monday Economic and Community Development Director Ivy Wells requested that it be put back in the budget. Dawicki said she was already planning for New Year’s Eve and wanted to know when there’d be a final decision on whether the event was happening.

Williams said discussions were ongoing and pointed out that the budget process had begun earlier this year because of the planned tax and rate increases.

Resident John Watson told the council the increases had created a level of anxiety among citizens.

“We elect you officials to do good work on our behalf,” he said. “Obviously you have failed. I don’t feel you’re taking us very seriously.”

Councilman Elroy Brittingham said officials valued public input.

“I think people are forgetting we live here too,” he said. “We’re not just looking at it for one or two people, all of us are in it together. We do consider what everybody’s saying. We’re glad you’re coming so we can have some input.”

Resident Samantha Pielstick asked officials what level of reserves the town should have. Williams said that at the end of the fiscal year the town would have about $2 million but he wanted to see the town with at least $4 million in reserves.

Pielstick told the council she supported a two-tier tax system and asked if the town could consider a lower tax rate for seniors, as many were on fixed incomes. Pielstick does not, however, support different tax rates for residential and commercial properties.

Councilman Thom Gulyas said he was concerned about the impact a tax increase would have on seniors as well and suggested they look into the various tax credits available through the state and federal government.

“There’s all types of benefits that are out there,” he said.

As they have during each of the town’s budget discussions, citizens also brought up the issue of Berlin Falls Park, which was purchased by the town for $2.5 million in 2016. Velong asked why the town was paying a coordinator to develop it.

“You don’t do that for the other parks,” she said.

Williams stressed that the town had purchased the property to improve it. He said the town had taken actions to make the former poultry processing plant environmentally neutral.

“It is finally not hurting this town,” he said, adding that the coordinator was a contracted employee who was paid less than $30,000 a year.

Velong maintained that if the town was making cuts it should stop pursuing frivolous things.

“If we’re cutting we need to cut and put that on the backburner …,” she said. “It’s going to take forever to get that right.”

When Smith asked why the town had purchased the park, Williams said it was so the town could control the future of the large industrial property.

“If we hadn’t done it we’d be at the mercy of whoever comes down the road,” he said.

About The Author: Charlene Sharpe

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Charlene Sharpe has been with The Dispatch since 2014. A graduate of Stephen Decatur High School and the University of Richmond, she spent seven years with the Delmarva Media Group before joining the team at The Dispatch.