The budget nightmare in Berlin is remarkable. With each passing week, the situation appears to become even more bleak. This week Mayor Gee Williams set out to address recent concerns he has heard from the public. On Tuesday, the town’s website included an explanatory letter from Williams called, “Mayor’s Message – Reasons for Increases to Taxes and Fees.”
The letter begins with, “There is no one cause, but there are multiple reasons that the Mayor and Council are considering increases in the Town’s property tax rates and water utility rates. These can be summarized under three different topics – sewer system upgrade debt retirement, capital projects and economic development.”
The letter is an interesting read and details the fiscal crisis facing the town. The biggest issue seems to be the town’s general fund reserves – what some governments call a rainy day fund for emergencies – have been tapped routinely to fund non-budgeted and unexpected operating costs for the town’s spray irrigation site. The method to prevent this reserve spending is three-fold – increase existing utility rates where needed to gets the funds self-sufficient, create new fees to generate new revenue to fund projects and up the existing property tax rate to the tune of 29%.
What’s unclear at this point is where the other town council members are on this proposed tax rate. Williams has been the only elected official to date who has spoken on specifics when it comes to the budget. Others have explained the budget problems and how they are offended by the pointed criticism lobbed at them, but no other elected official has given any indication if they support the proposed tax increase or if they have other ideas to reduce the impact on property owners. It would also be wise of them to soon share their opinions on whether a 29% tax increase is truly the direction the town is headed.
One option that’s not a realistic course is phasing in the planned property tax increases, according to the mayor. In his letter this week, Williams said implemented an incremental tax increase of 15% the first year followed by 10% the second year and 5% the third year would result in the town continuing to borrow from its reserves.
“If there is a way to enact incremental tax and water utility fee increases over three to five years, that would not put our town’s financial position in jeopardy by further reducing the general fund reserve balance, then I know we would all gladly do that,” Williams wrote.
According to the mayor’s calculations, under that incremental three-year increase hypothetical he outlined, the needed cash from the reserves to offset utility losses would be $1.5 million in fiscal year 2020 and $290,960 in fiscal year 2021. He said this borrowing would result in a reserve balance of $1.8 million in fiscal year 2022. Williams wants the town to have a reserve balance of $4.5 million, which equals one year of operating expenses.
This is clearly where the council needs to weigh in. Berlin does not need a reserve fund equal to one year’s budget. Most governments are in the 15% to 20% range of single year budget expenses, meaning they have enough cash to get through two to three months if no new dollars come in.
It’s clear Berlin’s reserves are not presently where they should be – about $200,000 in spendable cash according to officials – but this problem cannot be fixed in a single year with a whopping tax increase. It’s not being dramatic to maintain that kind of hike will change Berlin forever. People will relocate and elected officials will be ousted in the next election. I actually think the increases the mayor outlined are reasonable in his hypothetical, but I think a 10% property tax increase over each of the next three years could be tolerated by taxpayers. I realize how ridiculous that sounds, but it confirms the realities of the hardships facing the town today.
I’ve always been a fan of unique obituaries to remember loved ones. There were two examples in the paper this week that featured touching tributes.
One obituary, for Rodney Ward, an Ocean City resident for 36 years, was sentimental. It read, “Rodney was a very humble person, never taking credit for anything, always making sure others were thanked and appreciated. He thought of everyone else above himself. No service is planned; however, a Celebration Of Life for Rodney will be held at a later date. He also requested no flowers be sent; instead, he would have liked for others to go outside on a fine spring day and pick a bouquet of violets or wildflowers for themselves or someone they love. That’s the kind of thing he always did.”
While touching in its own way, the obituary for Matt O’Hare, a long-time administrator with Worcester Prep, was long on humor and fitted his larger than life personality. His obit read, “There’s no question that Matt O’Hare will be missed by his friends and family. But as people have noted, his impact will be felt in this community for a long time. He touched many lives and got a lot of laughs. And that’s what he loved. Maybe, as a favor to him, you could tell a friend one of those stories or jokes that he told too-many times. Feel free to embellish if it makes a better story, as you know he would. Or maybe get up somewhere and give a speech. Keep it funny, short, and sincere — just remember: being sincere doesn’t necessarily mean it has to be truthful.”
Both of these obituaries hit close to home, as I have known both O’Hare and Ward for more than 30 years. While completely different people with contrasting personalities, they were both special people who will be missed by many in our community.