FENWICK ISLAND – Town officials last week voted to approve a $2 million-plus budget for the coming fiscal year.
Last Friday, members of the Fenwick Island Town Council had before them a recommendation from the town’s budget and finance committee to approve the fiscal year 2024 budget.
The proposed spending plan features $$2.2 million in total revenues and $2.6 million in total expenses. Councilman Bill Rymer, town treasurer, said the operating loss would be funded through realty transfer tax (RTT) and general operating reserves.
“The $495,000 operating loss will be funded by transfers from the RTT reserves, as well as the general operating reserve fund,” he said. “The RTT transfers for this coming year, will be the same amount as what was provided last year. So the differential will come out of the general reserve.”
In May, Rymer presented the budget and finance committee with the town’s draft spending plan. With $2.17 million in projected revenues and $2.71 million in projected expenses, the town initially faced an operating loss of more than $541,000.
In an update last month, however, Rymer noted that certain revenue projections had increased, and some operating expenses had moved to capital expenditures. As a result, the deficit had narrowed.
Rymer told council members last week the proposed budget was essentially the same as what was presented to committee members in June. The only change, he noted, was an increase in the trash collection charge.
“There was a slight change related to anticipated costs of the trash collection agreement, so the fee schedule included a $15 increase because of cost being charged by the trash collection firm resulted in a higher charge to the residents,” he explained. “It’s budget neutral. The costs went up, but the fee went up … so the exact same $495,000 operating loss is what’s being presented to the council. I’m comfortable presenting this budget because it’s budget neutral.”
Rymer added that the budget included no increase in property taxes.
“There is no increase in property taxes, as the budget and finance committee felt it was appropriate to use the strong cash flows from past house sales and building permits over the last few years to continue to offset the inflationary pressures, primarily coming from increased salaries and increased employee benefits,” he said.
Rymer also noted that the town’s cash balances would decrease from $4.5 million at the end of fiscal year 2023 to roughly $3 million at the end of fiscal year 2024. However, he said the projected balance would continue to exceed the recommended level of cash reserves recommended by the town’s auditing firm.
“The largest usage of cash for this upcoming year relates to our goal of completing the $1 million dredging project,” he said. “We start the year with $4.5 million, and a million of that spread comes out of, hopefully, completing the dredging project.”
For her part, Mayor Natalie Magdeburger questioned the use of RTT funds.
“In terms of pulling from RTT … has that been done in the past?” she asked.
Rymer said it had.
“Historically, our operating shortfalls have come from RTT funds …,” he said. “The upcoming budget will be a combination of RTT and funds that are in the general reserve, which grew over the last couple of years because operations have done better than expected.”
Magdeburger also questioned the town’s operating losses.
“How many years have we been operating at a loss and pulling from RTT, generally?” she asked.
Councilman Richard Benn said he had been a member of the budget and finance committee since 2015. He noted that town has operated at a loss for as long as he could remember.
“We’ve been operating at an operating loss of greater than $250,000 for as long as I can remember …,” he replied. “It’s always been a significant number.”
After further discussion, the council voted 6-0, with Councilman Paul Breger absent, to approve the fiscal year 2024 budget as presented.
The council this week also approved the town’s fee schedule for the coming year. Rymer noted the schedule included a $15 fee increase associated with the town’s trash collection.
“The only change that’s being proposed to the fee schedule that exists as of right now is the amount being charged for waste collection,” he said. “There’s an increase of $15 which reflects the increase of charge coming from our waste collection group and the additional pickup schedule.”
Magdeburger also noted that the fee schedule did not yet include changes to the emergency medical services fee. She said contract negotiations with the Bethany Beach Volunteer Fire Company were ongoing, and that she expected the fee to increase.
“The coastal communities – Bethany, Fenwick, Sea Colony and South Bethany – negotiate a contract that goes on for a set period of time with the Bethany Volunteer Fire Department,” she explained. “The contract we’ve been working under for the last three or five years expires at the end of December. So we’ve already started meetings with the volunteer fire company, and they are asking for an additional increase in the fee. They have not raised it in the last five years.”
