Ocean View cuts costs, maintains proposed tax increase

The Town of Ocean View held a budget workshop earlier this week to review a fourth draft of its proposed Fiscal Year 2019 budget, at which time the council came to the consensus it would keep the proposed 50-percent tax increase in the proposed budget.

“A lot has happened since our last budget workshop,” said Mayor Walter Curran. “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.”

Curran addressed three topics discussed — tax increases, dealing with the Town bureaucracy, and 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.”

Those dollars were cut with the reduction of routine drainage and street maintenance, as well as a reduction in police overtime, training, education and seasonal staffing.

Curran said in terms of engineering costs, the Town did look into hiring its own full-time engineer but found it would not be cost-effective. He added the Town had a meeting with Kercher Engineering, who provides engineering work for Town projects.

“We met with the engineering company today and gave them a week to deliver a detailed report on the status of every open job. Furthermore, within a month, we will start the review of outlying years’ projects, years three, four and five, for the purpose of determining their necessity, scale and cost. It is our belief that once a more thorough review is done, the scale of the projects will be lowered substantially.”

It was also previously projected that some projects were estimated to have engineering costs to be 40 percent of the overall budget, which Curran said has now been reduced to the 20 percent to 25 percent range.

“That wasn’t built in as a buffer,” said Finance Director Sandra Peck. “I sat in on a meeting and was told by the engineering firm in January ’40 percent’ on certain projects… They’re coming back, they’re doing some restructuring apparently and now giving us different information going forward. It wasn’t just pulled out of the air, and it was based on the input that I got to prepare the budget.”

The Town also intends to “streamline” the Building and Planning Reviews, Code Enforcement and Facilities management.

“Please keep in mind that we are not changing the rules. The Town Codes will stay in effect and for building permits/code issues we still have to deal with the County,” he said. “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 folks are out sick or on vacation this week, but things will improve and, in fact, have already improved in terms of delegating responsibility.”

Although it was not announced at the meeting, the Town’s Administrative Official Charles McMullen resigned on Monday, April 2.

“He voluntarily resigned,” said Curran following the meeting.

Curran said the Town has not made any official plans yet as to if they will seek candidates to fill the position.

“We are literally shuffling the deck. We’re looking at who can do what. Are they in the right spot? Can they be in a better spot? Where do we need to go? How do we need to divide the duties better? We’re literally doing a wholesale relook at how that whole process is and it’s on the Code review, enforcement, and facilities. We’re dividing it up, getting people to delegate more and I think it’s going to improve very rapidly.”

As for drainage projects, the Town continues to budget Woodland Avenue Extended drainage and road repairs, as well as Woodland Park drainage projects in the proposed fiscal year budget.

“We still face the immediate problem of the Woodland Avenue drainage and road-repair projects. Therefore, I am still recommending a 50-percent 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.”

Councilman Frank Twardzik agreed with the 50-percent increase, however he said he would like to have a hydrological engineer review the projects.

“For me this Town is chasing drainage like the whack-a-mole game.”

Councilwoman Carol Bodine said she agrees with the increase, and would also like the Town to look into grants they may be able to acquire from the Delaware Department of Natural Resources and Environmental Control.

And although Curran previously stated he believed another tax increase was imminent in future budget years, he now believes it could be less.

“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,” he said. “At the last budget workshop, I felt that it would be close to another 50-percent increase. Over the past week, I have come to believe that the outlying years’ projects will be considerably less cost and thus the impact on future taxes should be less than previously anticipated.”

With a 50-percent increase, based on the Town of Ocean View’s assessed property values and property tax rate for the 2018 fiscal year, homes assessed at $200,000, $300,000, $400,000 and $500,000 would see an annual increase of $165.40, $248.10, $330.80 and $413.50, respectively. The Town is, however, changing over to County assessed property values.

At the meeting, Peck gave an update on the draft budget, and clarified a number of things discussed at last week’s budget workshop.

While 52 percent of the Town’s transfer tax does come from resale, the Town does expect a decrease in revenue following the buildout of major developments in town. She noted the Town does not expect it to “keep pace with the record revenue” they are currently collecting, which rival banner years prior to the economic downturn in the early aughts. She added that transfer tax is not a stable revenue source, not only because it’s dependent on sales, but because those monies are looked at by the State as a way to possibly balance its budget.

“We don’t know if the local communities will continue to get that revenue,” said Peck. “That’s something we just don’t know and it gets questioned every year.”

Peck clarified that the Town has never drafted a budget to grant six percent salary increases for Fiscal Year 2019. Council did direct the budget be prepared with a three percent merit line item, and all employees be given a Consumer Price Index .822 percent based on their current salaries.

“Merit is a pool of funds that will be distributed only after performance evaluations are completed and given to employees reviewed by the town manager.”

Citizens voice opinions

Wedgefield resident Tom Campione asked why there was an increase in public safety in the proposed budget.

Curran said the department is hiring two new employees — one a sworn officer, who is being partially funded through a grant for their first three years of employment, and an administrative position.

“We have a wonderful public safety department… I’m not begrudging that,” said Campione. “It seems like a very steep increase.”

Curran added that the Town would be speaking to County and State officials to discuss the idea of a regional police force.

“The County has to step up and start doing the right thing,” he said.

Town Manager Dianne Vogel noted that there are other cost drivers to that figure.

“They’re all classified police officers, so workers’ comp is higher,” she said, adding that the pension, which is controlled by the State and not the Town, is expected to increase by 46 percent in the coming fiscal year.

Resident Kittie Rehrig thanked councilman Bill Olsen, whom she said took the time to sit down with her to go over parts of the budget.

“I still don’t think 50 percent is a reasonable amount. I think that’s asking a lot of the citizens of this town,” she said, adding it seemed like a figure that was “pulled out of the air.”

Ray Wockley, voiced his concern with employee pay raises, noting the “grunts” in the military (from which he is retired) have been granted a 5.7 percent pay increase over the last four years.

“They could increase that by getting promoted, combat pay — $120 a month, big deal — or if they could speak a foreign language.”

Wockley also recommended the Town simply do repairs for areas where they already have easements, and not mess with eminent domain, which will likely be opening “Pandora’s box.”

“There is so much water here, I’m not sure you can get rid of it,” he added.

He added that while the Town does follow the law in terms of notifying citizens of Town governmental happenings, but “not the spirit of the law.”

Resident Ted Scolari presented council with a hand-written piece of paper which he claimed showed property tax costs for a $300,000 to $400,000 home in Bethany Beach. However, the paper did not include the property’s address or the name of the property owner.

He went on to claim that the property taxes in Bethany Beach for the unidentified property have never doubled. The Town of Bethany Beach did increase its property taxes by 100 percent in Fiscal Year 2008. Currently, Bethany’s property tax rate is $0.175 per $100 of assessed value.

Steve Alexander said while he appreciates the progress the council has made in the last week, he would like to see more. He recommended the council follow the lead of homeowners’ associations, by having long term reserve studies conducted.

He also added he doesn’t believe the Town should continue to pay for 100-percent of employee health insurance.

“I’m not aware of other Towns that do provide that benefit.”

Judith Bundy asked if there was a way to save money in terms of who the Town hires to do the capital improvement projects.

“For any project like this we do the initial study, we get the estimates of cost from the engineering company and then they go out to bid,” said Curran. “They’re all competitively bid, and it’s always the low bidder. All of those projects are always bid out.”

“Given the current economy, it is more advantageous for private contractors to do work for private businesses than do municipal work because they don’t have the burdens of bonding you have when doing municipal projects,” added Town Solicitor Dennis Schrader. “An economy that is in a growth mode does not result in low bids for us… Often we bid alternates in our projects so we can remove portions of the project that we need to.”

Property owner Bob Thornton suggested that the Town and media, instead of dealing in percentages, speak more in terms of actual dollars.

“These numbers being thrown around — 50 percent, 100 percent —They have such a shocking value. Most people who moved into this jurisdiction are accustom to paying $8,000 to $12,000 a year in taxes. As soon as they hear ‘40 percent,’ ‘50 percent,’ ‘100 percent,’ thousands of dollars go right through their head.”

Thornton said he’s not trying to undermine those who are on a fixed income, but said that someone who has a house assessed at $300,000 in Town will see a $250 a year tax increase.

“Here to go from $500 to $750 is a lot of money percentage wise but in the large scheme of things, to be able to live in a town as nice as Ocean View I think we have to do something to attack the drainage issue.”

Bodine thanked all those in attendance for taking the time to attend the meeting.

“It really feels good to know you guys are taking an interest in understanding this budget.”

Residents encouraged to participate in process

“Are any of you Ocean View residents and will you pay this 50-percent or 100-percent tax increase?” asked resident Darlene Koiner. “Someone told me you were not living in Ocean View.”

“We are all residents and we all pay taxes,” said Curran.

“Most of us are on fixed incomes,” added Bodine.

Curran added that he hopes the residents in attendance that evening, whose numbers had dwindled from previous meetings, would continue to take an active part in the Town’s government.

“As a Town, things will stay better if you help us stay focused, there’s no question about it,” he said. “Yes, we’re the elected officials who are up here but the point of it is, we still require the citizens to come in, make the comments and make the remarks.

“We’re going to have a budget vote next week, but typically after that, everybody disappears for a year. I’m asking you, don’t disappear. Keep showing up, keep asking questions. That will guarantee you that everybody stays on their toes.”

Scolari followed Curran’s remarks by asking those who serve on council how many were elected by vote. Bodine was the only councilperson to raise their hand; she was elected in 2015.

“That’s a very important question,” said Curran. “Why didn’t someone come out and run against me? This is important — people have to understand. When I first came to this Town, I used to come to these meetings, too, and sit in the back and listen. There was a lot of yelling and screaming and name calling. That doesn’t happen anymore, and as long as I’m here it won’t happen.

“However, my question, I think is a valid question — I threw my hat in the ring, no one else stepped up. That’s not my fault. From my perspective, and I’ve said this as a joke, but unfortunately it’s real, twice I was elected in a landslide of indifference. That is on the citizens of this town.”

Council unanimously agreed to maintain the 50-percent property tax increase in the proposed Fiscal Year 2019 budget. The council will hold its monthly council meeting on Tuesday, April 10, at 7 p.m., at which time the council is expected to vote on the budget.