Sussex County Delaware

F.I. Council Defends
Budget, Fee Schedule
 
Guest Opinion, Nov. 20, 2002 ...

Says Fenwick's Taxes,
Fees Not Out of Line

By HARRY HAON
F.I. Council Vice President

Editor's Note: Harry Haon, vice president of Fenwick Island Town Council, submitted this letter to Sussex County Online in response to a letter from Fenwick resident Ginny Borodulia.

Dear Ginny,

This is in response to your letter which was first received by Town Council and read into the record at last month's Special Meeting on October 18 and which references our conversation on October 11th. Your letter covers a number of topics and I will try to address them in the order they appear in your letter.

Budget Process

Town Council is well aware of the concerns that have been expressed by you and others that the budget process should include more opportunities for public comment and suggestions before final enactment by Council. We are now developing a revised process and timetable to meet these concerns for the next fiscal budget. We hope to have a schedule of meetings and workshops determined by some time in January and would welcome your suggestions in this regard.

Elected Officials

There are 57 incorporated municipalities in Delaware. Three of them, Arden, Ardencroft and Ardentown, are governed by a New England type Town Meeting in which all citizens meet quarterly to make decisions on all operational, financial and regulatory issues to be carried out by a hired staff. The remaining 54 municipalities are governed by elected representatives. One of these, the City of Wilmington, has a form of government (sometimes called "mayoral") in which there is a defined separation of powers between a legislative branch (City Council) and an administrative branch (Mayor and Cabinet). For instance, ~the legislature enacts laws which are enforced by the administrative branch and the administrative branch proposes budgets which are approved and funded by the legislature. This is the typical form of government for large cities, states and the federal government throughout the country.

All of the other 53 towns in Delaware including Fenwick Island have a "councilmatic" form of government in which power, authority and responsibility regarding both legislative and administrative matters are vested in a single elected committee called either the Town Council or the Commissioners. Each committee member has one vote and the majority rules. The presiding officer for the committee is called Mayor, President, or Mayor and President, as shown below for the eight coastal municipalities.

Municipality

Governing
Body

No. of
Members

Presiding
Officer

Elected,
Appointed

Bethany Beach

Council

7

Mayor

A

Dewey Beach

Commissioners

5

Mayor & President

A

Fenwick Island

Council

7

President

A

Henlopen Acres

Commissioners

7

Mayor & President

A

Lewes

Council

5

Mayor

E

Ocean View

Council

5

Mayor

E

Rehoboth Beach

Commissioners

7

Mayor & President

E

South Bethany

Council

7

Mayor

E

Regardless of the title of the presiding officer and regardless of whether that presiding officer is elected separately or appointed by the committee, each presiding officer has just one vote in the decision-making and governance process of the committee. This is how it has always been in Fenwick Island and is now.

Property Tax Increase

The recent 10% property tax increase was the first in Fenwick Island in nine years. At an average rate of 1.1% per year, this increase was considerably less than (a) the rate of inflation during this period and (b) spiraling costs for healthcare insurance. Obviously, Council would have preferred to have no tax increase, or even a decrease, but at least it was possible to keep the increase to a minimum (on average less than $60 per property) while maintaining the level and quality of services (specified in the town's 2002-2003 budget). This was accomplished primarily due to increased revenues from other sources -- notable real estate transfer taxes and grants from the State of Delaware, as well as cost containment efforts in all departments. These factors have led to surpluses in the last several years which have allowed a build-up of interest-bearing reserves which the Town's auditors have recommended for many years. The days when the Town had to borrow money to meet payroll at the end of the fiscal year are hopefully behind us for good. Maintenance of these reserves can more importantly help provide for the Town's share of future infrastructure needs, such as beach replenishment, road rebuilding and some day canal dredging.

Your letter questioned whether the 10% property tax increase brought annual taxes above the limit of 5% of appraised real estate value set by the Charter. The answer is no. The total appraised value for tax purposes of all real estate in Fenwick Island is just over $50 million. The 5% limit is, therefore, $2.5 million. With the recent property tax increase, total revenues for fiscal 2003 are budgeted at $1.1 million, of which 40%, or $425,000, are property taxes, way below the 5% Charter limit.

Your letter states that Fenwick Island has the highest property tax rate among the coastal Towns. On an absolute scale this may be correct, but the comparison is "apples to oranges". Unlike most of the other Towns, Fenwick Island appraisals are based on 1974 real estate values vs. the more up-to-date market values used by most other Towns. Obviously, Fenwick Island's apparent rate would drop dramatically if based on comparable market appraisals. The Town has been reluctant to incur the considerable expense ($50,000+) of a reappraisal, particularly since it wouldn't change the total tax revenue. It would, however, undoubtedly shift more of the tax burden onto certain segments, such as waterfront and commercial properties, which have appreciated at a faster than average rate.

Business License Fees

Your letter states that Fenwick Island is the only coastal Town "to base a business license fee on square footage rather than a flat rate." In fact, Fenwick Island business license fees are based on a combination of flat rate and square footage. This practice, which has been in place for over 20 years, allows the smaller stores, particularly in strip malls, to operate with lower license fees than larger single-building establishments. Other Towns accomplish a similar gradation by charging different fees for different kinds of businesses. Here are some comparisons, for instance, of typical annual business license fees in Fenwick Island and Dewey Beach.

Fees

Fenwick Island

Dewey Beach

Minimum Fee

$132

$200

Liquor Store

$250

$2,000

Motel

$650

$3,200

Real Estate Office

$250

$1,000

Restaurant

$400-$800

$1,600*

If Fenwick Island adopted the flat rate fee schedule of Dewey Beach, the average license fee here would more than triple.

* A $7,500 fee applies to Rusty Rudder, Bottle & Cork, etc. type businesses, which are not allowed in Fenwick Island.

Audit

Regarding financial audits, back audits which should have been completed in a far more timely manner in the past, have been given top priority with added temporary manpower assigned on an expedited basis. Council believes that the Town's financial records are in order, that the amounts in all banking and investment accounts are accurate, that previously approved accounting principles have been followed, and that no embezzlement or other criminal transactions have taken place. The purpose of the audit is, of course, to obtain outside, independent verification and/or correction of these accounting facts and procedures. It is not aimed at judging the logic or reasoning of budgetary decisions. Council is also examining various options for upgrades and/or new computer systems to allow more timely completion of future audits. All audits will be completed in ample time for review prior to the start of the next budget cycle.

Miscellaneous Expenses

Total Town expenses in fiscal 2002 were 98.5% of budget, of which approximately 2% were miscellaneous expenses not assigned to any of the 80 other specific cost codes established in the budget. Miscellaneous expenses for fiscal 2002 totaled $21,834; $5,034 over budget. Significant unforecasted sources of this over-run were:

Amount

Item

$1,596

Computer station for Building Official's Office

$1,222

Town match to obtain a $11,000 police department grant

$1,008

Storm weather monitor for emergency management

$1,000

Participation in Blue Wave Clean Beach program

$808

Beach wheelchair for handicapped access

$5,634

TOTAL

For next year, Council may consider including additional miscellaneous sub-codes for more detailed reporting of these expenses, as well as separate Council authorization of individual unforecasted items over, say $500 (which was done on 3 out of 5 of the expenditures above).

Police Services

Your letter expressed a number of complaints regarding the quality of police services in Fenwick Island. Town Council does not disagree with your position and is working vigorously to make fundamental changes aimed at bringing about a marked improvement in this service. Council is dedicated to the proposition that the Police Department's responsibility to aid in the prevention and prosecution of crimes and misdemeanors against persons and property applies equally to commercial and residential interests in the Town. Council also agrees fully with your belief that such service should be provided in a more community-oriented manner. We appreciate your and all citizen's patience as we work to achieve these goals in a timely, practical and sustainable fashion.

Public Works Department

You asked whether we need 5 full-time workers in Public Works Department. The answer is no, and we have no plans to go to that level. Neil Hanrahan, the Public Works Supervisor, has a crew of 3 men whose responsibilities, in addition to trash collection, include year-round maintenance of all Town buildings, grounds and equipment, bayside street ends, oceanside beach ends, 12 miles of right of ways, 1,200 street signs and small repairs to the Town's 6 miles of roadways. Next to trash collection, the most timeconsuming activity is the off-season work to maintain and upgrade the Town's extensive drainage system. For this work, we have been able to get substantial grants from the State during the last four years. We are routinely evaluating in-house vs. outside contractor economics for these functions and in general find that our internal wage structure and non-profit status offers significant cost savings. In addition to work scheduling and hands-on assistance during summertime trash collection, Neil is responsible for the planning, contract negotiations, and execution oversight of all major projects, such as street resurfacing, the central water system installation, the new Recreation Park, utility cuts, etc.

I hope the above helps to answer your questions. I would be glad to discuss any of this information with you at any time.

Sincerely,
Harry Haon,
Town Council


Recommend This Story to Your Friends

FENWICK NEWS INDEX
Local News Index | News Index

SC Online


Save $$$
on Easy
Internet
Access

Sussex County Online's Internet access service will save you $50 to $75 over AOL or MSN accounts but still give you all of the services of the national services:

  • Automatic Configuration and Signup CD
  • Multiple email accounts
  • Web-based email
  • Nationwide access
  • Online support
  • Personal web space
  • All from a locally owned and operated company.

    For details, visit our web site or call us at 537-4198.


    Our Sites

  • Home Page
  • Internet Access
  • Email Updates
  • Classifieds
  • Sussex Search
  • Sussex Shop
  • Beach Guide
  • Businesses
  • Computer Guide
  • Dining Guide
  • Events
  • Forums
  • Golf Guide
  • Government
  • Local News
  • Lodging Guide
  • Organizations
  • Real Estate
  • Schools
  • Sports
  • Sussex Towns
  • Sussex Weather
  • Advertising
  • E-Mail

  • Sussex
    Beach
    Guide

    From
    Beach-Net!
  • Activities
  • Bethany Cam
  • Dining
  • Events
  • Fishing
  • Lodging
  • Maps
  • Real Estate
  • Rehoboth Cam
  • Shopping
  • Surfing
  • * Beach-Net! is a service of Coastal Images Inc., Fenwick Island, Delaware.

    Sussex County Delaware

     

    Sussex County Online Copyright © 1999-2002 Sussex County Online
    Site Design and Maintenance by Cyber Weekly Consulting