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Despite a drop in the real estate market, the financial situation of the city of Rehoboth Beach is as rock solid as football commentator Jimmy Johnson’s hair.
Carl Hogan of Barbacane, Thornton and Company, the auditing firm hired by the city, gave a report for the fiscal year between April 1, 2006 and March 31, 2007.
Hogan said Rehoboth had $2.7 million in government funds, or surplus funds leftover, an increase of $805,000 from the prior year. Hogan said the increase was due to greater-than-anticipated revenues. Hogan also said the city had $22 million in proprietary funds, essentially water and sewer taxes, that resulted from a 34 percent increase in water and sewer rates and impact fees collected from new hotels and restaurants. The city’s expenditures totaled $14.6 million, Hogan said, with total revenue at $15.4 million, up $800,000 from the previous fiscal year.
Hogan said the biggest thing going on in the city is a myriad of capital improvement projects that include the Lake Gerar bridge replacement, the Lynch well project, the city municipal complex project and future Boardwalk refurbishment.
City Manager Greg Ferrese said some of the money used to pay for the latter two projects could come from the remainder of $6 million the city borrowed from Citizen’s Bank to pay for Streetscape and the Lake Gerar bridge. Ferrese said he would likely recommend to the commissioners at the first upcoming budget meeting that the city use the remaining $3.6 million or so left in the loan to help pay for the upcoming projects. The city has until March 1 to get a 4.78 percent fixed interest rate on the loan.
Finally, Ferrese said he would be allocating money in the upcoming budget to begin the permitting process for an ocean outfall project. A joint outfall project between the city and the county is proposed, however, county officials want the city to chip in an addition $10 million toward the project.
Hogan said that for the most part, the city’s finances came in line with what was originally budgeted. In addition to his report, Hogan also made five recommendations to the audit committee.
The first recommendation was to have continuous budget amendments throughout the year to keep the budget up-to-date. Other recommendations included setting up a policies and procedures manual, establishing a city investment policy, keeping better inventory and updating property records.
The audit committee unanimously approved the city’s audit and will forward its recommendations to the city commissioners for approval.
Contact Ryan Mavity at ryanm@capegazette.com
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