Facing tourism unknowns, Rehoboth set to OK budget

Rehoboth Beach commissioners are in an unprecedented position.

Because of the coronavirus, all city meetings are cancelled through April, except for one – a one-item commissioner meeting Friday, March 20, to pass next year’s budget. The public is not allowed to attend.

During a March 9 budget meeting, commissioners reached consensus to approve a $27.5 million budget, a 13 percent increase over the current $24.3 million city budget. But that was before the coronavirus chaos took over the nation and Delaware.

In an email March 13, Mayor Paul Kuhns said at this point in time, there is no way to know how COVID-19 will impact the city's budget, so there is is no effort in place to have city staff re-evaluate next year’s budget proposal. 

“There are just too many unknowns,” he said.

Commissioner Ed Chrzanowski supported Kuhns’ opinion, saying he’s been talking with rental agents, hotels, Rehoboth Beach-Dewey Beach Chamber of Commerce and Rehoboth Beach Main Street, and he believes there is an opportunity for this to be the best summer ever in Rehoboth because it’s a drive-to destination rather than a fly-to destination.

That said, said Chrzanowski, in an email March 13, it’s going to get worse before it gets better, but there will still be the whole summer ahead.

“We remain at low risk, but must take precautions to stop the spread,” he said.

During the budget workshop, City Manager Sharon Lynn presented commissioners a proposed budget with revenue projections for the city’s general fund at approximately $17.5 million. Between meter and permit parking, parking fines, a new hotel tax, a rental tax and other miscellaneous items, nearly $10 million of general fund revenue is tourism-related.

The proposed budget also shows roughly $10 million in revenue in water and wastewater funds. A majority of the usage, and revenue, of those two systems happens from April to September, when tourists are in town. 

According to documents prepared for the workshop, the budget includes $5.5 million in capital improvements, almost half of which, $2.2 million, is being spent on the streets and refuse department. Among the expenses that fall under that department are citywide paving, Phase II of Lake Avenue streetscape, stormwater and sewer line assessments and repairs, a new street sweeper, and an LED retrofit project.

Also falling under the umbrella of the streets and refuse department is the $280,000 the city agreed to put toward the canal access dock project. The recent workshop was the first since commissioners approved the money in late February, and Lynn had modified the budget by approximately $369,000. Revenues increased by $300,000, including $250,000 in parking meters and $50,000 in building permits. Expenses decreased by $69,000, reduced by $20,000 in advertising and $49,000 in the city’s contingency fund.

In addition to the funding for the dock, the budget now includes $87,000 for security measures at the front desk of city hall. Lynn said staff had for two years recommended installation of a glass wall at the front desk. She said it had been a part of city hall’s original design, but had not been installed.

Rehoboth Beach Police Chief Keith Banks said some of the front desk staff have reported feeling unsafe. He said the parking building already has something similar.

Commissioner Lisa Schlosser was not in favor of the glass window. Putting up a barrier seems to be sending the wrong message, she said. Commissioner Ed Chrzanowski said he agreed with Schlosser, while Mayor Paul Kuhns and Commissioners Susan Gay, Pat Coluzzi and Steve Scheffer said the expense is something municipalities have to accept in this day and age.

It’s much better than installing metal detectors, said Kuhns.

As proposed, the budget includes $830,000 from the sale of city property. A significant majority of this revenue is from the sale of a city-owned property at 84 Kent St. The house was the longtime home of  Kiwanis Club of Rehoboth Beach, later renamed Kiwanis Club of Coastal Delaware.

The proposed budget includes 2 percent raises for all employees. Police officers will see a 3.5 percent raise, plus any step increases.

The budget meeting is scheduled to take place in the commissioners room of city hall, 229 Rehoboth, at 3 p.m., Friday, March 20, and will be available to watch at cityofrehoboth.civicweb.net/Portal/.