By Rob Kunzig | Feb 23, 2010 | Cape Gazette
Dewey Beach officials say the town performed a million-dollar budget turnaround, emerging from 2009’s $700,000 shortfall with more than $300,000 in its coffers.
The budget and finance committee convened Feb. 12 to discuss the calendar year-end financial status and plot the course for coming fiscal year, which begins Thursday, April 1. After committee Vice Chairman Don Ziegler read off the numbers, he congratulated the town for conquering last year’s $722,000 deficit.
“Thanks to a lot of hard work from the staff and the chairman,” Zeigler said.
Dewey owes its surplus to staff frugality and a few surprise revenue boosts. Town employees kept hours in check and trimmed expenses. Transfer tax revenue gleaned from the sale of Marina Suites condos and a new accommodations tax on rental properties yielded a combined $350,000, said commissioner and committee Chairman Marc Appelbaum.
But the biggest cash saver was information, he said. In past years, Appelbaum said, profit-and-loss reports came late and incomplete. Inefficiencies abounded. By the time officials realized they faced an abyssal deficit in late 2008, Appelbaum said, they were powerless to reverse course.
“There was very little accountability,” Appelbaum said. “A lot of money slipped between our fingers.”
In 2009, the budget and finance committee ensured reports were timely, accurate and informative, Appelbaum said. The committee tracked trends as they developed, warning commissioners about snowballing legal fees and praising police for keeping payroll in check. Appelbaum said he gave police Chief Sam Mackert autonomy in developing his budget, letting him take ownership of any resultant surplus or deficit.
“You empower people, and they take more pride,” Appelbaum said. “He did a tremendous job managing the process.”
Appelbaum also said the turnaround was incomplete, pointing to administrative overruns. Despite early awareness and warnings from the committee, Dewey exceeded its budget for nonlitigation legal fees by almost $50,000.
It was a busy year for town attorney Glenn Mandalas – in 2009, Dewey submitted four charter changes to the General Assembly and was hit with four lawsuits – but Appelbaum said the town still must reduce its legal bills.
“For the most part, it’s a controllable expense,” Appelbaum said.
The committee is looking for a repeat performance in the coming fiscal year, tentatively aiming for a net surplus of $350,000. But new Town Manager Diana Smith thinks that goal is a bit too ambitious. Last year’s savings came from sacrifices made by town employees, she said, and before Dewey commits to a number, the town’s workers should be compensated.
“They took some very hard hits,” said Smith, who started work Feb. 1. “No raises, no cost of living adjustment. I would ask you not to take such an aggressive stance right now.”
Rewarding employees after a lean year isn’t just an issue of fairness, she said – it’s an investment in the town’s future.
“I want to be able to move this town forward,” she said. “And there are some places where we’re going to have to spend some money.”
Smith eventually agreed to a tentative savings goal of $350,000. Committee member Steve Huse was similarly reluctant. He agreed with Smith – the town’s windfall should be put to use rather than socked away.
“Our surplus is too high,” he said.
Now that Dewey has emerged from a crisis year, Appelbaum said employees can expect the government to reevaluate their pay scale.
“Our employees are a tremendous asset,” Appelbaum said. “And they should be looked out for. They should be rewarded.”
While he insisted that Dewey has cost overruns to rein in, Appelbaum said he takes immense pride in the town’s recovery. While neighboring towns stare down continuing deficits, Dewey can now turn an eye to the future.
“We had to do better,” he said. “We had to do much better. And we did.”