STONE HARBOR – Stone Harbor Borough Council April 6 rescinded its 2021 budget it introduced three weeks earlier. The action followed two days of council budget hearings held, in part, because the introduced budget was in danger of not having the necessary votes to adopt it.
The borough April 6 introduced a new $19.1 million current fund budget that represented a decrease of $700,000 from the amount first proposed for 2021, during a Feb. 11 council meeting.
After two months of debate on budget issues, the rescinding of the first introduced budget, and a call on the council for reform of the budget process, the borough’s newly introduced 2021 budget still calls for an 8.15% increase in the local purpose tax rate and a 9.95% increase in the dollar amount to be raised by taxation.
3 Budget Proposals
The budget first proposed Feb. 11 called for $1.3 million in new spending and $2 million in local property tax revenues. By March 16, the date when the first 2021 budget was introduced, the total current fund budget was at $19.8 million, down about $250,000 from Feb. 11, which was enough for the borough to avoid the necessity of asking the state for a waiver of appropriation and levy caps.
Getting under the waiver threshold was not sufficient action for some on the council. The dissatisfaction with the first introduced budget and the 12.4% increase it proposed in the local tax rate was enough to endanger the budget’s potential adoption.
Two public budget hearings were held March 23 and March 24 in the council meeting room, with department heads defending all aspects of their expense budgets.
In the end, the new budget introduced April 6 drew almost 60% of its decrease in spending from one source, annual funding for beach and bay management – essentially beach replenishment and back bay dredging.
Funds for both bay and beach were reduced by $200,000 each, contributing $400,000 to the reduction in spending.
Property Owners Association
In a statement following the April 6 reintroduction of the 2021 budget, the Stone Harbor Property Owners Association (SHPOA) said of the reduction in beach and bay funding, “This reduction in 2021 funding will result in higher borrowing when expenditures are required, ultimately leading to higher taxation to repay the borrowings.”
The association reiterated its commitment to “robust funding for beach and bay management.”
SHPOA also welcomed the “reduction of the municipal tax rate reflected in the current budget draft,” a reference to the decrease from the tax rate first proposed in the February budget proposal.
The association noted “an increase of over 8% from the 2020 tax rate is still significant, especially compared to the tax increases in neighboring communities.”
The association has long pushed for a formal multiyear budget plan, especially in light of what it sees as the significant investments the borough will have to make concerning sustainability issues.
In a conversation after the March 16 introduction of the now rescinded budget, SHPOA President Rich Fuchs noted the association’s interest in having the borough examine more options for consolidating sharing of services.
Fuchs spoke of future investments the borough must make on flood mitigation, pump stations, beach replenishment, bay dredging and water conservation. With that in mind, the need for long-range planning and careful expense control is critical, he said.
Call for Change
At the April 6 meeting, Councilman Reese Moore said he would vote for the introduction of the current budget proposal, but he did so while listing six areas of concern.
He said he would formally move to have each of the six areas assigned for study and report to council by the borough administrator and the chief financial officer.
Moore’s six areas for study included:
Ways to improve the budget process.
Options for the structure and implementation of a 10-year budget plan, including capital expenditures.
Alternative options for trash collection that might preserve the borough’s “concierge service,” while also saving on cost.
Options making the beach patrol, including lifeguards and taggers, a self-funding entity, like beach utilities used elsewhere in the county.
A review of salaries and wages for public safety departments compared with other county municipalities.
Identification of additional revenue sources, including a possible resort visitor’s fee.
Mayor Judith Davies-Dunhour asked Moore to hold off making his motion until the next council meeting to provide time for consideration and formulation of the specific studies and reports outlined.
The reintroduced budget must be advertised in preparation for a public hearing and vote to adopt, which will most likely be held at May’s first council meeting.
At that time, the public should hear Moore’s motion and have access to the actual wording of the six areas of study that motion would place before borough officials.
Controversy remains over how the borough, with less than 2 square miles of land area and almost $5 billion in tax ratables, goes about the process of municipal budgeting.
To contact Vince Conti, email vconti@cmcherald.com.
