BERLIN – Berlin began its budget season this week with work sessions on public works, buildings and grounds, and parks and recreation, revealing a proposed salary increase of six percent and a small projected increase in tax revenue.
Town administrator Linda Bambary informed the Berlin Mayor and Town Council Monday evening that she used a three percent cost of living (COLA) increase in employee salaries to generate the working budget, adding that she would like the council to consider a four percent COLA.
Bambary also included step in grade increases of three percent in putting together the budget numbers.
The public works budget includes major street repairs on Grice, Vine and Graham streets. The town would take out a $1 million bond to finance those repairs.
“Those three are clearly long time existing [problem] streets, the worst shape in town,” said council vice president Gee Williams. “I think these are the last of the truly deteriorated streets in town.”
Grice, Vine, and Graham Streets have been on the repair list since at least 1996.
Mayor Tom Cardinale questioned why the projects couldn’t be funded from an existing revenue source. “Why can’t we use any of the money from the impact fee fund?” Mayor Tom Cardinale asked.
“Impact fees have to be used for growth,” said Bambary.
Impact fees are commonly used to widen and repair streets to accommodate more traffic.
“I’d just like to get something started,” said Cardinale.
Washington St. should be considered in the near future, said Bambary, because it is showing obvious signs of disrepair. Berlin’s parks need some capital improvements, Bambary said, but those are paid for with state funds.
“Capital improvements for the parks are typically not shown in the budget because they are funded by Project Open Space,” said Bambary. “We really don’t know what Project Open Space funds the parks commission will get so we usually do that with the budget amendment.”
The budget contains funds to improve plumbing and handicapped access at the town’s public restrooms and to add a mechanic shop for routine repairs and maintenance of town vehicles.
Revenue numbers are preliminary, but the town should get a couple hundred thousand more in tax revenue than last year.
“I’m trying to keep it within what our revenues have been,” said Bambary. “We may have more this year than we had.”
Other sources of funding are also uncertain.
“I’m not real sure what the county’s going to do with our discretionary funds,” Bambary said.
Worcester County has not made a decision on the Ocean City tax differential request, she said. If approved, the commissioners have said, a tax reduction for the resort would shift a much larger tax burden onto the rest of the county and greatly reduce county grants to the municipalities.
“That’s a dead issue,” said council member Paula Lynch.
The town could be getting less in property tax revenue with many new homeowners in town now eligible for the homestead tax credit.
“Your revenues might even fall off,” said Cardinale.
The constant yield tax rate, the tax rate that should generate the same amount of revenue as the previous year, is 67.6 cents this year, a conservative number, Bambary said,
“It’s in the same area it’s been for several years,” said Williams.
“It’s not good times out there and the folks that are going to be paying our taxes are not looking at a six percent salary increase,” Lynch said.
The Berlin town council will hold a second budget work session. On Mar. 24, before the regular Town Council meeting.