Balancing act finalizes Frankford’s 2018-19 budget

FRANKFORD – With a final balancing act the town of Frankford has a balanced financial slate for fiscal year 2018-19 that began July 1.

The town’s water budget, which is separate from the general fund and police budgets, initially showed a $2,200 operating loss for the year. Council balanced that by reducing a maintenance budget line item by $1,600 from $55,500 to $53,900 and increasing water use charges by $600 based on anticipated increase in water use.

The water budget reflects implementation of a previously-approved 48-percent increase in the town’s water rate, from $8.75 to $12.68 per 1,000 gallons, and two months of lost revenue of that increase for July and August.

There also is an increase in out-of-town water user fee from $20 to $50 every two-month billing cycle.

Approved by the town’s five council members at a second budget hearing July 26, the general fund and police budgets combined have a net income $7,276, said Frankford councilwoman Velicia Melson, council’s secretary/treasurer, noting that includes repairs to town hall.

The general fund projected income is $283,820 with expenses $239,380 for a net gain of $44,440. The police budget, with income at $16,500 and expenses at $53,664 has a net loss to $37,164.

“It’s better than being in the hole,” said council president Joanne Bacon.

“It is better than being in the hole. However, we all know that we have maintenance that needs to be done at the water plant and water tower. And none of that is included in any of these budgets,” said Ms. Melson, who labeled it “a no-frills, bare-bones budget.”

Frankford presently has no active town police department. Instead, town leaders late last year opted for 12 hours per week coverage through a contractual agreement with Delaware State Police.

Town council plans to address at an upcoming meeting implementation of a credit card fee to recoup charges the town incurs from credit card companies for water users who pay their bills with a credit card in person at town hall. That was projected as a $1,600 expense in the 2018-19 water budget.

“I think it’s the right thing to do, to recoup your expense,” said town of Frankford property owner Kathy Murray, a who served on the town’s budget committee.

Customers who pay bills online via the town’s website are charged a fee.

Ms. Murray suggested council consider a percentage-based fee as opposed to a flat fee.

“It should be based on percentage because that is what you are going to charged. It’s not going to be money maker,” Ms. Murray said, adding the credit card fee should be reflected as an expense and income. “This is a fee that you are getting charged. You’ve got to show it and what you are going to do to offset it. My theory from accounting and budget planning, it’s already a known expense. By removing it and force balancing the budget is not the way to go. It is a definitive expense that you are going to get based on the value that the credit card company is charging to the town for processing. It’s a given expense for a definitive purpose. When you force-balance the budget that is wrong. You cannot from an audit standpoint force-balance a budget. It’s wrong.”

Council will zero in on a proposed rate fee, possibly three percent as was discussed at the budget hearing. Town council planned to address the credit card fee at its Aug. 6 meeting.

The 48-percent water rate increase was approved by town council more than a year ago to cushion projected a water revenue shortfall of $70,000 to $75,000 annually with Mountaire no longer utilizing town water for it feed mill operations at it Daisey Street plant.

Mountaire, which typically had accounted for about a third of the town’s water usage, drilled its own well that went into operation in January 2016. Frankford town council challenged that, which precipitated still-unresolved issues with Mountaire and DNREC that included possible loan forgiveness.

Fluoridation of the town’s water system and a feasibility study were included in an agreement stemming from the town of Frankford’s August 2016 appeal to the Delaware Environmental Appeals Board. The town’s appeal challenged the validity of DNREC’s approval of the well drilled by Mountaire Farms to supply high-volume needs at its feed plant operation without any sign-off authority from the town.

In February 2017, town council backed off on its appeal with 4-1 council approval to accept DNREC’s loan-forgiveness proposal that at the time totaled about $500,000. In return, the town was required to complete a feasibility study as well as install fluoride in the town’s water system.

With those issues unresolved, Frankford town leaders opted to enact the water rate increase.

“I know we needed a rate increase,” said Frankford resident Duane Beck. “It is just way too much for most people.”

“I understand,” said town councilman Gregory Welch, council’s water department liaison. “But it is what we had to do to get just to the black. Hopefully, we’re looking at other things. We did not implement it because we were hoping to get relief, or forgiveness and not have to implement it.”

Council’s vote on the budget was unanimous, with Ms. Melson, Ms. Bacon, Mr. Welch, Pamela Davis and Skip Ash voting in favor.

News Editor Glenn Rolfe can be reached at grolfe@newszap.com

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