City residents could see a 45.2 percent trash fee increase and a 3 percent property tax increase for the 2013 fiscal year as city officials seek to close a 2013 fiscal year budget shortfall now estimated at $801,700.

City residents could see a 45.2 percent trash fee increase and a 3 percent property tax increase for the 2013 fiscal year as city officials seek to close a 2013 fiscal year budget shortfall now estimated at $801,700.

The budget shortfall for 2013 was estimated at $3.4 million as recently as November, and it was then cut in half to $1.7 million in March.

City Manager Scott D. Koenig and City Controller Donna Mitchell presented Dover City Council Tuesday night with the tax and fee increases as well as cuts in staff that would pare back that anticipated deficit. They presented Dover City Council with their preliminary $38.1 million 2013 fiscal year general fund budget at the first of three budget hearings scheduled for this week in City Hall.

The city could increase its base trash collection service fee from $11.70 per month to $17 per month in order to raise $487,110 in additional revenue, Koenig told Dover City Council. In comparison, private vendors such as Allied Waste and Independent Disposal charge $27 and $26 per month, respectively, while Kent County charges $21 a month, he said.

In addition, the city tax rate would increase 3 percent to $0.3478 per $100 of assessed property value, Koenig said. This proposed tax increase would amount to 1 cent per $100, a yield of $314,600.

Koenig said the city was willing to make some tough decisions before asking residents for a tax increase and trash fee increase. Namely, he proposed eliminating 15 full-time positions, bringing the city’s full-time staff to 347. That included the 12 vacant positions Koenig proposed eliminating at council’s financial retreat in March as well as the outright elimination of the Economic Development Office and its three staff members.

The more aggressive approach to eliminating the Economic Development Office was stronger than the “soft landing” approach that Koenig had pitched to the Legislative, Finance & Administration Committee in the winter. Namely, he had proposed reassigning Economic Director William Neaton as an economic development coordinator with the city’s Department of Planning and two staff members to one vacancy in Human Resources and one to a vacant mailroom position, respectively. That idea never made it out of committee.

The Economic Development Office was created in 2008 along with the Downtown Dover Partnership, with the director spending half his time with the latter group.

Koenig proposed laying off the three members of the economic office three months into the fiscal year, effective. Oct. 1. The city will have paid $249,700 in personnel and economic development by the end of the 2012 fiscal year on June 30, the budget states. In Koenig’s proposal, the city would pay $180,600 for economic costs, including $35,000 to the Kent County Economic Development Office, $15,000 to Kent County Tourism and $80,000 to the Downtown Dover Partnership, should agreements be made with those groups to fill the void with regard to economic development.

The $80,000 would be adjusted down to $60,000 since the city would only direct funds to the Downtown Dover Partnership for nine months out of the year, Koenig said.

To further bolster general fund revenues, Koenig also proposed a policy change to allow for a fixed $8 million annual transfer of revenue from the cash rich electric fund to the general fund. This fixed amount would change from the current 8 percent payment made, per city financial policy, Koenig said. The $8 million for 2013 would be an increase of 1.6 percent compared to 2012, when $7.876 million was transferred from the $99 million electric fund to the general fund.

Councilwoman Beverly L. Williams took umbrage with the plan to increase the amount transferred from the electric fund.

“We are literally picking apart the city’s savings account that was put together during the Duke years,” she said. “Scraping your savings account is not the preferred method of staying fiscally solvent.”

Meanwhile, Dover’s electric utility rate would likely be reduced for rate payers, Koenig said. The city would have a more clear understanding of what the rate for next year would be after a meeting next week with the Burns & McDonnell consulting firm, he said.

Six-year history of Dover residents’ taxes*

Fiscal year         2007       2008        2009        2010         2011 2012
City of Dover     $0.3300  $0.3300   $0.3300   $0.3300   $0.3378  $0.3378
Kent County      $0.2500  $0.2500   $0.2500   $0.3100   $0.3100  $0.3000
Capital School  $1.4590   $1.5340   $1.4800   $1.5435   $1.7685  $1.8320 
Polytech School$0.1180  $0.1160   $0.1219   $0.1219    $0.1304  $0.1351

Total taxes       $2.1570   $2.2300   $2.1890  $2.3054   $2.5467   $2.6049

*Rates are paid per $100 of assessed property value. Dover city residents have seen their city, Kent County and school taxes combined rise nearly 21 percent in the last six years, fluctuations notwithstanding.

Source: Dover Tax Assessor’s Office and the Kent County Tax Office