Rehoboth commissioners got their first look at next year’s budget, and while it’s balanced, it provides only $512,000 for the city’s $4.9 million capital improvement plan.

Rehoboth’s annual budget runs from April 1 through March 31. City Manager Sharon Lynn presented commissioners with a $21.4 million budget Jan. 7, that shows a $41,300 surplus when $611,000 in anticipated additional revenue from the city’s water and wastewater funds are included.

Lynn said among key issues is a $482,000 upgrade to the city’s parking department equipment – new Parkeon meters, new pay stations and license plate recognition technology.

Lynn said the parking upgrade is a must because the city’s current contract has expired. Commissioners gave Lynn permission to move forward on the parking technology.

The proposed budget includes a 2 percent pay raise for full-time employees, permanent part-time staff and seasonal employees. City spokeswoman Krys Johnson said this has an estimated expense of about $100,000.

There is a proposed $25 increase in residential trash per season – in-season, from $250 to $275; out-of-season, $275 to $300. Johnson said this is expected to generate approximately $64,000 in revenue.

Lynn has proposed no increases in property taxes.

As of right now, not funded in the CIP are $770,000 in stormwater upgrades for Wilmington, Delaware and Bayard avenues; $450,000 for the citywide paving program; $200,000 for Lake Avenue streetscape; and $470,000 in drainage improvements for North First Street.

Public Works Director Kevin Williams said he would like to begin a systematic replacement of the aging water meters. He said he would like to see 300 to 400 meters replaced a year, and he estimates it would cost $200,000 a year.

Williams also pointed out the budget does not fund renovations to city restrooms near the Boardwalk or converting a handful of foot showers to shower towers – estimated at $761,000. Williams said the contractor who estimated these renovations said the work could be done over time.

Rehoboth Police Chief Keith Banks said there’s a proposed increase in seasonal officers from 24 to 32. He said these officers would be used to increase the department’s presence on the Boardwalk.

The next scheduled budget meeting will begin at noon, Friday, Jan. 18.

Wastewater and water rate increases

Not included in the budget are increases to wastewater and water rates to pay debt, deferred maintenance and capital improvements. In addition to paying for the $42 million outfall, the city engineer has recommended roughly $4.8 million in improvements to the city’s water system and roughly $12.4 million more in improvements to the city’s wastewater system through fiscal year 2023.

Lynn said rates for wastewater have not been changed for a while and to cover the debt they need to be increased. She said a controversial rate study by the Massachusetts-based Abraham Group is valid, and city officials need to take a hard look at the 60 percent increase it recommends for wastewater. City residents say the study is flawed.

Mayor Paul Kuhns agreed with Lynn. He said the city needed to focus on the rate study as the direction to follow. If it’s not going to be a 60 percent increase, what’s it going to be? he asked. He noted residents should also expect a 30 percent increase in water rates in the coming year.