RACHEL RAVINA/BAYSIDE GAZETTE
Finance Director Natalie Saleh explains the breakdown of the general fund revenues for the fiscal year 2020 budget during a Berlin Town Council meeting in June.

By Rachel Ravina, Staff Writer

(Dec. 26, 2019) The Berlin mayor and Town Council approved a $15.2 million budget for fiscal year 2020, but getting to that final vote involved one of the most tumultuous budget processes in years.

“This has been a challenging budget cycle – that’s an understatement,” said Mayor Gee Williams about the need to raise revenue and lower costs to restore the town’s financial reserves.

At the heart of the problem was a sewer utility that had been losing money for years because rates were too low. But rather than raise the rates, the town propped up the utility with money borrowed from the town’s general fund reserves.

Those chickens came home to roost this year, with Williams and the council that much higher sewer rates and a major property tax increase would be needed to right the ship.

Reacting to howls of protest, town officials began slashing at the budget.

The parks and recreation department decreased by 36.84 percent, the police department was cut by 11.02 percent and the economic development department’s budget decreased by 18.24 percent.

Councilman Thom Gulyas urged residents to attend meetings and voice their concerns.

“There’s five of us [on the council] and the mayor – five people to make the decisions … but if no one shows up … we figure you guys are happy, ” Gulyas said.

Gulyas said the town has been covering utility losses with money from the general fund for several years now, and the blame rests on the mayor and council.

Resident John Watson voiced his frustrations about the situation during a budget meeting.

“You’re the ones that got us into this mess and now you’re putting it onto us to get you out of it, and I think that’s very unfair,” Watson said. “I’m upset and I’m not happy. And I don’t mean this as a threat … but elections have consequences.”

The general fund had about $6.2 million approved for fiscal year 2020 as opposed to the roughly $7.2 million for fiscal year 2019, according to budget reports. That’s a 13.80 percent decrease.

The water utility rate went up to 5 percent, and the sewer utility’s rate rose by 25 percent for the fiscal year 2020 budget.

“These increases are needed to ensure these three utilities no longer need to borrow from the general fund to support their operations,” Williams said.

The town’s water fund budget decreased by 18.79 percent for fiscal year 2020, according to budget reports. There was about $1.2 million approved for fiscal year 2019 and nearly $916,000 approved for fiscal year 2020.

The sewer fund budget decreased by 7.72 percent, or about $200,000, budget reports show. There was about $2.6 million approved for fiscal year 2019 and approximately $2.4 million for fiscal year 2020.

Berlin’s electric utility’s budget decreased by 7.12 percent, according to budget reports. There was about $5.7 million approved for fiscal year 2019 and about $5.3 million approved for fiscal year 2020.

The stormwater fund budget for next year also decreased by 71.69 percent, or about $1.2 million. There was about $1.6 million approved for fiscal year 2019’s budget and nearly $455,000 approved for fiscal year 2020.

Property tax rates were also a contentious issue during the fiscal year 2020 budget session. At the beginning of budget discussions, officials anticipating increasing them anywhere from 20 to 34 percent.

“I was outraged when I heard that Berlin may increase their taxes up to 34 percent … and possibly raise their sewer and stormwater rates as well,” said resident Jason Bratten. “If there is an increase, it should be in phases from at least three-to-five years … not all at one time.”

Resident Jim Meckley said a recent budget listening session at Stephen Decatur High School drew about 200 people, many of whom many told heart-wrenching stories about how increases could affect them.

“People cried,” he said. “And mayor, at the first work session, you sit down and open your meeting and ask for a 29 percent raise. [That’s] irresponsible.”
Williams proposed a 20-cent increase in the property tax rate, from 68 to 88 cents per $100 of evaluation, for both residential and commercial properties.

The tax increases would also amount to a $600 increase on the annual tax bill for a home assessed at $300,000.

Representatives of 50 Berlin businesses signed a letter written by Salt Water Media owner Stephanie Fowler, who read the letter to the town officials during the public comment portion of the meeting.

“We are here because we see the incredible potential of this town,” Fowler said in the letter. “You have asked for our input and claimed that our absence from Town Hall is a silent approval. Let us fix that now: we are asking that you do not make it harder to live and work in Berlin.”

“The residents deserve better. The business owners deserve better,” Fowler said in the letter. “Please do better.”

The Town Council agreed the 29 percent tax rate, or $.88 per $100 of assessed value, introduced during an April 22 council meeting was too high.

“It was a good place to start and got everybody to pay attention,” Williams said.

The proposed, and eventually agreed upon rate, would come out to $.80 per $100 of assessed value for the upcoming fiscal year, according to Williams. Fiscal year 2021’s rate is “to be determined.”