Taylour Tedder takes the reins in Rehoboth Beach

Shrouded in a cloud of controversy, new Rehoboth Beach City Manager Taylour Tedder participated in his first commissioner meeting May 17. His first day on the job was May 15.

“I am excited to begin my new role this week in Rehoboth Beach, and I do look forward to the opportunity to work with staff, elected and appointed officials, residents and business owners,” said Tedder. “I am eager to roll up my sleeves and demonstrate that the city made a strong, sound decision in hiring me as the new city manager.”

People are passionate about maintaining Rehoboth Beach’s unique status as the Nation’s Summer Capital and the hometown charm of the community, said Tedder.

“I look forward to getting to know this community and its stakeholders, and to helping create an even more efficient, responsive and well-run local government,” said Tedder.

The controversy surrounding Tedder is related to his contract. Described by municipal government industry insiders as groundbreaking, commissioners agreed to pay him an annual salary of $250,000 and provide a $750,000 interest-free house loan that will be forgiven in full if he remains city manager for seven years. The hiring of Tedder was announced just weeks after city commissioners approved a nearly $40 million budget that included an increase in property taxes, parking rates, rental taxes, wastewater meter fees and a future increase to mercantile license fees to close a deficit in excess of $4 million.

Mayor Stan Mills introduced Tedder.

“He’s jumping right into the hot sand as the summer season is upon us, but we are confident Taylour is up to the challenge, and we look forward to working with him through the season and many more to come,” said Mills. “I know that citizens are eager for an opportunity to meet with and chat with City Manager Tedder, and so the city will host a welcoming reception with a date and time in the near future.”

Tedder’s groundbreaking contract was not discussed during the meeting, but Commissioners Patrick Gossett and Tim Bennett took the opportunity to insist the city is in good financial standing.

In advance of their comments, Assistant City Manager Evan Miller, who served as interim city manager while commissioners found the last two city managers, said he wanted to clarify some misinformation that’s out there about the city’s approved budget. The draft budget presented showed a potential deficit, he said. There was also a plan to increase revenue and decrease expenses to balance the budget, he said.

“This revenue generation and expense reduction plan was introduced at the very first budget meeting,” said Miller, who then went on to explain how, due to reserves and excess fund balances from previous years, if the city didn’t bring in another penny for six months, all the city’s bills could still be paid. “We have received comments that the city is broke, which could not be further from the truth.”

At this point, Bennett asked Miller if the city was broke. Miller said no. Then he asked Miller if the city was bankrupt. Again, Miller said no. Then Bennett repeated these two questions two more times.

“We need to hear it three times,” said Bennett.

Gossett then addressed the room. The city does not have a deficit and never did, he said.

“The city has always operated on a balanced budget, and this year is no different,” said Gossett.

The reason for the potential shortfall, said Gossett, was to increase staffing to meet the current level of city services, provide employees with a compensation package that’s competitive with the current market, address significant increases in insurance, and fund capital improvements. Commissioners decided to preserve city reserves – about $20 million in the general fund, about $12.7 million in the water fund, about $7.8 million in the wastewater fund – for emergencies rather than use them to offset a potential shortfall, he said.

Increases are spread evenly across all those who use city services – residents, visitors and businesses, said Gossett.

Gossett and Bennett’s comments were made during the opening portion of the meeting, so the public couldn’t respond. However, two members of the public did speak on the subject of the budget during the public comment portion at the end of the meeting

Suzanne Goode, residential property owner and a candidate for city commissioner, said she hadn’t planned on speaking until the previous comments. Yes, the budget is balanced, but both taxes and fees were raised, she said.

She said it’s been hard to watch the increases in spending that have been taking place over the past few years. There shouldn’t be shock when people feel like commissioners haven’t been practicing fiscal prudence, she said.

Kathy Newcomb of Derrickson Properties LLC said commissioners strongly opposed the suggestion that funds would be taken from reserves, and the city solicitor advised that if taken, the funds would need to be replenished. Yet, she said, by April commissioners had unanimously agreed to take $750,000 from the general fund for the new city manager loan, which is a forgivable loan and means the funds will not be replenished.

Commissioners are upset that the media is reporting that the town is in financial trouble, said Newcomb. However, she said, just to balance one year’s budget, there was a negative impact on property owners with the tax increase, a negative impact on businesses by increasing licensing fees, a negative impact on travelers by increasing the rental tax and a negative impact on employees by raising all parking fees.

“That portrays things are not financially OK in the City of Rehoboth,” said Newcomb.