Rehoboth Beach adopts $44 million budget for fiscal year 2026; no increase in taxes, rates fees

March 21, 2025

The Rehoboth Beach Board of Commissioners adopted today an approximately $44 million budget for fiscal year 2026, which begins April 1. This $43,993,060 budget, which is $5.4 million larger than the city’s 2025 budget, requires no increase in taxes, rates, or fees.

The city’s FY26 budget includes $28.3 million in general fund expenses and approximately $15 million in its enterprise water and wastewater funds. Across those expenditures, about $11.4 million is dedicated to capital improvements. There is an anticipated $222,735 surplus in revenues over expenses in Rehoboth’s FY26 budget.

“The City of Rehoboth Beach’s overall strong financial position is reflected in our fiscal year 2026 budget,” says City Manager Taylour Tedder. “The newly adopted budget provides for several critical capital improvements and modest salary and benefit increases for our employees, all with a small, anticipated surplus. This year, we began to expand our budget projections and look further into the future as we plan for the city’s needs today.”

City employees will receive a 3% cost-of-living increase in FY26 in addition to an up to 3% merit increase for eligible employees. The city also extended coverage of employees’ health care costs from 90% to 100%; dependents will continue to be covered at an 80% rate.

The city’s budget provides contributions to support several community organizations:

$250,000 for the Rehoboth Beach Volunteer Fire Company
$75,000 for the Rehoboth Beach Public Library
$60,000 for Rehoboth Beach Main Street
$50,000 for the Rehoboth Beach Historical Society and Museum.

Among the capital improvement expenses in this year’s budget are:

$4.7 million to finish phase 3B and begin phase 4 of improvements to the wastewater treatment plant facility
nearly $2.5 million for completion of the Baltimore Avenue restroom/beach patrol facility
$585,000 for the annual city paving project, this year on Christian and Munson streets
$400,000 for stabilization of the Grove Park Canal Dock
$350,000 for replacement of the water main on Munson Street between Scarborough and Bayard
$257,680 for a new hook hoist container truck
$105,000 for LED retrofit of lights on Rehoboth Avenue
$100,000 for sidewalk improvements
$80,000 for a shed to store police equipment
$47,000 to replace the HVAC, heat pump, and tables at the convention center.

The city anticipates higher revenues from property transfer taxes, parking, building permits, and rental taxes in FY26.