Fenwick Island
Delaware

The summer of 2026 has arrived and there are a lot of family fun activities ready to enjoy as well as happenings around Town.  Here is the latest from the Town of Fenwick Island.  

 

FENWICK ISLAND PREVAILS IN SUIT FILED BY ACLU BUT MORE CHALLENGES AHEAD TO MAINTAIN VOTING RIGHTS IN TOWN ELECTIONS FOR TRUSTS AND LLCs.:

The ACLU sued the Town of Fenwick Island in December and was challenging our election process for Town Council elections.  As set forth in our Charter, artificial entities (LLCs, LPs and trusts) are granted to the right to cast a vote in our town elections under our one person/one entity/one vote principle.  Asserting that they were targeting “corporations” but also entangling family trusts set up for estate purposes, the ACLU alleged that allowing artificial entities to vote could dilute our voting outcomes and was “unconstitutional.”

By way of background, our Charter was amended in 2008 to allow artificial entities to vote in our Town elections due to the number of property owners that were setting up trusts for estate purposes and under the belief that every property owner who is subject to our Town taxes and ordinances should have a say in electing our Town Council.   Artificial entities cannot hold office on our Council, cannot vote in federal or State elections and are only given one vote regardless of how many different properties they own. 

 Our Charter amendment granting voting rights to artificial entities was unanimously enacted  by the Delaware State legislature in 2008 and no one voting in Fenwick Island ever challenged the process.  While there are other Towns with similar election provisions and the State of Delaware enacted the Charter provision years ago, the ACLU decided to pursue an action against us.  We defended and filed a Motion to Dismiss the Complaint. 

Delaware Superior Court Judge Craig Karsnitz granted our Motion to Dismiss the ACLU action and ruled that our voting process was constitutional.  The ACLU has now appealed to the Supreme Court of Delaware. 

In May, the Delaware legislature, with the Governor’s public urging, initiated a constitutional amendment to prohibit all artificial entities from voting in any election in Delaware, including ours.  To be successful, the legislature would have to approve the amendment in two successive legislative sessions.  At the time of this writing, the House passed the amendment and it has been referred to the Senate.  

We have a little over 900 registered voters for our Town elections.  Approximately  219 are artificial entities that are afforded one vote to be exercised by a person through a Power of Attorney.  Of the 219 artificial entities that are registered, the vast majority are trusts set up for estate purposes that own properties within the residential zone.  Less than 15 of the artificial entities are “businesses” who own property within the commercial district of our Town.   As we have a one person/one entity/one vote provision, regardless of the number of properties an artificial entity may own, the entity is granted only one vote.  So, if an entity owns one property, there is one vote and if the entity owns 10 properties, there is one vote: one person/one entity/one vote. 

What does this mean for you? If you own property through a trust or corporation and are not a full-time resident, please stay tuned. Delaware appears poised to prohibit you from voting in our Town elections. Senator Hocker and Representative Gray understand our position and are actively advocating to protect our voting process; however, the majority party in Delaware appears focused on passing a Constitutional Amendment which would eliminate your vote. We will continue to try and protect it.

 

As of April 30, the town’s overall cash balance was $3.98 million, which was a decrease of $120,000 from March 31. Payroll expenses will increase in late May as the town brings on the summer lifeguards. Through April 30, overall revenues and expenses are in-line with expectations with the exception of higher than anticipated legal expenses due to the recent ACLU litigation. RTT revenues for April were about $58,000, which is a rebound from the slow winter months.  

YTD RTT revenues are now $323,000 or 92% of the annual budget. The town remains on target with its forecasted cashflows. 

 

The Budget and Finance Committee has approved the FY2027 budget and has sent it to Town Council for adoption.  Given the slowing of  RTT revenues and increases in the cost of staff salaries and benefits, the Budget and Finance Committee is recommending to Town Council to implement a tax increase of 4 cents from .174015 to .214015 per hundred dollars of assessed value, the first tax increase since 2002.  In addition, the Budget and Finance Committee is recommending increasing the long-term rental rate from 4% to 7.5% which would be consistent with the short-term rental rate.  

The historical background that was considered by the Budget and Finance Committee in making these recommendations: (1) payroll and benefits represent 74% of total town operating expenses and these expenses have been rising each year; (2) when comparing the FY2027Budget with FY2022 actual results, overall expenses have increased by $860,000. Salaries/health insurance/benefits represent $670,000 ($490,000 for salaries and $180,000 for insurance) of that total increase with General Insurance ($46,000), Trash services ($37,000) and IT support ($33,000) representing the other large increase. Over that same time period, salaries and benefits for the Police Department increased by $274,000 along with a $139,000 increase in the Lifeguard Department. This represents $412,000 of the $670,000 previously mentioned; (3) during the Fenwick Island FY2022 Budget discussions, the then Town Manager strongly recommended a tax increase in either FY2022 or FY2023 due to rising salary costs that was exceeding taxes collected; and (4) in each of the ensuing years, Town Council intentionally delayed raising property tax increases and due to the favorable real  estate market chose to rely on RTT revenues (fees collected from property sales) and new home construction/renovations permit fees for as long as possible to provide adequate cash reserves to offset the continued cost increases (salaries, health insurance, and general insurance).

The Town has not raised property taxes since August 2002 (24 years ago) even though other towns around us have had several tax increases.  Examples include:

o   One local beach community increased property taxes by 100% in 2008 and has had seven additional increases since 2010 which totaled 24%. Cumulative increase in last 18 years of 124% (without the impact of compounding interest).

o   Another local beach community recently increased their property tax revenues by 55% in FY2026.

 

We have now reached the point where the rising costs of salaries, benefits and insurance have outpaced the RTT revenues.  While raising property taxes is never an easy discussion, it is certainly not considered in this case without good cause.   The decision of the Budget and Finance Committee to recommend the tax increases was unanimous and Town Council will consider accepting the recommendation of the Budget and Finance Committee as proposed at the June 26, 2026, Town Council meeting.  

 

INFRASTRUCTURE /FLOODING UPDATE:

Bayside flooding is one of our biggest priorities for the Town. We hired Straughan Environmental to create a Comprehensive Engineered Master Resiliency Plan for the Town and to define engineered methods of mitigation, recommend proposed demonstration projects, develop concept designs for the demonstration projects, prepare final design plans with cost estimates, and prepare bid documents for the high priority demonstration projects. We hope to have the Comprehensive Engineered Master Resiliency Plan completed by Straughan Environmental by the end of 2026 and it will provide the next set of tools and insight for taking the additional steps for mitigating bayside flooding and planning for resiliency.

 

Public Works continue to maintain the valves that have been installed in the drainage pipes and to clear debris from pipes. If you believe that the valves are not working or that the pipes are not open, please contact Town Hall to report. You can access updates on maintenance/inspection and repairs to the pipes on our website, under the Departments-Public Works—Discharge Replacement Plan at  https://fenwickisland.delaware.gov/files/2025/09/DISCHARGE-REPLACEMENT-PLAN-2025.pdf. Please keep in mind, in the event of high tides, the valves and pipes cannot assist until the tide recedes. Our Town on the bayside is flat and almost at sea level so there is not enough “fall” for the pipes to be effective while the tide is high. 

We have also repurposed some “NO WAKE SIGNS” that we place throughout Town in problem areas to remind drivers to travel slowly through the road when there is flooding so as to not create a wake that can enter homes. 

 

MARYLAND OFFSHORE WIND PROJECT UPDATE:
The future of offshore wind along our coast is still UNCERTAIN; however, the Delaware legislature continues to move forward with plans to permit the wind companies onto our coast. 

The battle is now being fought in the Courts. There have been a lot of filings, motions, rulings and appeals and some disappointing decisions at the state level.

In Delaware actions, we have participated in filing appeals challenging the permitting process by DNREC that approved connecting the cables by jet plowing through the Indian River Bay, raising concerns about the negative impacts on the environment, including the inland bays, tourism and property values, as well as DNREC’s failure to adequately follow its own regulations in approving the project.   Document exchanges have revealed that the Center for Inland Bays had deemed that jet-plowing through the Indian River Bay was the “worst option” and would have a significant negative environmental impact. Former Attorney General and Judge Jane Brady and Stephanie Ballard Wagner represent the Town, as well as other appellants, without charging legal fees.  These cases are still pending. 

We also joined Sussex County in challenging the State of Delaware in passing SB159 that circumvented Sussex County’s denial of US Wind’s request to build an electrical substation at the old Indian River Power Plant.   We argued that SB159 ignores generations of legal precedence known as “home rule” which empowers local jurisdictions to implement zoning decisions that are best for its constituents. Former Attorney General and Judge Jane Brady and Stephanie Ballard Wagner again represented the Town and Sussex County gratis. Unfortunately, the Court of Chancery ruled that the State was entitled to “reclaim” their zoning power and issue the permit.  We joined with Sussex County in appealing the decision and the Delaware State Supreme Court affirmed the Chancery Court ruling.  

On the federal level, we are a party with Ocean City and others in challenging the issuance of the federal permit.  The government (BOEM—Bureau of Ocean Energy Management) filed a Motion to Remand and Vacate the permit that was issued by their agency, citing an error in assessing the ecological, economic and national security impacts when the permit was issued; however, the lower Court denied BOEM’s request.  In the same action, the Court denied US Wind’s motion for a preliminary injunction to block the federal government from reviewing or potentially revoking the permits, basing the ruling on the fact that BOEM had not yet revoked the permits making the issue not yet ripe for judicial intervention. So, the case proceeds with further discovery, argument, and briefs.   In the meantime, the Trump administration has been buying back a number of the leases; however, no word on whether the administration will do so with the permit issued to U.S. Wind for the project that will affect us. 

 

ENVIRONMENTAL COMMITTEE UPDATE:

The Environmental Committee has been remarkably busy getting Fenwick ready for the summer season.  We held the formal dedication of the Faucett Okie Family Nature Preserve in May.  In addition, the Town received a grant to create a pocket forest in the preserve and plantings were put in place in April.