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Proposed Sussex budget focuses on sewer

Cape Gazette of Lewes, Delaware

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Building-related revenue predicted to level out

Take away about $50 million in construction in Sussex County sewer districts, and the county's proposed fiscal 2011 budget of $140 million would look a lot like the current year's budget.

The 9 percent increase from the 2010 budget can be tied di-recdy to projects in most of the county's 23 sewer districts, thanks to funding from the American Recovery and Reinvestment Act. The increase follows two years of decreases averaging about 7 percent.

The proposed budget reflects the second straight year the county expects to finish out of the red. From 2007 to 2009, the county ended the fiscal year with deficits averaging $3 million. Expenses have dropped from $66 million in fiscal 2007 to a projected $47 million in fiscal 2011. Revenue has dropped from $63 million to $47 million during the same time period.

"It's comforting to know that our Sussex County government is able to work within its means, without raising taxes or cutting essential services," said Council President Vance Phillips, R-Lau-rel. "Once again, Sussex taxpayers are the big winners in this budget."

For the 21st consecutive year, county residents will not see a property tax increase. The average county homeowner pays $105 in county taxes. Residents in manufactured homes pay an average of $40 per year, some of the lowest property taxes in the nation Those numbers do not include school taxes.

County Administrator David Baker said the county has a history of conservative budgeting, and the current budget is a direct re-flection of that philosophy. "We've had to reduce in response to the economy and change the way we do business," Baker said.

Some county sewer customers will see a small increase in annual service fees as the county implements a uniform service charge for many of its 59,000 sewer customers and pays for overdue work needed to repair and replace equipment, said Finance Director Susan Webb. Increases range from $8 to $15 a year.

About 2,500 customers would be added to sewer districts when four major projects are completed in Oak Orchard, Angola, Johnson's Corner in the Fenwick Island area and at the Inland Bays treatment facility.

The new budget calls for limited spending with the general fund and not using any funds from reserve accounts. The general fund will see a modest increase from the previous fiscal year of 1.3 percent - from $46.2 million to $46.8 million.

County council must approve the proposed budget before June 30, and could vote following a Tuesday, June 22 public hearing.

Building related revenue levels out

"The economy-sensitive revenues - realty transfer tax, building permits, building inspections and recorder of deeds fees - are at the same level as the previous year," said Webb. "We're not losing ground, and given the current state of the economy in the last couple years, not losing ground is good news."

Investment income is another story. The county has watched its investment revenue drop from more than $4 million in fiscal 2007 to a projected $350,000 next fiscal year.

Baker said investments are made with the county's cash and must be safe and solid whith no risk "There are not a lot of options out there right now," he said.

He said the traditional investments, CDs and U.S. treasury bonds, have tanked over the last year.

Phillips noted that 40 percent of the general fund budget, or $20 million, goes to pubUc safety. In the past, revenue from the realty transfer tax more tiian covered the line items. Now, there is at least a $7 million gap he said. "But we still maintain the same level of service," he said.

Councilman George Cole, R-Ocean View, said the budget committee should take a look at the pension fund. Under the current system, county employees are not required to contribute to the fund, which is predicted to cost the county more than $4 million in the next fiscal year.

"We need a new plan for new hires," he said. "We shouldn't take anything away from anyone, but we need to draw a line in the sand because we can't continue to be as generous as we have been."

Move to more uniform sewer fees

Webb said a move toward more uniform sewer-service fees, not including assessment fees, would make the accounting system more efficient She said instead of 23 separate funds for each of the county's sewer districts, one sewer-operating fund for each of four districts would be established. She said the fees would be phased in over a seven-year period and analyzed each year. "We want to spread the costs over the entire system and make it more simplified," she! said. "We need to get to rate stabilization."

Service fees range from $204 to $487. Customers in the West Rehoboth district would not be included in the change. Webb said changes could be made in the future, but an ordinance might be required because of the way the system was funded when it was created.

Overall sewer charges still vary greatly throughout the) county because of differing front-footage assessment fees in the 23 districts. Webb said uniformity in assessment fees would be more of a challenge, but staff would eventually move toward a goal of more uniform assessments. Overall annual bills, including service and assessment fees, range from $431 to $1,000.

State action could affect county

Baker said until the Delaware General Assembly finishes its session, there is concern bills could pass that directly affect county finances. Three major funding sources could see some state action this year: a change in the real estate transfer tax formula with less money coming to the county; a reduction in the state paramedic program allocation from the current 30 percent; and the takeover of the registet of wills and recorder of deeds offices under county jurisdiction.

Loss of the two row offices would cost the county between $2.6 million and $4 million, Baker said. Even at a much-reduced level from just three years ago, the realty tax still brings in nearly $13 million to the county.

Baker said a 10 percent reduction in the paramedic formula last fiscal year cost county taxpayers $1.2 million. The paramedic program, with more than 100 employees, is the largest department in the county with a proposed budget of just over $12 million.

A reduction in that percentage is what county officials are most concerned about. Baker said any reduction in the state's 30 percent contribution to the program could mean a cut in paramedic services.

Because it's part of the grant-in-aid budget it could be one of the last items to surface. "We know grants are going to be lot more competitive this year," Baker said.

Phillips said the percentage should be restored to 50-50 with the county and state equally sharing costs of the program.

In addition, Phillips said, unfunded mandates, such as dog control, make it harder for the county to make ends meet. He said the staff is performing high-wire acts at times to maintain a balanced budget.

The proposed budget also contains money for new software, upgrades in security systems and development of several land-use ordinances mandated by the comprehensive land-use plan. Funding for human-service grants, which was cut about 8 percent last year, will remain at just over $143,000.

The county also plans to spend $8 million on other projects including $3.3 million at the county airport for runaway extension, pavement improvements and stormwater management improvements; $1.3 million for an emergency communications building; and $1.2 million for property acquisition.



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Original Publication Date: May 21, 2010



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