No increases in taxes or sewer rates in Clark’s proposed FY13 budget for New Castle County

Via Nancy Willing

WDEL - click to the link for the audio
County Exec outlines FY '13 budget; Council reacts
By Frank Gerace/Jim Hilgen

County Executive Paul Clark's proposed budget for Fiscal Year 2013 contains no increases in taxes or sewer fees.
In his budget address, broadcast on WDEL, Clark said budget numbers are important, but it's more important to remember what those numbers stand for.
The roughly 166 and a half million-dollar budget is about 1 and a half percent larger than that for FY2012, and doesn't call for any layoffs, spending of general fund reserves or cuts in services.
The budget proposal gets a mixed reaction from County Council.
Democratic councilman George Smiley says the spending plan wisely uses the taxpayers dollars.
Some 30 members of F-O-P Lodge 5 were in attendance over concerns that the hiring of new officers on the federal dime may endanger jobs down the road.
But, Republican Council President Tom Kovach takes issue with calling Clark's proposal a "balanced budget."
Kovach says more needs to be done to contain costs and simplify government.
Councilman Smiley says all the credit for this latest budget goes beyond the executive or council.
Some 30 members of F-O-P Lodge 5 were in attendance over concerns that the hiring of new officers on the federal dime may endanger jobs down the road.
Council must approve the budget by the end of May.
It goes into effect July 1st.


Clark pitches budget plans

New Castle County Executive Paul Clark proposed budgets Tuesday for the fiscal year that starts in July that hold the line on property taxes and sewer fees.
Three times at the beginning of his 25-minute speech, Clark noted that the proposed $166.6 million operating budget was balanced without having to use the county's reserve funds.
"With the economy recovering so slowly, we are continuing to conserve the reserve," Clark said.
While it's true that the two general fund reserve accounts, which total $84 million, wouldn't be touched, a $1.7 million transfer from the Real Estate Transfer Tax Reserve Fund would be made to the general fund, Chief Financial Officer Ed Milowicki said.
In order to balance the $71 million sewer budget, a $1.7 million transfer would be made from one of the two reserve funds to the sewer account. Those accounts total $27.7 million, Milowicki said.
This is the second set of budgets the Clark administration has overseen. Clark was elevated to county executive in November 2010 after Chris Coons left office after winning a U.S. Senate seat. Clark will try to get elected to the position for the first time later this year.
Bill Shahan, Clark's opponent in the Sept. 11 Democratic primary, said using transfers from the reserve accounts instead of increasing taxes and fees is just a slick way of introducing election-year budgets that voters like.
"This budget proposal is something I would expect in an election year and from someone with a background in retail business like him," Shahan said, adding that more money should be allocated for police officers.
County Council will hold a series of budget hearings over the next several weeks, then vote on the final budget sometime in May.
County property taxes for homeowners with a median assessment of $67,000 would remain at $440 annually. County taxes generally make up about one-third of a property owner's tax bill. The rest is school taxes. The average residential sewer bill would stay at $283 a year.
There are no cuts in services in the budget.
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Six police officers would be added, bringing the department's authorized strength to 370. There are currently 30 vacancies. A federal COPS grant would pay 100 percent of the new officers' salaries and benefits, county spokesman Jim Grant said. Eight 911 operators also would be hired.
"As I have said repeatedly, public safety is our highest priority," Clark said.
About 30 officers in bright yellow Fraternal Order of Police T-shirts attended the speech to protest a recent arbitration decision that gave police a contract that included a 2.5 percent compensation reduction. The police union has appealed the decision.
FOP Lodge 5 President Mike Zielinski said Clark doesn't place a high value on public safety.
"We still have recruitment and retention issues and sooner or later he's going to have to deal with us," he said.
The county had projected a $7.1 million shortfall for the next budget year.
About $2 million would be saved by the 1,562 full-time county employees' agreeing to a 2.5 percent giveback in compensation. Layoffs would have been necessary without the reductions, said Vince Meconi, Clark's deputy chief administrative officer.
An additional $1.7 million would be covered by the transfer from the real estate tax reserve fund, and $1.6 million in "stale money" from a series of inactive accounts was discovered and would be used to reduce the projected deficit as well, Chief Administrative Officer Gregg Wilson said.
An additional $1.8 million would be saved by several cost-cutting moves, most of which are connected to employee health care benefits.
Despite better deals on insurance policies and prescription coverage, health care will go up $2 million in the next fiscal year, a 10 percent increase. Pension contributions will rise $1.7 million, a 16 percent jump. Rising fuel prices will cost the county an estimated $400,000 more for police cars and ambulances.
A faltering housing market, which has seen the average home price decline to $237,000 this year, also has limited money the county earns. The county expects to collect $16.2 million in real estate transfer taxes, compared to $40 million in 2006.
Clark also proposed a $17 million capital budget Tuesday, most of it for sewer and library projects. Money for the infrastructure projects would be from bond sales scheduled for the fall, Milowicki said.
Clark proposed using $424,000 recently discovered in inactive accounts by Sheriff Trinidad Navarro to supplement the county's Senior Home Repair Program. About $100,000 in federal money is allocated to the program each year. Using the county money for the program would require County Council approval.
Contact Adam Taylor at 324-2787 or ataylor@delawareonline.com.

Why NCCo budget has no new taxes, sewer hikes OP-ED

It's easy to govern when plenty of money rolls in from rock-solid revenue generators. But like the rest of the nation, that has not been the lot of New Castle County's government for several years now.
However, County Executive Paul Clark's proposed fiscal year 2013 spending plan has no increases in taxes or sewer rates, and he's doing it without tapping into the county's reserves fund.
At the same time NCCo workers' health care costs are projected to increase by 10 percent, the county's contributions to pensions will rise from 14.5 percent to 16.10 percent and merit step increases will cost nearly a $1 million. So what gives?
A priority on efficient use of tax dollars and public-private partnerships. For example rebidding medical stop/loss coverage saves $553,000; deleted funding for unfilled positions nets another $355,000.
And this wasn't all top-down management driven. Employees identified savings that made their departments more nimble in terms of day-to-day operations.
But critical to this leaner spending plan is recognition of the costs that come from foregoing deferred maintenance on critical public projects, such as the county's aging sewer system. During the last five years, $155 million has been spent on modernization. Those updates now are projected to save the county $29 million in savings this year.
Essentially, New Castle County is benefiting from imitating successful a business model: When times are tough, hunker down on the kind of efficiencies that make your operations more fiscally effective and durable in the long-term.

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