Sussex budget shows upswing in building revenue
Sussex County Council unanimously approved a $117.7 million budget for the 2014 fiscal year beginning July 1. With the housing market showing signs of recovery, the budget keeps the county’s property tax rate the same it has been since 1990.
A projected increase in local realty transfer tax revenue bolstered the budge, which for the 24th year in a row maintains the property tax rate at 44.5 cents per $100 of assessed value. The average county tax bill for a single-family home remains around $107 annually, not including school district taxes.
Realty transfer taxes – which account for 32 percent of county revenue – are budgeted at $16 million, a 21-percent increase over the last fiscal year's budget, but a $2 million decrease from projected revenue this fiscal year. Property taxes, the county's second-leading source of revenue, are expected to increase 10 percent to about $12 million.
“We are seeing an increase in building-related revenue, but we want to be conservative in the budget,” said County Finance Director Gina Jennings.
Building-related revenue is expected to increase from 7 percent to 39 percent in building permit, planning and zoning, recorder of deeds and inspection fees, Jennings said.
Another sign of the housing market recovery, is the dip in revenue in the Sheriff's Office – a result of a sharp decrease in the number of foreclosure sales. Revenue is budgeted at $2 million compared to $4.6 million two years ago.
For most of the county’s 57,000 public wastewater customers, rates will decline, depending on the district, thanks to a recent refinancing and the retirement of long-term debt.
While the overall budget is down from the 2013 plan, the general fund portion of the budget is expected to rise by 8 percent, or $3.7 million. That is due in part to an expected surplus later this year, as well as an expected increase in building-related revenue. The general fund portion of the budget pays for day-to-day operations and services offered by county government.
The new budget maintains grant funding for local service providers, including volunteer fire companies, municipal police departments, local libraries and nonprofit community groups, while increasing funding for the county’s housing rehabilitation program to assist lower-income households. Just over $1.9 million is budgeted to provide for 44 additional Delaware State Police troopers to patrol county roads.
On the operations side, the proposed budget includes a 2-percent, one-time bonus for the county’s nearly 500 employees. The budget also includes an enhancement to the employee benefits program to change the current dental and vision programs from a reimbursement plan to an insurance plan. Merit raises are also included.
More than $27 million is included in the budget for capital and sewer district projects, including $5.4 million for airport enhancements.
Somers: Develop more revenue sources
Only two people spoke during the hearing. Carole Somers, representing the League of Women Voters of Sussex County, said the new budget is fiscally conservative, but not economically conservative because it continues to rely on building-related revenue such as realty transfer taxes.
“Economic sources other than agriculture, construction and tourism need to be developed,” she said, noting that the county spends only 2 percent of its budget on economic development, the same as constables and dog control. According to the budget, the actual expenses for economic development are just over $109,000.
“Unless we plan and develop new revenue sources, we are headed toward a future where all farms are sold and tourists and retirees won't come to Sussex County because we've destroyed the very things that attract them,” Summers said.
She said the county should take a look at property reassessment – something that hasn't been done since 1974 – and perhaps even a modest tax increase as ways to supplement revenue. She also said there is a need for an experienced, certified county planner.
Dan Kramer of Greenwood accused council of treating its employees like dogs. He said staff deserved a cost-of-living raise and not a 2-percent bonus as proposed in the budget. “You are setting aside millions and you can't give them a raise?” he asked. “The county has so much money you could choke a cow on it.”
WHERE SUSSEX SPENDS ITS MONEY*
$27.7 million, all capital projects
$17 million, sewer projects
$13 million, paramedics
$7.3 million, grants-in-aid
$5.4 million, airport improvements
$5 million, pension contribution
$3 million, libraries
$3 million, emergency preparedness
$2.1 million, community development
$2.1 million, new Greenwood library
$1.9 million, engineering
$1.9 million, 44 additional Delaware State Police troopers
$1.8 million, financing
$1.4 million, assessment
$1.3 million, buildings and grounds
$1.2 million, planning and zoning
$720,000, dog control
$502,000, county council
$400,000, land for new paramedic station
$109,000, economic development
Salaries and benefits account for 57 percent of expenses in the $50.1 million general fund
$33.6 million, sewer district expenses, including debt service
*Not all expenses are listed – see the complete budget at sussexcountyde.gov.
WHERE SUSSEX GETS IT MONEY*
(General fund)
Realty transfer tax, $16 million
Property tax, $12.3 million
State and federal grants, $6.3 million
Charges for services, $10.1 million
Reimbursements and reserves, $4.8 million
$33.6 million (sewer charges)
*Not all expenses are listed – see the complete budget at sussexcountyde.gov.
Employee bonuses create stir at meeting
A discussion about employee bonuses in Sussex County's fiscal 2014 budget created a few moments of contention among county council members during a June 18 public hearing.
As he had stated before, Councilman Vance Phillips, R-Laurel, said the 2-percent, across-the-board bonus was not equitable to those at the lower end of the county wage scale. “To be fair, we need to give everyone the same amount of money,” he said.
Phillips said an employee making $22,000 a year would receive $332 after taxes and an employee making $90,000 would make about $1,000 after taxes.
His comments ignited a heated discussion and eventually a motion by Phillips to go against the budget committee's 2-percent recommendation as presented by County Administrator Todd Lawson.
His motion to amend the budget to give each of the county's 492 employees a $840 bonus was defeated in a rare 2-2 vote. Phillips arrived at that number by taking the total amount of the bonuses of just over $413,000 and dividing it by the number of county employees. “Employees on the lower scale are the ones who will need it the most,” he said.
Council members Phillips and Sam Wilson, R-Georgetown, voted in favor of the amendment while Council President Mike Vincent, R-Seaford, and Councilwoman Joan Deaver, D-Rehoboth Beach, voted against the amendment.
Councilman George Cole, R-Ocean View, abstained from voting. He said more information was needed, adding there was not enough community of thought on the issue.
Adding to the debate, retired county finance director Susan Webb was called to the podium to answer questions from council. Webb offered an option in contrast to what the budget committee recommended. She said a cost-of-living adjustment would be more beneficial to employees because it would be attached to their salaries and carry over to the following year. “If you want to be competitive, salaries have to come up,” she said.
Council did not seem comfortable with a cost-of-living increase. “We don't know if we will have that money next year and employees shouldn't get a raise just for showing up,” Phillips said, adding that merit raises are the preferred way for employees to advance.
Merit raises are also included in the new budget.
Lawson said county staff is already looking at compensation packages for all employees for next year's budget and will come back to council with recommendations.
