Fueled by an increase in housing-related revenue, Sussex County ended fiscal year 2013 with more than a $2.3 million surplus, a recent audit shows. The county has posted a surplus for the last four fiscal years, in contrast to fiscal years 2007 to 2009 when deficits totaled $8 million.
The county's bottom line literally bottomed out when the financial crisis hit, dropping from an $11 million surplus in 2006 to a $3 million deficit in 2007. It would take three more years for recovery to get underway.
In anticipation of the surplus, and on a recommendation from county financial staff, Sussex County Council voted to spend surplus funds, placing $1 million in the pension fund and allocating $150,000 for emergency housing repairs, $110,000 for an employee bonus and $540,000 to the capital fund.
With the previous fiscal year's budget surplus of $854,000, the county allocated $350,000 to the county's 11 independent libraries, added $225,000 to cover costs for four additional Delaware State Police troopers and $150,000 to assist with emergency housing repairs.
“The county is seeing an increase in revenues as the economy rebounds,” said Finance Director Gina Jennings. “But we remain cautious and keep our expenses in check.”
Realty transfer taxes – the county's top revenue source – accounted for $17.4 million in fiscal 2013, an increase of $3 million from the previous year and more than $4 million over the budgeted amount.
Other building-related revenue – permits, inspection fees, recorder of deeds fees – increased 16 percent – or $563,000 – over the previous fiscal year.
Part of the increase was offset by a reduction in income from sheriff's sales as a result of fewer foreclosures. From a high of $4.7 million in fiscal 2012, revenue from the department dropped $1.6 million this past fiscal year. “That's another sign of economic recovery,” Jennings said.
Top sources for the county's $49 million general fund revenue included realty transfer taxes of $17.4 million, property taxes of $11.2 million and charges for services at $7.5 million.
From the general fund, the county spent $2.4 million – or nearly 30 percent of the budget – on the paramedic program, $8.8 million on government operations and $8.2 million on its grants-in-aid program – including $6 million for public safety grants to local fire departments and municipal police departments.
The county received nearly $10 million in federal grants during fiscal 2013, down from $31 in fiscal 2012. Jennings said federal funds decreased because federal stimulus funds for infrastructure projects have ended.
Questions about pension funds
Jennings said the county's pension fund is nearly 82 percent funded, while the county pensioners' benefits fund is nearly 71 percent funded. Jennings noted pension funding had declined over the past few years. Three years ago, the pension account was funded at 92 percent.
“We should be at 100 percent,” Jennings said. “With our new assumptions, we should see an increase.”
Councilman Vance Phillips, R-Laurel, said he would like county staff to develop a plan to get the county's pension account funded at 100 percent. “It might take some sacrifice, but hitting the 100-percent mark is important,” he said.
Councilman George Cole, R-Ocean View, took a different view of the issue. He said that protecting county investments from the next economic bubble may be more important than reaching the 100-percent mark.
Jennings reminded council that because the county is ultra-conservative in its investing, it does not experience the same losses many other government entities endure during tough economic times.
In fiscal 2013, the county allocated more than $4 million from its pension trust fund; the fund now totals $86 million.
Under state and federal laws, county finances must be audited each year.
While the county has $167 million in long-term debt in outstanding bonds related to its sewer districts, the county has no general fund debt.
The county has more than $11 million set aside for long-term capital projects.
In fiscal 2013, sewer connection fee revenue increased 39 percent to $4.1 million.