Share: 

Let new residents help pay for infrastructure improvements

September 21, 2021

With this article I would like to discuss a proposal being made by Sussex Councilman, Mark Schaeffer concerning additional funds to address our infrastructure needs in Sussex County. This is a revenue program known as Special Tax District Financing. I know something about this program. While I served as president of the Bridgeville Commission, we instituted a special tax district for Heritage Shores. This was the first time that this type of financing was used in Delaware. 

Let me highlight the benefit that came from the program. First and foremost, the people of Bridgeville were never at risk for default. This program funded over $22 million of public projects including roads, sewer and water improvements. In addition, the town was able to recoup funds for items that were associated with growth for which they had already paid or would need, such as town vehicles, computer program updates, renovations and certain employee costs. The library received $600,000 to help fund a new facility, and Bridgeville bought its first street sweeper. The Little League field saw improvements from these funds. The administration of the program was handled by a professional administrator and that cost came out of the special fund revenue. 

How about those who bought in Heritage? Through an agreement reached by the town and the developer, the first 900 home buyers had half of the special tax over the 30-year life of the bond issued paid up front by the developer. Not only this, the price of the lot and home package was reduced by $20,000.  All of this was fully discussed with the buyers up front, and a full-disclosure release was also signed by the buyers so they were and are fully aware of their obligation. 

No one is annexed into a special tax district unless they request such action, and those outside the district in the remainder of the town or county are never responsible for any of the payback of these funds. 

To make sure that both the developer and town understood who was responsible for what was allowed construction-wise, and what and how many homes could be built, Bridgeville developed a developer’s agreement that spelled all this out so that future town commissions or new developers knew what was expected of both.  Since my time in Bridgeville, the town has issued a second bond offering to refinance the original bonds to take advantage of lower interest rates, thus saving thousands in bond repayments for the entire district. 

Other towns also looked into the program and had their charters changed to allow them to do the same as we did in Bridgeville. Millsboro did issue almost $12 million in bonds in 2007 for the Plantation Lakes Special Tax District. 

They funded a number of  in-town projects totaling $1.8 million that they could do because of the addition of Plantation Lakes to the town of Millsboro.

When emergency repairs to their wastewater system were needed, they were able to redirect these funds to resolve those problems, thus saving thousands of dollars for all the residents of Millsboro.

Last year, Millsboro issued a second bond offering to refund the original 2007 bonds and to also fund additional public improvements. Just over $3 million of the 2020 bond issue are available to Millsboro to pay for public improvements outside of Plantation Lakes that will benefit all residents of Millsboro. These new town-wide improvements include the police station and various water improvements. 

Schaeffer is proposing to use this funding mechanism to help resolve the infrastructure problem in Sussex County.

From where I sit, a proposal that would give our new residents a chance to help pay for the infrastructure including off-site road improvements that would be needed because of their desire to join us in Sussex is a no-brainer and because these bonds are normally issued prior to the sell-out of the proposed development, developers are able to do immediate, off-site improvements including roads benefitting all of us in Sussex. 

By the way, the developer is making payments as well, thus continuing the practice of developers’ responsibility. As I said before, it’s a no-brainer to me. Good luck, Mr. Schaeffer, with a great attempt to solve this very complicated issue. 

On another subject, the governor and General Assembly took a major step to help resolve the doctor shortage in Delaware and Sussex County by passing and signing into law HB 48 that creates a Health Care Provider Loan Repayment Program. This new program will award new Delaware primary care providers $50,000 per year for tuition reimbursement for up to a maximum of four years if they agree to serve underserved areas in Delaware, and accept Medicare and Medicaid patients. SEDAC endorsed this bill and pushed for its adoption. The bill was passed unanimously in both houses of the General Assembly.

It joins a second, less-successful program in place in Delaware since 1970. This program, known as the DIMER program, has provided funds to 1,206 prospective new Delaware doctors. Of that total, only 229 (19 percent) of the total participants who received Delaware taxpayer funds have returned to Delaware and only 37 (3 percent) have located in Sussex County. We do a great job of training doctors for Maryland, New Jersey, Pennsylvania, D.C., New York and Virginia where 451 (37 percent) of Delaware-financed doctors have gone. SEDAC proposed a rather simple solution back in 2020. Add a one-sentence requirement to the present law that will require recipients to return to Delaware if they take our money. I’m told that SEDAC’s solution is too simple for this complicated program, but that same solution is part of HB 48 that is now Delaware law. Go figure.

Joe Conaway is chairman of the Sussex Economic Development Action Committee.
  • Cape Gazette commentaries are written by readers whose occupations, education, community positions or demonstrated focus in particular areas offer an opportunity to expand our readership's understanding or awareness of issues of interest.

Subscribe to the CapeGazette.com Daily Newsletter