Executive - Press Release

Posted on: May 29, 2013

New Castle County 2014 fiscal year budget passed largely intact with a few amendments

WILMINGTON, Del. – New Castle County Executive Tom Gordon’s 2014 fiscal year budget was passed by New Castle County Council with a few amendments made in the spirit of cooperation Tuesday night in Council chambers of the City/County Building.

Gordon’s operating $250.9 million remained intact for the most part with the exception of some trimming Council made to preserve the County reserve, which Gordon built up during his first two terms in office.

Council’s budget vote on Tuesday came after months of weekly budget hearings held by council’s Finance Committee since Gordon’s budget address to Council on March 19.

Gordon said the amendments were fair and he would not veto them.

“It was a good healthy debate and it was a good compromise,” Gordon said. “I thank all of Council for their hard work to pass a good budget that we can all live with. I want to thank all members of Council and Council President Christopher Bullock for his leadership and his statesman’s like approach.

“I hope we can continue to work together in this spirit of cooperation,” he added. “As I said in my budget address to Council, my door is always open to them.”

Gordon’s proposal to provide a $225,000 grant to the Wilmington Fire Department was among the items that remained intact within the budget. The money would be used to buy apparatus for the fire department that provided service not just to city residents but to the roughly 150,000 suburbanites commuting to the city each day. A County Council amendment to remove the grant funding failed by a 6-7 vote.

Gordon’s budget plan had also included the hiring of 19 additional county employees mostly in the construction and maintenance sector to repair deteriorating buildings and facilities, including buildings at Rockwood Park and Carousel Park. Gordon said it was important to address infrastructure that had been neglected for the last eight years in order to maintain quality of life for county residents and to help attract businesses to upstate Delaware.

“I must not have communicated my vision for that we'll enough to Council,” he said. “We're going to continue to work with Council and build bridges. At least 12 of them have been together a while. I'm the new guy on the block and I have to realize that. I need to work with them.”

Gordon returned to office in November for an unprecedented third term as county executive after leaving office in 2004. When he came into office in 1997, he inherited a $100 million deficit. By the end of his second term he had transformed that shortfall into a $185 million reserve.

However, County Council’s amendment to cut 19 new positions kept 85 vacant, funded positions intact and more than 20 vacant positions would remain unfunded. Accounting and Fiscal Manager Ed Milowicki had said that an unfunded vacant position was a type of placeholder that was easier to keep in the budget rather than eliminate it and ask Council to reinstate it later.

Acting General Manager for Special Services Wayne Merritt and Chief Human Resources Officer Lynn Beaty testified to Council that the new positions were needed and that county code made it difficult to simply shuffle funding for vacant, funded positions to the new positions. But Council voted 11-1, with one abstention, to accept the amendment.

On the sewer rate, Councilman John Cartier (D-Holly Oak) and George Smiley (D-New Castle) sponsored an ordinance to raise the sewer rate by 3.9% to close the deficit of $2.2 million. Gordon had proposed no sewer rate increase and using money from the reserve to avoid the rate increase on taxpayers still dealing with an economy sluggishly recovering from the Great Recession.

Councilman Bill Bell (D-Middletown) said he agreed with the Gordon administration to not increase any taxes or fees this year. As such, he could not support the amendment.

But the amendment to pass the sewer rate increase passed by a vote of 8 yes, 5 no. The 3.9% increase would mean an average $11 increase for county residents, bringing the rate to a residential flow rate of $5.74033 per 1,000 billable gallons. And it would eliminate the need to use $2.2 million in reserve funds. The sewer budget, as amendment, then passed by a 10-3 vote.

As for attempted amendments made to the $35.6 million capital budget, New Castle County Councilman Jea Street (D-Wilmington South) said Council as a whole had not followed the law and Council rules in submitting an amendment to the capital budget. Five members submitted the amendment, not a majority of council, he said.

“We’re supposed to be rule makers, not rule breakers,” Street said. “The amendments were misrepresented as coming from Council and they didn’t.”

County Attorney Bernard Pepukayi said he respectfully disagreed with County Council attorney Carol Dulin’s legal opinion that individual members of Council could submit amendments to the county executive.

Street then moved that the amendment be withdrawn from the agenda. Councilman William Powers (D-Townsend) seconded that motion, but it failed by an 11-2 vote.

On the bond vote related to the capital budget, Smiley presented an amendment to reduce expenditures to $27 million in 2014.

But, Bell said the county would save money in the long run under by borrowing against the current, low rates rather than wait until later when money would be more expensive to buy.

Indeed, Chief Financial Officer Mike Coupe said interest rates had been at historic lows. Those rates would likely increase as time went on, he said.

Smiley’s amendment was ultimately defeated with 5 yes votes and 8 no votes.

Council then voted 10-3 to authorize the bond issuance to pay for capital construction costs – akin to the county’s mortgage – for FY 2014.

Council also voted 12-1 to approve Gordon’s capital ordinance, which included $2.5 million to be used for farmland preservation.

In addition, an amendment to take $100,000 for recreational programs such as the popular Sleep Under the Stars camping at county parks failed by a 4-9 vote. Gordon said it was important to restore such recreational programs for the enjoyment of county residents.

Fiscal Year 2014 Budget Highlights:
Total Operating Budget: $250.9 million
General Fund Budget: $169.2 million, an increase of 3.16%, using $4.3 million from the county reserve
Salaries, Benefits and Debt Service: 88% of general fund spending
Authorized Positions: 1,58, including an increase of 19 positions, 18 of which would be in Special Services for construction and maintenance and 1 position in the Procurement Office
Property Tax Rate: No increase
Capital Budget: $35.6 million, $17.2 million of which was allocated for sewer infrastructure rehabilitation

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