News

March 30, 2005

County residents can expect a hefty increase in their sewer bills in the coming fiscal year, but, according to County Executive Christopher Coons, it will be possible to provide the level of public services they have come to expect "without increasing property taxes for several years to come."

Even as he delivered a detailed steady-as-she-goes budget proposal on Mar. 29 to an apparently receptive Council before an equally appreciative overflow audience of mostly public officials and civic activists, the underpinnings of his spending plan were again before the Court of Chancery for a determination of their validity.

Richard Korn, one of two plaintiffs in a taxpayer suit challenging county government's keeping large reserve accounts as a hedge against rising costs, told Delaforum that he has no intention of wavering in the bid to have allegedly excess and ill-gotten money "returned to the taxpayers." Toward that end, he and co-plaintiff Andrew Dal Nogare, asked in a petition filed electronically on Mar. 24 but not made available until Mar. 29, that the court block implementation of a recently-enacted ordinance setting up reserve accounts in both the general and sewer funds.

Coons referred pointedly to the lawsuit in his speech: "Could I have presented a budget that would match expenditures and current revenues and give the reserves back to the taxpayers? Yes, but doing so ... would require either drastic cuts in county services or prompt significant increases in property taxes."

He proposes instead that general fund reserve account be used to fill the gap between spending and revenue. In the current fiscal year, he said, spending is running $17 million beyond what is being taken in and that doesn't include the $22 million Council authorized in the form of one-time grants. While calling for a halt in county largess to "deserving" organizations for "worthwhile" projects, Coons said that the budget deficits will continue to grow but can be controlled by "managing taxpayers' dollars appropriately and responsibly."

The alternative, he said, is to face a situation, in fiscal 2009, where the shortfall has grown to a point where "we will have a very difficult decision to make ... either dramatically increase property taxes -- as much as 60% -- to drastically cut services, including laying off hundreds of county employees."

Coons proposed a fiscal 2006 budget totaling $214 million, of which $154 million would consist of general-fund spending, $57 million to operate the sewer system and $3 million in the street light fund. A comparison with the current budget was not immediately available, but Coons said the figures he presented represent a 3.35% increase. The rate of increase, he said, compares to 9% in the current year over last and 5% and 7%, respectively, in fiscal 2003 and 2004 over the previous year. The new fiscal year begins on July 1.

Coons proposed a 37%  hike in the sewer fee to make up, he said, for the fact that customers currently are paying only 85% of the cost of operating the system.

It would have been better, he said, to have increased the rates gradually during recent years. "But since that did not happen, we must catch up now," he said. The rates have held steady since 1994 and, because they are based on water consumption and that has gone down, on average, during the past decade, residents are actually paying less now than they did in 1994.

The increase, Coons maintained, would seem more palatable if viewed in context with what people pay for sewer service elsewhere. The average bill in New Castle County, he said, will go up to $234 a year from $171 now. That, he said, compares to an average of $340 in Kent County, $347 in Sussex and $293 in Cecil County, Md.

Although there is a now a reserve account, Coons said that should not be used to prevent or mitigate a rate increase. Instead, he proposed using $66.4 million of the $81.4 million in the newly created account to finance the rehabilitating and repairing the system. That, he said, will prevent having to pay for that work by borrowing money through the sale of bonds with the result that the county "will save money every year for the next 20 years, starting with $4.8 million.

Mre than half of Coons's separately proposed $58.6 million capital budget would be used to finance construction of sanitary sewers south of the Chesapeake & Delaware Canal.

Richard Przywara, Coons's chief of staff, said the actual budget is not yet available but will be ready for formal introduction at Council's Apr. 12 meeting. At the conclusion of Coons's speech, Council president Paul Clark said he is "looking forward to partnering with the executive" to adopt the budgets.

2005. All rights reserved.

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