March 27, 2007

Requested county budget
seen bettering fiscal health

County Executive Christopher Coons's proposed budget "gets us in a significantly better place, but we still have work to do," according to chief financial officer Michael Strine.

Presenting a detailed overview of the revenue-and-spending plan Coons has put before Council, Strine said that current projections show operating reserves being depleted around November, 2010, if Council approves it essentially as submitted. That would be two years later than if nothing were done to significantly change current income and spending practices.

He disclosed at a meeting of Council's finance committee on Mar. 26  that a major effort is being made in negotiations now underway with the union which represents maintenance and construction workers to alter the county's wage and employee benefits structure. He did not give any details about the administration's position but, in a separate context, referred to a need to reduce costs associated with accumulation of sick leave and vacation time, and with pension benefits. He also indicated that automatic pay increases might also be brought to the bargaining table.

Obtaining the union's agreement to make concessions in its new contract, coupled with pay freezes affecting political appointees and other non-union employees, he said, will bring about a third of the county government workforce into line with some of the recommendations derived from a consultant's report comparing wages and benefits with other local governments and the private sector. Personnel costs account for about 75% of the New Castle County budget.

Municipal Workers Local 459 is the only bargaining unit which has a contract up for renewal this year. Other county unions will come to the table in 2008.

The administration's negotiating posture apparently is in advance of its receiving specific recommendations from the financial future taskforce which is considering the consultant report. No meetings of the taskforce are currently scheduled.

For the most part, Council members at the committee meeting received Strine's presentation without tipping their hands about their respective positions as the finance committee begins six weeks of budget hearings. A few did drop some hints, however. As with all standing committees, all members of Council sit on the finance committee.

Referring to Coons's decision to do away with a separate community governing office and transferring its eight staff members into four operating departments, Councilman David Tackett said that "we're pulling back from our commitments to communities." Strine said that the eight workers will perform functions similar to what they do now in their new posts, while also being available for other duties. The transfers do not take effect until the start of the new fiscal year on July 1.

Strine said that 42 vacant positions in several departments are to be eliminated and 19 others will go unfinanced during the coming fiscal year. Most severely hit will be the Department of  Special Services -- the county's equivalent of a public works department -- which will lose a combined total of 15 slots. The Department of Land Use will lose 13.

He said no front-line police or paramedic positions will be cut and, in fact, candidates are being recruited and trained to fill all authorized but currently vacant slots.

Councilman William Tansey questioned why it is planned that Westover Hills, an unincorporated community, will be charged the full cost of maintaining a police substation there. Strine replied that that Christiana Hundred community, at its own request, is receiving more intense police service than all other unincorporated communities. Middletown, an incorporated municipality, also will be charged full costs for supplemenrtal police services, he said.

Council president Paul Clark asked why "we have tons of spokespeople" spread through the various departments. Strine said that, although there are several 'public information officers', their duties go beyond public relations.

Councilman Jea Street said he is concerned about the number of county vehicles that employees are entitled to take to their homes and the amount of gasoline that is being used for other than official business. He also suggested that the county "sell Rockwood [Mansion Park] and some of the other parks we don't need." Strine said the take-home policy is under review and will be explained at the departmental budget hearings. The parks, he said, are deed restricted for that use and therefore would not likely be appealing to potential purchasers.

When Clark asked if there are any 'time bombs' in the county coffers, Strine replied that the uncertain cost of litigation and post-employment liabilities are the most significant. Although current expectations are that the real-estate market has bottomed out, future declines in transactions affecting the real estate transfer tax are still possible, he added.

Strine said Council approval of Coons's proposed budget will increase expected revenue in fiscal 2008 by $17.1 million to $163.2 million and that spending will grow by $5.9 million to $168.9 million. The annual deficit, he said, will be reduced from the previously projected $37.1 million to $5.7 million. Consequently, reserves, exclusive of the 'rainy day' emergency reserve, will only drop from $68.1 million to $62.4 million, instead of the previously anticipated $31 million, by June 30, 2008.

He is still projecting deficit spending in foreseeable future years, but said that does not reflect possible state government support and agreements with the other unions that could alleviate some employment costs.

While the focus necessarily is on the general-fund operating budget, Strine said the sanitary sewer fund budget "is healthy" and not be until fiscal 2011 will it be necessary to "factor in modest [rate] increases."

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Read previous Delaforum article: Tansey questions size of proposed tax increase

Access an overview of the proposed county budget

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