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March  19,  2008

Coons asks Council for limited
increase in county spending

Property owners apparently will be spared a third consecutive tax increase, but County Executive Christopher Coons told them a relatively modest 4.4% boost in what they pay for sanitary-sewer service is in the offing and that county government is still facing lean years.

In his annual budget address before a special session of County Council, Coons said that, so far, it is possible to cope with what appears to be a worsening financial situation without significantly cutting essential services or having to lay off county employees.

Budget documents presented to Council call for using $22.2 million from cash reserves to finance what otherwise would be a budget  shortfall. County government is prohibited by law from actual deficit spending.

Council has the ultimate say in determining the budget and setting tax rates and sewer fees, but the practice for as long as anyone can remember is for it to approve, without significant change, what the county executive requests. Council's finance committee will hold budget hearings beginning on Mar. 25. It must enact the budget before the end of May.

Coons is asking Council to approve spending $171.9 million on general operations, $63.8 million to provide sanitary-sewer service and $4.2 million to pay for street lighting in neighborhoods that have chosen to have lights. Property taxes and the county's share of the state real estate transfer tax are the primary sources of revenue for general operations; sewer fees finance sewer services; the street-light tax is paid only by residents of the affected communities and is passed through to Delmarva Power. In addition, the county levies a separate property-based tax to pay for crossing guards assigned to intersections near public, religious and private schools.

Coons said the combined proposed $239.8 million budget represents 4.9% growth over what was originally budgeted for the current fiscal year. Background information provided in a press briefing by chief financial officer Michael Strine said debt service, public safety and energy and fuel costs account for all but $1.4 million of the increase. Excluding those, he said, would indicate slightly more than a half of 1% growth.

"Basically, this is a bare-bones budget," Strine said.

After amendments enacted by Council since approving the budget last May, authorized general-fund spending this current fiscal year is $167.2 million. That indicates a proposed 2.8% increase for the coming year. There have been no changes in budgeted $60.6 million sewer-fund spending. That indicates 5% growth. The proposed street-lighting budget is a 2.4% increase over $4.1 million this year. The general-fund reserve is expected to stand at $61.9 million and the sewer-fund reserve at $13.7 million at the end of the year.

Among other things, budget amendments provided for the cost of dog-control which the General Assembly made a county-government responsibility, outside attorneys' fees and the cost of implementing the licensing of building contractors.

In his address on Mar. 18 Coons said the increase in sewer fees will be used to pay for a "proposal for expanded sewer system investments" that he will submit to Council "within the month." He was not specific. Strine said later that referred to "planned upgrades" to the system both north and south of the Chesapeake & Delaware Canal.

Coons also said a plan for increasing police service "is in its early stages." Included in the proposed budget is the cost of training about 15 prospective county officers in a police academy class to begin next January. That many are currently being trained. Background information that Strine presented referred to a plan to conduct annual classes to at least keep pace with normal attrition in the county force.

"This is a budget based on what we can afford," Coons said. "Our outlook for [fiscal] '09 is one that calls for us to continue our work on cutting back our expenditures and showing fiscal restraint."

That challenge, he added, is "becoming more dramatic as our national and regional economy slows."

Closer at hand are labor contracts now being negotiated with unions representing a large majority of county employees. That was accented by an informational picket line outside the Redding Building, where Coons gave his address.

In his talk Coons said he is "hopeful -- even optimistic -- that by working with union leadership we can come to agreement on contracts that provide a decent living wage and real job security for the men and women of county government." The proposed budget provides for meeting the contractual obligation to make pay increases based on longevity, but doesn't provide for the usual annual upward adjustment of the pay scales to reflect an increase in the cost of living.

Coons said it is "critical" that overall increases in salaries, pensions and health-care benefits be limited to 4.5% if the county "is going to get its personnel cost ... in line with other similar governments."

As would be expected, Coons did not refer to this being an election year. He has announced that he is going to seek re-election to a second term. Former executive Thomas Gordon reportedly intends to challenge him in a primary election for the Democratic party nomination to run for the office.

In the press briefing Strine said political considerations did not figure in the recommendations he made while the proposed budget was being drafted.

Coons said it is necessary to adopt a "pay-as-you-go approach" to finance any new services. "We will have to raise revenues or find offsetting costs to pay for them," he said.

While he said he was precluded by the financial situation from suggesting any significant initiatives now, he did propose extending eligibility for assistance in making the down payment and paying settlement costs when buying a house to members of the National Guard, military reserves and active-duty armed forces.

Coons reiterated his position that the county needs  from the state General Assembly authorization to provide for additional sources of revenue to offset the near-total dependence on real estate-related financing. "We cannot continue our current 'band-aid' approach to financing county government indefinitely," he said.

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