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December 2008

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County government received an early Christmas present -- big enough to cover more than a quarter of its expected budget shortfall.

A three-judge Delaware Supreme Court panel granted an appeal from an adverse $9.1 million Superior Court judgment in the suit involving the still-unopened hotel along Interstate 95 southwest of Wilmington. The court ruled that Joseph Capano and Alfred Vetri did not prove that the former Gordon administration discriminated against them in refusing to allow the hotel to open after it was discovered in 2000 that the building had been constructed larger than had been approved. The opinion said there was more than enough justification to deny a certificate of occupancy and to turn down requests for zoning-law variances.

The lower court had ordered county government to pay damages and lawyer fees. Money set aside to do so pending the appeal was a significant part of the most recently projected $32 million gap between revenue and spending during the fiscal year ending next June 30. The county, which has been publishing increasingly gloomy financial news for more than two years, appeared to be downplaying the first major favorable development to come along. "This is good news, but does not solve the financial challenges that we face either in this fiscal year or next year," county spokesman Charles McLeod said. 

    

AHEAD OF THE NEIGHBORS: Delaware was the 13th fastest growing state in the nation last year, according to the U.S. Census Bureau. While its 1.3% growth rate admittedly was on a much smaller base, it was well head of Pennsylvania's, New Jersey's and Maryland's and matched the pace set by the southern region of the United States, according to estimates made public on Dec. 22. The bureau said Delaware gained 11,139 new residents between July 1, 2007, and July 1, 2008, bringing its population to 873,092. That was up from 783,600 heads counted in the 2000 census. Delaware is the 45th most populous state.

    

County Executive Christopher Coons announced several budget and service cuts to take effect Jan. 1 and reduce spending during the remainder of this fiscal year by more than $2.5 million.

The move, which comes on top of cuts announced in November and unpaid extra days off for county government employees during the Christmas-New Years holidays, was made necessary by a continuing worsening of the county's financial situation, he told employees in an open letter distributed on Dec. 18. "Our financial situation requires hard choices, including lay-offs for some of our part-time workforce and I regret that. But we cannot continue business as usual in light of our growing budget deficit," the letter said. Since November, that shortfall has increased by another $2 million to $32 million.

Major service cuts include elimination of Sunday and Thursday evening hours at county-operated libraries and reducing financing of contract libraries by 8%. Adult activity centers in Hockessin and Garfield Park will be closed on Fridays. Athletic fields maintenance will be reduced and trash pickup in county parks eliminated. The largest single cut will involve reductions in maintenance and engineering contracts. Eighteen part-time and seasonal employees will be laid off. Coons and his top administrators will take an unpaid day-and-a-half off each month between now and the end of June, which is equivalent to a 7% pay cut. (CLICK HERE to access a complete list of the cuts.) (CLICK HERE to read previous Delaforum article.)

County residents and businesses are all but certain to face a hefty increase in the property tax rate in fiscal 2010. Coons will present a proposed budget to County Council in March. Council will hold hearings on it in April and approve a budget in May.

    

County Council will have to consider proposed amendments to the 'workforce' housing section of the Uniform Development Code without the benefit of a Planning Board recommendation.

The six members of the nine-person board who attended its business meeting on Dec. 16 split even on whether to recommend approval of the proposed ordinance, sponsored by Penrose Hollins, when it comes before Council, probably on Jan. 13. The opposition was to the provision in the amending legislation which would prevent renting any of the 'workforce' units. They did not side, however, with developers who argued against that change on economic grounds, but focused instead on lack of any provision to deal with extraordinary situations, such as death of an owner, which could result in a housing unit being left vacant.

The Department of Land Use, which drafted Hollins's ordinance, recommended its approval. General manager David Culver said the changes it contains respond to public comments received since the original measure was enacted last February. Overall, the department report said, it "considers the 'workforce' housing initiative to be a success." Board member Robert McDowell said the basic purpose of 'workforce' housing laws is to promote home ownership. But board chairman Victor Singer said, "What's before us is faulty because it's not operable without a rental opportunity." (CLICK HERE to read previous Delaforum article.)

    

HOLIDAY DISPLAY:

Rockwood Mansion Park is decked out with lights. Either driving through or stopping to walk around, visitors to the county park can enjoy a pleasant holiday experience through the Christmas-New Year season. The park entrance is on Washington Street Extension just north of the Wilmington city line. There is no admission charge.

    

BUDGET APPROVED: The Brandywine school board routinely approved the final version of a $136.8 million budget for the current fiscal year but, as the process of preparing a fiscal 2010 spending plan begins, was warned that the state's revenue shortfall and the national economy crisis pose significant threats. "I don't know what the impact will be, but there will definitely be one (impact)," David Blowman, the district's chief financial officer, told the board before its unanimous budget vote on Dec. 15. "There are not many places where we can [cut spending] without getting into the real core of what we do."

The final budget is $1.7 million higher than the preliminary one approved in September, mainly reflecting local costs related to a slightly higher-than-projected enrollment. A key figure, Blowman explained, is the $4.7 million in local money expected to be available to carry forward when the current year ends on June 30. With state government projecting a revenue shortfall "of a magnitude now that is overwhelming," he said it is uncertain how long the present policy of exempting public education from bearing most state budget cuts can hold. "We could be looking at double what we were talking about last spring," he said. (CLICK HERE to read previous Delaforum article.)

    

With the economy continuing to deteriorate dramatically, state government's official forecasters are preparing to lop $35.5 million from the revenue estimate issued just a month ago.

When it meets on Dec. 15, Delaware Economic & Financial Advisory Council will likely project net revenue of $3,224.5 million in the fiscal year ending June 30, 2009, down from $3,356.7 million the state took in last year and from the $3,260 million its revenue committee predicted at a special meeting -- only the second in its 31-year history -- in November. The outlook for fiscal 2010 is even worse. That forecast, which forms the basis for next year's proposed budget, was lowered $61.3 million to $3,085.9 million from the $3,147.2 million that was forecast in November.

The recession "has gone from mild to serious to severe in just three months" since the full council last met in September, David Gregor, its liaison with the state finance department, said at a working meeting of its revenue committee on Dec. 12. Revenue streams experiencing the sharpest declines during the autumn quarter were personal income, bank franchise and real estate transfer taxes. The consensus was that this recession will surpass in length and depth the recession in the early 1980s, which proved to be the worst since World War II. "We're certainly in that ballpark," Gregor said. (CLICK HERE to read previous Delaforum article.)

    

BEST SCHOOL: Charter School of Wilmington is the ninth best charter high school in the nation and ranks 42nd among all public high schools, according to data published by U.S. News magazine.  Slightly more than 21,000 schools were evaluated by independent School Evaluation Services, an education data research and analysis firm. Its evaluations are generally considered the most comprehensive available. Top schools were placed into gold, silver, bronze or honorable mention categories. Indian River High and Laurel Senior High -- both listed as bronze -- were the only other Delaware schools that made the lists.

    

TOP RATED: County government has hung onto its much-touted triple-A bond ratings despite its  financial problems, but Standard & Poors, Fitch and Moody's, the top rating agencies, said they will be keeping a close eye on how it handles the situation. "We're not the only [state or local] government facing these issues," acting chief financial officer Ed Milowicki told County Council's finance committee on Dec. 9. The negotiated sale of $90 million of general purpose and sewer bonds and up to $25 million to refinance existing debt has been put off until after the turn of the year. Milowicki said that would be "better timing."

Meanwhile, the committee, which includes all Council members, voted to reduce the amount each member can allocate in grants to non-profit organizations to $10,000 from $15,000 and the maximum any one organization can get to $1,500 from $2,500. Members' office allowances would be cut from $4,500 to $3,500. The reductions were included in a 'do-our-part' plan presented by committee chairman George Smiley to trim $192,716 from Council's fiscal 2010 budget request. The major element would be keeping the position of financial advisor vacant, an estimated 'savings' of $108,000. (CLICK HERE to read previous Delaforum article.)

    

MORATORIUM APPROVED: County Council voted, by an eight-to-five margin, to suspend the controversial 'workforce housing' ordinance until Jan. 31 or when it enacts, possibly on Jan. 13, a pending ordinance to amend  the law to address what critics claim are its unintended consequences, whichever comes first. Before the vote at its session on Dec. 9, state senator Bruce Ennis told Council that state legislation conditioning county approval of development plans on public school and highway capacity is "high on our agenda" when the General Assembly convenes in January.

Voting against the moratorium, which does not affect the 17 pending plans, were John Cartier, Penrose Hollins, Stephanie McClelland, Jea Street and Robert Weiner. Susan Moak, a real estate agent, told Council that there presently are more than 2,000 houses in the $80,000 to $300,000 'affordable' price range in the county listed for sale and that "the values of available properties are falling rapidly." Moreover, she testified, "building new homes over the already exiting homes we have now will reduce the value of existing homes" on the market and reduce appraisals on properties that owners may later wish to sell. (CLICK HERE to read previous Delaforum article.)

    

UNPAID HOLIDAYS: Financially strapped New Castle County government is offering its workers three extra days off during the Christmas-New Year holiday, but there's a catch. Those who agree not to come to work on Dec. 24 and 26 and Jan. 2 won't be paid for that time off. County offices will be closed on Dec. 25 and Jan. 1, which are paid holidays. A brief press statement issued by County Executive Christopher Coons's office on Dec. 3, disclosed that talks are underway with county unions about "additional furlough days," which presumably would be mandatory, as part of a general cost-cutting effort. (CLICK HERE to read previous Delaforum article.)

    

MOTIVES QUESTIONED: Some members of County Council charged that the effort to stall 'workforce' housing is more about preventing diversification of the population than it is about school and road capacity. George Smiley said it's an attempt "to keep 'those people' out of southern New Castle County." Robert Weiner was more blunt saying that it targets "people who may not share [present residents'] skin color or the size of their pocketbook." William Powers, however, argued at a meeting of Council's land use committee on Dec. 2 that the law "gives a lot away but does not gain anything."

Powers and William Bell, whose districts span the Chesapeake & Delaware Canal intend to seek a vote on a measure that would suspend the law to provide time to address what they consider its shortcomings. The vote is scheduled for Dec. 9 when Council holds its final session of this year. That would be despite the fact that a major revision of the law is working its way through the vetting process and is expected to come before Council early in the new year. At a recent Planning Board hearing representatives of the development community reportedly objected to a provision that would eliminate rental housing from the scope of the law. (CLICK HERE to read previous Delaforum article.)

    

EXEMPT OR NOT?: County officials are going on an assumption that the U.S. Postal Service must comply with zoning laws when it relocates its mail-carrier facility to Concord Plaza. James Smith, assistant general manager of the Department of Land Use, said that, even if the service enjoys federal supremacy, there is still a requirement for it "to take action to the greatest extent practicable" to comply with local planning and development standards. Councilman Robert Weiner has asked Buccini Pollin Group, which owns Concord Plaza, to hold a community meeting to present details of its plan to lease a building to the postal service.

Last updated on December 23, 2008

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