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May 25,  2011

Council enacts budget
amid heated wrangling

As happens each year, New Castle County's operating budget and the package of related ordinances were approved by County Council by overwhelming majorities and intact as received from the administration. What was different this time around was their serving as a backdrop for a verbal donnybrook as opposition to Council President Tom Kovach, which has been simmering since he took office, exploded in a round of barbed criticism.

On all but one of the roll call votes, Kovach stood alone at the short end of 12-to-one tallies. William Powers joined him in opposing a 3.9% increase in the sewer fee.

Although approval of the measures was a foregone conclusion, that didn't prevent an acrimonious exchange with political overtones.

Kovach lit the fire when he wrote in a newspaper article published the day before the May 24 votes that "we cannot continue to increase spending and future liabilities while failing to take advantage of the many opportunities to refuel and refocus a government full of redundancy and inefficiencies."

Councilman George Smiley responded sarcastically at a budget committee meeting before Council's plenary session, 'reminding' Kovach that the committee's standing agenda provides for a 'roundtable discussion' at which members can bring forward ideas and suggestions concerning county finances. He said members "should work with each other and not the [newspaper's] editorial board." Kovach did not reply to Smiley's comment at that meeting.

At the evening session, however, Smiley pressed the attack, telling Kovach, "You should propose something that is workable, not something to get headlines," and adding, "You don't know what you're talking about."

"I think we're getting off the track," Kovach said.

"We're not off the track; you're off the track," Smiley retorted.

It was Jea Street who launched a barrage of criticism by inquiring rhetorically if he had "missed something." Noting that, as far as he knew, no substantive amendments to the budget ordinance had been proposed during the eight weeks of Council's budget hearings.

Janet Kilpatrick picked up on the point. "There are no amendments proposed or put forward where we ought to go if we don't pass this budget," she said.

Kilpatrick, like Kovach, is a Republican, one of three on the Democrat-dominated 13-member Council. Since Kovach defeated Councilman Timothy Sheldon in a special election in January to fill the vacancy created when Paul Clark moved from the Council presidency to succeed now-U.S. Senator Chris Coons as County Executive, he taken what appear to be politically conservative positions on some matters. Council has traditionally functioned in a nonpartisan fashion.

Sheldon, who has steered clear of renewing their pre-election campaign sparring, got into the budget fray by offering Kovach some 'advice'. "Come up with some legitimate numbers [but] not at the 11th hour," Sheldon said.

Penrose Hollins objected to "all this nonsense about what we ought to have done" coming at the last minute. "If he had some great budget ideas, he should [have] come forward during the budget process, not on the night we're going to pass the budget," Hollins said.

One of the key points Kovach raised was a claim that Clark was proposing a 5% pay raise for county employees. Smiley pointed out that what actually was proposed was re-establishing pay scales in effect before the employees took a 5% across-the-board reduction during the present and last fiscal years. Moreover, Smiley said, the budget anticipates concessions from current labor negotiations that will involve or be equivalent to a new 2.5% cut.

"Is this a budget that is truly balanced?" Kovach said, adding that it would be "fiscally irresponsible" to enact a budget that anticipates cost savings not actually realized.

Gregg Wilson, acting chief administrative officer, replied, "If we are unable to get that (the concessions), the County Executive will be forced to consider reductions in force." County government is required by law to operate with a balanced budget. Clark has said that layoffs are the alternative to concessions. No-layoff provisions in current labor contracts expire on June 30. The new fiscal year begins the next day.

Kovach also noted that the capital-spending budget calls for exceeding by two percentage points the 20% ceiling on debt service in the sewer budget. "Why do we set a 20% ceiling if we're not going to observe it?" he said.

Ed Milowicki, acting chief financial officer, said the three Wall Street rating firms which all gave last year's New Castle County bond issue their highest rating, all were aware of that. But, he added, that was offset by the fact that county government operates its sanitary sewer system as a utility with fee-generated revenue covering costs.

The budget Council enacted authorizes spending $241.9 million in fiscal year 2012. Of that, $164 million will finance general operations and $69 million will go to pay for sanitary sewer services. An amendment Smiley sponsored transfers $11,841 from the finance department to the ethics commission to pay, for the most part, for training. The capital budget is $46.3 million. The property tax rate remains unchanged at 70.06 for each $100 of assessed value in unincorporated areas, scaled down to 24.36 in municipalities in proportion to the amount of county-provided services they receive.

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Read previous Delaforum article: Proposed county budget seeks long-range structural change

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