Despite drop in revenues, Sussex County receives clean 2008 financial report

Georgetown, Del., Feb. 24, 2009: Despite a continued slide in various revenues, a deficit for the second year in a row and the prospect of continued budget reductions in the months ahead, Sussex County’s financial numbers are accurate and meet generally accepted accounting standards, a new independent audit report shows.

Sussex County Council, at its Tuesday, Feb. 24, 2009, meeting, accepted the Audited Financial Statements for Fiscal Year 2008 from Jefferson, Urian, Doane & Sterner, P.A., Certified Public Accountants. The auditors released an unqualified report noting that the financial statements “present fairly, in all material respects, the respective financial position” of Sussex County as of June 30, 2008.

The audit report is presented each year to show how County government’s finances fared in the previous fiscal year.

During Fiscal Year 2008, Sussex County’s general fund expenditures, for the second year in a row, outpaced revenue by approximately $3.3 million. The largest source of revenue for the County’s general fund, the realty transfer tax, netted $20.6 million, a decrease of $6.5 million, or 24 percent, from Fiscal 2007.

The decrease was no surprise, though, as the County conservatively budgeted $22.4 million in realty transfer tax for Fiscal 2008. Other related revenues, including fees collected through the Recorder of Deeds office, building permits and building inspections, also declined by a total of about $2 million, or 19 percent, from the previous year.

Officials expect revenues to continue to decline, and in the short term, the County has implemented some $7 million in various cost-saving measures to ease the burden on the current year’s budget.

“This report shows that we have a strong financial foundation to work from, despite the revenue decreases, and together with the cooperation of the departments, we will use our resources wisely as we approach the 2010 budget,” said Finance Director Susan M. Webb. “But we don’t really know where the bottom is of this economic crisis, therefore we must govern the County’s finances cautiously and realistically.”

County Administrator David B. Baker said the report was in line with County expectations. “County finances are a major concern given the further reductions in housing related revenues this year,” Mr. Baker said. “I thank our staff for making reductions in the current budget, and we will evaluate all expenditures in developing next year’s budget.”

Council President Vance C. Phillips said a possible $11 million drop in revenue in the coming year, coupled with pending reductions in State money, such as $1.3 million in paramedic funding, will further complicate the County’s financial picture.

Sussex County will submit the audit report to the Government Finance Officers Association of the United States and Canada for consideration of its Certificate of Achievement for Excellence in Financial Reporting award. The County has received the award the past six years. Mrs. Webb said she is optimistic the County will receive the same recognition for the Fiscal 2008 audit report.

The complete report and other information will be available on the County’s website at sussexcountyde.gov.

Fiscal 2008

Financial Highlights

  • Sussex County maintains its AA bond rating by Standard & Poor’s, “reflecting consistently strong financial performance and management continuity;”
  • Sussex County continues its funding of non-sewer projects on a pay-as-you-go basis and avoids issuing debt;
  • Sussex County continued with $9.5 million in capital projects that included:
    • Land purchases;
    • Library expansions;
    • Airport & Industrial Park improvements;
  • The County contributed a total of $9.6 million toward the County’s pension fund and its post-retirement employee benefit trust fund;
  • The County funded 36 additional state troopers in addition to the normal State allotment;
  • County sewer projects progressed, including:
    • Completion of the project to expand the South Coastal Regional Wastewater Facility near Ocean View. This $20 million construction project expanded the treatment facility’s capacity by 3 million gallons per day, and provided a new administration building;
    • Phasing-in operations of the new Miller Creek and South Ocean View sewer districts;
  • Sewer and water hook-ups increased by approximately 5 percent, to 59,774 equivalent dwelling units (EDUs). Meantime:
    • $8 million in developer infrastructure contributions were received for sewer expansion;
    • Construction moved forward for the Millville sewer project;
    • Planning and designed moved forward on four new sewer districts, including Angola Neck, Johnson’s Corner, Oak Orchard expansion and the Golf Village areas.

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