Georgetown, Del., May 19, 2009: Financial times are tight, but they can be overcome, as Sussex County’s proposed budget for Fiscal Year 2010 shows.

County leaders on Tuesday, May 19, 2009, unveiled the proposed $128 million budget for next year, a spending plan that, as presented, holds the line on property taxes and avoids employee layoffs and pay cuts, yet funds critical public services despite declining revenue.

County Administrator David B. Baker presented to County Council the proposed budget for the new fiscal year that begins July 1. Mr. Baker was joined by Finance Director Susan M. Webb, Budget and Cost Manager Kathy L. Roth and Accounting Division Director Gina A. Jennings in proposing the 2009-2010 plan, titled “Trying Times, Modest Measures.”

The proposed total budget once again keeps in place the County’s property tax rate of 44.5 cents per $100 of assessed value, making this the 20 year without an increase. However, a flat increase of $8 per year for sewer and water customers will be added to cover cost increases, while sewer connection fees will rise by about 5 percent for new users. th

“Many changes have occurred in the economy and in County government in the past year, and this budget reflects that,” Mr. Baker said. “The result is a budget that is balanced and lean, but one that is achieved without resorting to layoffs or cuts in services.”

County Council will hold a public hearing on the proposal during its 3 p.m. meeting Tuesday, June 16, 2009, in council chambers at the County Administrative Offices building on The Circle in Georgetown. Council must adopt a budget by June 30.

The new budget calls for limited spending in County government in the next year, and continues a policy of budget reductions implemented by the County Council in January. Specifically, the County will realize savings in the new fiscal year through a combination of cost reductions, spending changes and revenue enhancements.

For example, the General Fund, or operating, portion of the budget calls for reimbursements from sewer and water districts for administrative costs previously paid for from the operating budget. Services provided by Administration, Engineering, Personnel and Treasury employees, as well as interest from loans, are attributable to the districts, totaling $1.5 million.

Another area of savings will come through reducing Grant-in-Aid funding to more than 100 organizations and non-profit groups, collectively saving $2.5 million.

The County also has reduced by 26 the number of full-time positions during the past year through attrition and more efficient use of staff. The net result is $1.7 million in savings.

The proposed budget, however, avoids layoffs and mandatory furloughs being considered elsewhere. Also, no reductions in salary or working hours are proposed, and benefits such as dental and vision reimbursement, vacation, sick leave and holidays, as well as a zero-employee-contribution pension plan, will remain intact.

However, the County will change its health insurance plan for all employees, including elected leaders. Increased contribution requirements and higher co-pays will save taxpayers a little more than $1 million, but maintain a high-quality plan.

Other savings will come from delaying purchases, freezing new hires and limiting travel. And recently adopted initiatives, such as an early retirement option for qualified employees, as well as revenue enhancers, such as fee increases for the Clerk of the Peace office, are factored in.

“This budget represents a concerted effort by our employees to provide County services with less staff, to cross-train so they can perform other functions, to use fewer supplies, to work less overtime, to voluntarily take unpaid days off, to collect delinquent taxes, and to provide ideas to save money for our taxpayers,” Mr. Baker said. “We commend them for that. It is because of them and others that we can present this modest, responsible budget.”

Mr. Baker said the sluggish national and state economy continue to affect the County’s bottom line, with revenues in the new fiscal year expected to drop as they did in the current year. The proposed total budget is down from the 2009 budget by approximately $14 million, or 9.8 percent. Of that, the County’s general fund revenues and expenditures have declined $8.6 million, or 16 percent.

Budget writers this year had to again be mindful of declining revenue from the real estate transfer tax – the 3 percent levy attached to most property sales, and split between the State and the County or town, depending on where a property is located. In the current year’s budget, the estimated revenue from realty transfer was $17.9 million. For Fiscal 2010, Sussex County projects to collect $12.7 million in realty transfer tax, a 29 percent decrease.

In light of the continued revenue loss, officials said cutting costs when possible – reductions implemented in Fiscal 2009 have already saved more than $4 million – is the rule to live by.

“We’re doing all of this by reducing our spending and simply doing without,” Mrs. Webb said. “When we say doing without, we mean cutting out anything that can be cut, things like travel, delaying equipment purchases, not filling many positions. The list goes on.”

County Council President Vance C. Phillips said the budget team has done a remarkable job of balancing the County’s needs, while realizing spending habits had to change.

“We are continuing the tradition of conservative budgeting in Sussex County. But one significant difference in this budget is that it is truly balanced, without the dependence on reserve funds as we’ve seen in years past,” Mr. Phillips said. “Ultimately, County government may have to take further action to stem the tide of red ink should these spring showers turn into the flood some are predicting. This budget is a step in the right direction.”

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A copy of the proposed Fiscal Year 2010 budget, as well as the accompanying budget letter, can be downloaded from the County’s website, at sussexcountyde.gov.