Sussex County receives clean 2007 financial report

Georgetown, Del., January 29, 2008: Sussex County’s finances, despite declining real estate revenues over the past year, are nonetheless stable and being managed appropriately, a new audit report shows.

Sussex County Council, at its Tuesday, Jan. 29, meeting, accepted the Audited Financial Statements for Fiscal 2007 from the accounting firm of 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, Del., as of June 30, 2007.

During Fiscal Year 2007, Sussex County’s general fund expenditures, for the first time in 17 years, outpaced revenue by a little less than $2.7 million. The largest source of revenue for the County’s general fund, the realty transfer tax, netted $27.1 million, an $8.2 million, or 23 percent, decrease from Fiscal 2006. The decrease was not unexpected, as the County conservatively budgeted $28.7 million in realty transfer tax for Fiscal 2007.

Other related revenues, including fees collected through the Recorder of Deeds office, building permits, private road inspections and building inspections, also declined by a total of $3.4 million.

Despite the downturn in certain revenues, Sussex County officials were not caught off-guard, and budgeted accordingly for Fiscal 2007. Additionally, the County has spent the last several years building reserves with excess revenue so that services and long-term capital projects could continue no matter the economic conditions.

“Just like any other business or individual, government is not immune to the effects of the economy,” said Susan M. Webb, Sussex County Finance Director. “However, with proper financial management, Sussex County will weather the bumps.”

County Administrator David B. Baker said the report was in line with County expectations, and that staff will be keeping a watchful eye on 2008 revenues and expenses, just as it has always done. “Overall, the County’s revenues are down, and we expect this trend to continue into at least the next budget year,” Mr. Baker said. “But prudent planning and sound accounting practices can help lessen the pain.”

Council President Finley B. Jones Jr. said the financial report reinforces the fact that local government must carefully evaluate all its spending.

“There is no doubt in my mind that times might be a little tougher now in this changing economy,” Council President Jones said. “If Realtors aren’t selling and builders aren’t building, that certainly trickles down to us. So we have to keep that in mind when we budget, but I am confident the staff will make sure our finances are managed well.”

Sussex County recently received its fifth Certificate of Achievement for Excellence in Financial Reporting, presented by the Government Finance Officers Association of the United States and Canada. This is the highest award a government can receive for financial reporting. Mrs. Webb said she is optimistic the County will receive the same recognition for the Fiscal 2007 audit report.

The complete report and other information is available on the County’s web site at sussexcountyde.gov.

Fiscal 2007

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 $10.1 million in capital projects that included:
    • Land purchases to expand the main runway at the Sussex County Airport;
    • Building a new crosswind runway at the airport;
    • Design of an expanded South Coastal Library in Bethany Beach;
    • Construction of a new Emergency Operations Center near Georgetown;
    • Purchase of a hangar at the airport for a new airframe mechanics program, development in partnership with Delaware Tech;
  • The County contributed a total of $9.1 million toward the County’s pension fund and its post-retirement employee benefit trust fund;
  • The County funded 32 additional state troopers in addition to the normal State allotment;
  • An eighth paramedic unit was placed in service full time, and two replacement facilities were opened to provide improved service and response;
  • County sewer projects progressed, including:
    • Construction to expand the South Coastal Regional Wastewater Facility near Ocean View. This $22 million construction project expands the treatment facility’s capacity by 3 million gallons per day, as well provides a new administration building;
  • Sewer and water hook-ups increased by approximately 5 percent, to 56,992 equivalent dwelling units (EDUs). Meantime:
    • $16.0 million in developer infrastructure contributions were received for sewer expansion;
    • Construction moved forward for the Millville, South Ocean View and Miller Creek sewer projects;
    • An expansion to the Oak Orchard sewer district was approved, while planning proceeded for referendums, which were later approved, in both the Angola Neck and Johnson’s Corner areas.

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