Annual financial gain: Sussex County takes the fifth, report shows

GEORGETOWN – Once again, conservative budgeting practices and an improving economy have Sussex County basking financially in the black.

Audited financial statements for fiscal year 2014 that ended June 30 show the County ended the overall budget year with $4,021,640 in revenues of expenditures – the fifth consecutive year with gains in its operating fund.

County Finance Director Gina Jennings and Deputy Finance Director Kathy Roth presented the financial news at the Jan. 27 Council meeting, drawing kudos from the County’s elected governing body.

COUNTY ADMIN LOGO

“This report shows how seriously we take the public’s business, especially when it comes to managing and leveraging their hard-earned dollars,” said County Council President Michael H. Vincent, R-Seaford. “I am proud of the work our staff do each and every day to provide quality services to the people, and doing so in a fiscally responsible, efficient way. I know our constituents appreciate the best value for their investment, and Sussex County continues to deliver that year after year.”

“From my perspective as the new kid here, you – as a county – we have done a fantastic job,” said County Councilman Rob Arlett, R-Frankford, who expressed gratitude to the Finance Department and staff. “I truly wish that other entities; be it towns, be it the state, perhaps even our U.S. federal government, can take homage of what we do here in Sussex County. We are very focused on our expenditures. If all government agencies had the same thought process as you and your entire staff and this council, we would all be much better off for it.”

The audited FY14 financial statements from the licensed public accountant firm of BDO USA, LLP show actual revenues were $7 million above budgeted revenues for FY14, but a portion of those gains – approximately $3 million – were offset by additional expenses in the County’s capital projects fund. That resulted in the net overall gain coming in at approximately $4 million, still above the budgeted projection.

“We had a wonderful year where we budgeted very conservatively. Our revenues were up over last year – 16.4 percent over last year, which is $8 million,” said Ms. Jennings. “I do want to point out our expenditures also increased. But these are not operating expenses that are ongoing. These are more that we decided to pay down some of our long-term obligations, such as we contributed an extra million (dollars) in our pension fund. We also paid back holiday pay and comp pay, because they were accruing over time.”

“Although the County saw a 14 percent increase in revenues over the Fiscal Year 2014 budget, we continue to keep a sharp eye on our expenses,” said Ms. Jennings. “And to that end, our expenses for last year came in under budget, which I think demonstrates our fiscal stewardship and discipline in spending.”

County leaders, in anticipation of the additional revenue when the FY2015 budget was adopted in June, have designated the money for a variety of needs. The earmark list includes community development, emergency housing fund, pension fund, libraries, public safety, and community services.

As was the case in previous years, the 2014 financial boost was fueled by strong housing-related revenues, including realty transfer taxes, as well as fees collected through building inspections and building permits.

Realty transfer tax, which is the 3-percent levy on all property sales, is the single-highest revenue generator, accounting for 37 percent, topping property taxes, which accounted for 25 percent of  general fund revenue.

In FY14, realty transfer tax netted $20.9 million – $4.9 million above the amount budgeted and $3.5 million above the total for FY13.

Council members George Cole, R-Ocean View, and Joan Deaver, D-Lewes, expressed concern about dependency on realty transfer tax.

“I worry about that revenue source because it varies in so many millions of dollars,” said Ms. Deaver. “My concern is do we have enough stable income? I have a problem with that volatile situation. I just really want to see a plan on becoming less dependent on something that zooms up … and goes down fast.”

“Paramedics, the cost of that is just going to go up. There is no way we’ll ever see that go in another direction. Where the transfer tax is cyclical, different things could affect that,” said Mr. Cole, noting realty transfer tax supports various things, including the lion’s funding share for the County’s EMS paramedic service, which accounted for 28 percent of general fund expenditures in FY14. “Are you guys concerned about the realty transfer tax and how we rely on it here in Sussex County? The realty transfer tax is something questionable to rely on, and then paramedics are going up. Pretty soon I could see paramedics eating it all up, possibly. Then there wouldn’t be any money for these other things.”

“It is something that we have been planning for …,” said Ms. Jennings. “But as we have been building the budget we have been capping that realty transfer tax at $16 million. Even though we are seeing these increases, we do not want to rely on those increases going forward at all.”

Asked by Mr. Arlett for a comparison with other counties and governmental entities, Ms. Jennings said Sussex County banks on a more conservative budgetary approach.

“We are very conservative when compared to other entities,” said Ms. Jennings. “I don’t want to call some people out, but others entities budget 90 percent of their revenue where we are budgeting 80 percent of our revenue, so that we do always have that buffer in there.”

Sussex County has submitted the Fiscal Year 2014 financial 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 – an award Sussex County has received the past 12 years with anticipation of a 13th year.

“And we hope to get that again this year,” said Ms. Jennings.

“Every year we come out looking good. You make us look good. And we really appreciate that,” said Mr. Vincent.

“I am glad that we have women running our financial issues here in Sussex County,” said Mr. Cole.

“Perhaps,” added Mr. Arlett, “one should consider Sussex County as a role model for all as it relates to how to run a government.”

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

News Editor Glenn Rolfe can be reached at grolfe@newszap.com

You are encouraged to leave relevant comments but engaging in personal attacks, threats, online bullying or commercial spam will not be allowed. All comments should remain within the bounds of fair play and civility. (You can disagree with others courteously, without being disagreeable.) Feel free to express yourself but keep an open mind toward finding value in what others say. To report abuse or spam, click the X in the upper right corner of the comment box.