Proposes Fiscal Year 2018 budget that invests in innovative public safety, libraries and other critical infrastructure and makes spending cuts without reducing public services
Click here to review the County Executive’s Fiscal Year 2018 Budget Presentation slides
Wilmington, DE – Tonight, County Executive Matthew Meyer presented a balanced Fiscal Year 2018 budget that invests in public safety, libraries, core services and infrastructure, and makes progress in reducing expenditure growth to tackle a widening structural deficit.
Shortly after taking office in January, the County Executive’s administration discovered that county government faced a $5.2 million deficit in the current fiscal year, and that without action to address a long-term structural imbalance between revenues and expenditures the annual deficit will grow to more than $20 million within two years.
“New Castle County provides critical services our people need every day, from public safety and emergency management, to the state’s largest sanitary sewer and library system and 250 parks,” County Executive Meyer said. “That record of service is built on the quality of our county employees who work hard day and night to keep us safe and drive our quality of life. During this challenging fiscal environment, we are working hard to meet our obligations, support our people and embrace new ideas and collaborations to meet our core mission while spending within our means. When I ran for office, I promised a county government that is transparent and responsive and that we could do more with less, and my proposed Fiscal Year 2018 budget meets that goal.”
County Finances: Driven by growing structural deficit and non-discretionary expenses
After the November election, Meyer and his leadership team initiated a detailed review of key county financial data, cost drivers and other expenses. It has revealed that:
- County government expenses are exceeding revenues and in the current fiscal year the structural budget deficit is estimated at $5.2 million. Meyer’s team found that this structural deficit will widen over the next three years, with expenditures growing by an annual rate of 4.8%, more than three times the projected rate of revenue growth of 1.5%.
- To balance its books the county has tapped into its cash savings accrued over time and held in its Tax Stabilization Reserve Fund, drawing it down by more than $25 million over the past four years. At the current rate of spending, this fund will be depleted within two years.
- County spending is driven by non-discretionary expenses which account for 87.7% of general fund spending. These include personnel salaries and benefits which account for 77% of general fund spending and debt service which accounts for 10.7% of general fund spending.
Setting a new course for fiscal responsibility
“New Castle County families cannot spend more than they bring in, and neither can our government, and so within weeks of taking office we acted responsibly by taking several preliminary steps to reduce spending,” County Executive Meyer said.
The immediate cost containment strategies initiated in February 2017 included:
- An intensive hiring review of all vacant positions, including all recruiting and interviewing currently underway;
- Suspension of the policy allowing active employees to cash out unused vacation time;
- Suspension of discretionary overtime, except for Public Safety and other critical needs;
- Suspension of all out-of-state travel;
- Reduction in executive office spending, including outside contracts
During tonight’s address, Meyer announced that these cost containment measures will continue through the next fiscal year as the county expands its effort to establish more efficient government services. Meyer laid out five core budgeting priorities that are guiding his administration’s work to manage county finances in a responsible manner:
- Live within our means, reducing spending to levels consistent with revenue.
- Reduce debt spending.
- Govern honestly, transparently, and efficiently.
- Collaborate within county government and with other levels of government to improve public services.
- Invest aggressively in our future.
“I am committed to putting our financial house in order to ensure that we do not leave to our successors the structural deficit we found ourselves facing on day one,” Meyer said. “My team and I are work diligently to identify efficiencies and other cost reductions to restore fiscal discipline.”
Doing more with less
As it prepared its Fiscal Year 2018 budget, the county identified a $13.8 million Fiscal Year 2018 deficit, driven by $17.6 million in cost drivers that consist primarily of personnel costs ($8.8 million), debt service ($3.3 million) and general fund cash required to fund capital expenditures ($3.1 million). To meet this anticipated deficit, Meyer announced that his Administration has identified $5.1 million in spending cuts for Fiscal Year 2018, including:
- Personnel Cost reductions $2.11 million
- General Fund Cash to Capital $0.98 million
- Base Budget Reductions $0.71 million
Meyer also announced his support for four initiatives to reduce spending in the years ahead:
- The County Executive has commissioned an intensive performance review to begin in April that will evaluate performance and efficiency of each major function of county government. This review, which is being provided at no cost to taxpayers, will recommend ways to eliminate inefficiencies and restore fiscal balance.
- Legislation is being proposed by Council members Hollins, Smiley and Powers to modify the apprenticeship contracting requirements for county construction projects to be more inclusive of small, minority and women-owned businesses, keep construction spending in state and save $2-5 million for the county each year.
- A package of good government legislation to be sponsored by Councilmembers Kilpatrick and Smiley will expand the county’s anti-nepotism ordinance, prevent lame-duck political appointments, and provide additional oversight of county investments.
- Implementing a culture of honesty and ethics.
Investing in core functions
The proposed Fiscal Year 2018 budget invests new dollars in public safety, the fire service, and county library system, including:
- $160,000 in new funding to support the county’s innovative RAVE Panic Button, a safety solution that integrates government facilities, schools, community centers and other organizations seamlessly into the 911 Center, police and school response procedures.
- $134,000 in new funding to provide annual maintenance support for a Fast Track DNA machine purchased with grant funding. The Rapid DNA Machine serves as a cost-effective solution to test DNA gathered from a crime scene in support of the county police property crime initiative.
- $120,000 in new funding to support the county police’s local DNA database established in July 2016 to improve its response to increases in property crimes through quicker testing of crime scene samples.
- $4,251,305 in continued funding to support the fire service through grants to fund a portion of their operating costs.
- New Castle County will build on its world-class library system by opening the new Route 9 Library and Innovation Center currently under construction. The recommended Fiscal Year 2018 budget includes $621,675 in new funding will pay personnel costs, contractual services and other expenses related to the operation of the facility.
Final Budget Totals
The proposed Fiscal Year 2018 Operating and Capital Budgets total $284,013,694. It reduces the general fund capital budget by more than half from Fiscal Year 2017 levels to $15.3 million and total capital budget spending, including the sewer fund, is reduced by 30% to $35.4 million.
“Our proposed budget invests in our future through targeted investments in health, safety, qualify of life and economic growth, while making difficult choices to align expenditures with revenues in the years ahead,” County Executive Meyer said. “I look forward to engaging with County Council and others to finalize a Fiscal Year 2018 budget as we continue to build a county government that is more honest, open, and responsive.”
County Executive Meyer will host his second Facebook Live Town Hall on the County’s Facebook page this Thursday, March 30 at 7:00 p.m. to engage with members of the public about the proposed Fiscal Year 2018 budget and hear their feedback about the county’s spending priorities.