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TOWN MANAGER’S WEEKLY REPORT
Weekly Report 2017-03-24.doc Page 1
UPCOMING MEETINGS & EVENTS …
Sussex County Association of Towns: Wednesday, April 5, 6:00 PM, hosted by South Bethany
Sussex County Association of Towns – Legislative Breakfast: Friday, April 7, 9:00 AM, CHEER Center
Town Council Meeting: Wednesday, April 12, 6:45 PM Public Hearing; 7:00 PM Regular Meeting
Planning Commission: Wednesday, April 19, 6:00 PM, Town Hall Town Council Meeting: Wednesday, April 26, 7:00 PM, Regular Meeting, Town Hall Delaware League of Local Governments: Thursday, April 27, 5:30 PM, Duncan Center
(Dover)
UPDATES FROM DEPARTMENTS …
Finance
o As of March 24, the Town has collected $889,179 (99%) of the January 2017 Utility Billing ($895,193)
o As of March 24, the Town has collected $1,508,672 (98%) of the May 2016 Property Tax Billing ($1,533,832)
o Staff attended Women Leading Government Meeting (Kristen Dabrowski, Laura Givens)
o FY 2018 Budget Workshop held on March 23 (Bill Bradley, Gene Dvornick, Laura Givens, Olga Holm, Bob Holston, R. L. Hughes, Rebecca Johnson-Dennis, Chris Lecates, Eric Rust, Bill West)
Wastewater
o Lagoon depths: Large Lagoon is 14.50 feet and Small Lagoon is 7.00 feet o Installed new pump at Delaware Tech Pump Station o Aztec Construction installed new plug valve at Gordy Street Pump Stations (See
Photo 1)
Police
o Departmental Press Releases issued as warranted
TOWN MANAGER’S WEEKLY REPORT
Weekly Report 2017-03-24.doc Page 2
Public Works
o Changed out banners and lights on The Circle o Repaired sidewalk on East Market Street near North King Street o Repaired damaged sewer lateral on West North Street
Planning
o No Report this week
TOWN MANAGER’S UPDATE …
Addressed property owner concern with neighboring property Met with Farr Engineering to discuss possible small projects in Town (Gene Dvornick,
Bill West) Received DelDOT Agreement for Bramhall Street ($79,900) Met with a representative of Parkeon to review current parking meter process and discuss
their parking meter solution (Gene Dvornick, Bobby Fletcher, Laura Givens) Prepared information for local State Representative Attended Perdue Community Partner Event – excellent presentation on the Company and
the Georgetown Facility Met with local resident to review issue related to a minor site plan amendment Met with property owner to review Condemnation Order and implications (Gene
Dvornick, Michael Picarello, Mayra Reyes) Completed required documentation (from the Town) for USDA review and approval of
Town Hall & Annex Project Started work on SCAT Legislative Breakfast Presentation Drafted proposed revisions to Town Code, Chapter 29 – Personnel. Under review by
staff and Town Solicitor Participated in webinar to review proposed platform for next generation of Town website
(Gene Dvornick, Laura Givens) Governor Carney released his Proposed FY 2018 Budget – no reductions in Municipal
Street Aid, Community Transportation Funds or Reallocation of Realty Transfer Tax included
Prepared and distributed a Press Release for Burger King Road rehabilitation work Followed up on several Code Enforcement items
TOWN MANAGER’S WEEKLY REPORT
Weekly Report 2017-03-24.doc Page 3
Photo 1 - Old Plug Valve (Gordy Street Pump Station)
Photo 2 - Broken Sewer Lateral (West North Street)
TOWN MANAGER’S WEEKLY REPORT
Weekly Report 2017-03-24.doc Page 4
THIS REPORT AND ANY ATTACHMENTS ARE ONLY BEING SENT ELECTRONICALLY UNLESS OTHERWISE REQUESTED
1
1
Town of Georgetown
Budget Workshop
Thursday, March 23, 2017
2
Agenda
• Current Economic Realities
• Impact on Town of Georgetown
• Building on Success
• Initial FY 2018 Budget
• Addressing the Deficit
• Considerations
• Next Steps
2
3
Consumer Price Index
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
2000
2002
2004
2006
2008
2010
2012
2014
2016
December 31
4
Unemployment Rate
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Year End
US Delaware Sussex County
3
5
Housing Data (SF Residential)
0
50
100
150
200
250
300
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Year
Units Sold Days on Market
6
Median Home Sales Price
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
4
7
Realty Transfer Tax
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2001
2003
2005
2007
2009
2011
2013
2015
2017
Fiscal Year
8
Property Assessments
$0
$10
$20
$30
$40
$50
$60
$70
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Fiscal Year
Ass
essm
ent
in M
illi
ons
Total Taxable Exempt
5
9
Property Tax Billed
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Tax Increase History2005: $0.30 Cents 2007: $0.08 Cents2010: $0.40 Cents2012: $0.21 Cents2015: $0.03 Cents
10
Delinquent Property Taxes
0.01% 0.05% 0.09%
1.63%
0.02% 0.01%0.07%
0.07%0.08% 0.14%0.15%
0.22%
0.70%
0.34%
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Fiscal Year
Del
inq
uen
t A
mou
nt
0.00%0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60%1.80%
Per
cen
t of
Tot
al B
illed
6
Budget HistoryRevenues FY 2014 FY2015 FY2016 FY2017 FY2018
General Fund $ 2,961,817 $ 3,031,627 $ 2,969,005 $ 3,153,171 $ 3,245,814
Water Fund $ 1,177,000 $ 1,047,796 $ 1,088,500 $ 1,279,025 $ 1,279,025
Sewer Fund $ 1,994,750 $ 1,810,002 $ 1,815,543 $ 1,846,000 $ 1,896,500
Total Revenues $ 6,133,567 $ 5,889,425 $ 5,873,048 $ 6,278,196 $ 6,421,339
Fund Transfer $ 478,619 $ 870,656 $ 535,379
Expenses
General Fund $ 3,131,016 $ 3,229,431 $ 3,666,213 $ 3,752,482 $ 4,015,113
Water Fund $ 1,098,752 $ 1,139,803 $ 1,188,927 $ 1,176,416 $ 1,335,662
Sewer Fund $ 1,903,799 $ 1,998,810 $ 1,888,564 $ 1,884,677 $ 2,216,438
Total Expenses $ 6,133,567 $6,638,044 $ 6,743,704 $ 6,813,575 $ 7,567,213
Excess/(Deficit) ($ 1,145,874)
11Debt Service Included in Budgeted Amounts
Staffing History
6 8 8 7 6 5 5 5 5 5 5 5 6 5
4 6 4 5 4 4 4 4 3 2 2 2 2 2
18
20 19 21 22
20 20 17 13 16 16 16
23 25
6
6 7
7 7 6 6
6
6 6 7 7
7 7 6
6 6
6 6
6 6 6
5 4 4 4
4 4 2
2 3 3 2
2 2 2
2 2 2 2
2 2
-
10
20
30
40
50
60
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Admin Planning& Zoning
Police PublicWorks
Sewer Water
12
7
State Aid
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
FY
200
5
FY
200
6
FY
200
7
FY
200
8
FY
200
9
FY
201
0
FY
201
1
FY
201
2
FY
201
3
FY
201
4
FY
201
5
FY
201
6
FY
201
7
MSA County Seat Chancery SALLE/EDIE
13
Realty Transfer Cash Account
14
8
15
Building on Success
• Conservative Revenue Estimates
• Major Project Funding with 100% Principal Forgiveness and 0% Interest Rate– King Street Water Treatment Upgrades
• Secured an additional $500,000 Principal Forgiveness and 0% Interest
• Total Project Funding $3,800,000
• Purchasing Card Rebate– Rebate to Date FY17: $3,725.00 (5% of Purchases)– Rebate Since Inception FY08: $44,577.31
16
Initial FY 2018 Budget
REVENUESGeneral Fund Revenues 3,245,814$ Water Revenues 1,279,025$ Wastewater Revenues 1,896,500$
TOTAL REVENUES 6,421,339$
EXPENDITURESGeneral Fund Expenses 4,015,113$ Water Fund Expenses 1,335,662$ Wastewater Fund Expenses 2,216,438$
TOTAL EXPENDITURES 7,567,213$
PROJECTED SURPLUS/(DEFICIT) (1,145,874)$
9
17
Significant Items• Expense Increase
– Personnel Reclassification• Police Department
– Promotion to Sergeant– Three (3) Employees
– Promotion to Sr. PFC – Three (3) Employees
• Sewer Department– New Position – Maintenance I
• Town Hall– Administrative Assistant– Part Time
» Filling a vacated position
• Public Works– Summer Help – Two (2) Part Time
Significant Items
• Proposed Capital Expenditures• Public Works
– Replace 150 Water Meters – $33,000
• Wastewater– County Seat Pump Station Flow Meter – $125,000
» Required by DNREC
» Final Flow Meter will be Easter Seals (FY 2019)
18
10
Significant Items
• Potential Legislative Impacts– Governor Carney’s Budget
• No proposed reductions to Municipal Street Aid
• No changes to allocation of Realty Transfer Tax
• Subject to review by Joint Finance Committee
– IRSD Funding for Resource Officer
– Sussex County • Revenue Sharing Police Department ($25,000)
19
20
Town Indebtedness
• Total Debt: $10,541,723– Water (24.43%)
• Debt: $2,575,454
• Annual Payment: $422,464 (Principal)
• Water Impact Account Balance: $674,611
• Debt Coverage: 18 months
– Sewer (75.57%)• Debt: $7,966,269
• Annual Payment: $653,396 (Principal)
• Sewer Impact Account Balance: $1,642,263
• Debt Coverage: 2 years 4 months
11
Banking Summary
M & T Bank• Drug Strike Force
• SALLE
• Health Care Plan
• Realty Transfer
• Sewer & Water Impact
• Payroll
• Water & Sewer Depreciation
• Operating Account
WSFS• Police Savings Account
Fulton Bank• Municipal Street Aid
• Police Pension
• Project Escrow Account
• La Red Escrow
• College Park
• Reserve Account
County Bank• Annexation
• Police Grant
• Fund to Combat Violent Crime
• Equitable Sharing
PNC Bank• Interim Financing 21
22
Major Capital Projects• King Street Water Treatment Plant Upgrade
• Town Hall 37 & 39 The Circle
• Continued Street Rehabilitation
• County Seat Pump Station Flow Meter
12
23
Important Points to Remember
• Cash is King– Importance of building and maintaining reserves
– Once borrowed, need to replenish doubles
• Deferral Cost More– Postponement of tax and rate increases generally results in
larger, less palatable increases
– Need for capital improvements is not decreasing
• Financial Issues– Operating Cost increase annually
• Ability to manage to some degree
• Some items outside our control
– Debt Service is concern
24
Other Considerations
Continue:• No Out-of-Town Sewer Service
13
25
Infrastructure Projects…
• Completed:– South Railroad Avenue Wells & Treatment (DWSRF)
• In Process:– King Street Treatment Improvements (DWSRF)
– 37 & 39 The Circle (USDA - CF)
– Burger King Drive Rehabilitation
– Bramhall Street Rehabilitation
• Broadband Initiative
26
Broadband
Broad Valley Micro Fiber Networks
Increase Productivity
Greater Efficiency
Higher Reliability
Improved Security
14
Broadband1st Proposal
• Connect All Town Buildings 37 & 39 The Circle
1 Town Alley
King Street Water Plant
Police Department
• Non Recurring Cost – $45,000
• Monthly Recurring Cost $5,000 ($60,000 yearly)
2nd Proposal• Connect All Town Buildings
37 & 39 The Circle
1 Town Alley
King Street Water Plant
Police Department
• Non Recurring Cost – $30,000
• Monthly Recurring Cost $2,600 ($31,200 yearly)
27
Broadband
3rd Proposal• Connect Only
37 & 39 The Circle
• Non Recurring Cost – $27,500
• Monthly Recurring Cost $895 ($10,740 yearly)
* Will need to discuss WiFi for the Circle
28
15
Addressing the Deficit• Eliminate 2% Spending Cap
– Erodes ability to set aside funds for “Rainy Day”
– Since inception – 1% in 2013
– Utilize Cash Balances
– Maybe a one-time fix
– Difficulty in replacing cash used
– Impact on FY 2019 Budget
• Other Ideas
29
Tax Rate Increase History
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
$‐
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Tax Rate Tax Rate (CPI) CPI
30
16
31
Tax Rate Increase History
• Consider Annual Increase– Avoid Negative Press Impacts
– Minimized Magnitude of increase
• Easier for Residents to Adjust– Smaller increases
• Eliminates “Catch Up” after two to three years of higher costs
32
Next Steps
• Agree on Items to Address the Deficit
• Prepare and Present a Balanced FY 2018 Budget
• Adopt Budget
17
33
Town of Georgetown
Budget Workshop
Thursday, March 23, 2017
‐
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Decem
ber 23, 2016
Decem
ber 30, 2016
January 6, 2017
January 13, 2017
January 20, 2017
January 27, 2017
February 3, 2017
February 10, 2017
February 17, 2017
February 24, 2017
March 3, 2017
March 10, 2017
March 17, 2017
March 24, 2017
March 31, 2017
April 7, 2017
April 14, 2017
April 21, 2017
April 28, 2017
May 5, 2017
May 12, 2017
May 19, 2017
May 26, 2017
June 2, 2017
June 9, 2017
June 16, 2017
June 23, 2017
June 30, 2017
July 7, 2017
July 14, 2017
July 21, 2017
July 28, 2017
August 4, 2017
August 11, 2017
August 18, 2017
August 25, 2017
September 1, 2017
September 8, 2017
September 15, 2017
September 22, 2017
September 29, 2017
October 6, 2017
October 13, 2017
October 20, 2017
October 27, 2017
November 3, 2017
November 10, 2017
November 17, 2017
November 24, 2017
Decem
ber 1, 2017
Decem
ber 8, 2017
Decem
ber 15, 2017
Decem
ber 22, 2017
Decem
ber 29, 2017
Depth(in feet)
WWTF Lagoon Depths
Large Lagoon Small Lagoon
State of DelawareBUDGET RESET: GOVERNOR CARNEY’S
BUDGET PROPOSAL FOR FISCAL YEAR 2018March 23, 2017
$385.6 Million Budget Gapfor FY 2018
2
Expected Revenue:
$3,906,100,000
Expected Expenses:
$4,291,727,700
Budget Shortfall:
$385,627,700+ =
March DEFAC
Available Revenue for
FY 2018 Appropriation
FY 2017 Level of
Appropriations plus
Cost Drivers
Governor Carney’s Key Financial Principles
3
Making Delaware more competitive, while promoting economic growth.
Using a balanced approach that cuts spending and raises revenue through shared sacrifice.
Building a long-term, sustainable financial plan.
Containing costs through continuous improvement, while investing in key public services.
School Enrollment Growth Driving Increased Demand
4
*Enrollment numbers exclude DAFB. *From school year 15/16 – 16/17, Special Education Enrollment grew by 8%.
Employee Counts Rising in our Public Schoolsas Enrollment Grows
*Non-Cabinet Agencies Except School Districts went from 3,710 to 3,853. 5
14,103
16,877
13,338
19,422
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
Cabinet Agencies except School Districts School Districts
3/1/2009
2/1/2017
Medicaid Enrollment Growing as Health Costs Rise
6
*Fiscal Year 2017 represents estimated Monthly Average of those eligible for Medicaid.
Imbalanced Revenue Portfolio
2.9%
-2.7%
0.7%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Annual General Fund Revenue Growth FY2017-FY2018
PIT/Franchise All Other Total
PIT & Franchise,
62.9%
All Other Revenue,
37.1%
General Fund Revenue Portfolio Mix FY2018
7
Highlights of Governor Carney’s Financial Plan
8
Limits Operating Budget Growth to 0.29% at $4.1B.
Balanced long-term budget solution through shared sacrifice.
Rebalances revenue portfolio to align with economic growth.
Addresses core government service demands, while containing long-term costs.
Studies cost savings and efficiencies through Government Efficiency and Accountability Review Board (GEAR).
Sets aside $40.7M for Grants-In-Aid.
Governor Carney’s Plan Requires
S H A R E D S A C R I F I C E
9
Governor Carney’s Fiscal Year 2018 proposal includes immediate
action to reduce the cost of state government operations:
• Making Government More Efficient.– 4.5% total reduction to state agency discretionary funds.
– $6.5 million: Adjust cost share in employee health plans.
– $5.0 million: Eliminate 200 vacant positions.
– $3.5 million: Eliminate double state share.
– Ongoing commitment to study efficiencies and improvements in state government through the Government Efficiency and Accountability Review Board (GEAR) – created by Executive
Order #4.
Governor Carney’s Plan Requires
S H A R E D S A C R I F I C E
10
• Immediate Budget Reductions in the Fiscal Year 2018 Plan Include:
− $25.0 million for Open Space, Farmland and the Energy Efficiency Fund until resources are available.
− $5.0 million to reduce the Senior Property Tax Credit by $100.
− $3.3 million in higher education reductions.
− $2.6 million to reduce Medicaid dental reimbursements by 14%.
− $1.2 million in reductions for fleet services and energy expenditures.
− $594,300 for a reduction to pass-through programs.
− $460,800 to reduce funding for Delaware Art, and Library Standards.
− $125,000 to close the Polly Drummond Hill Yard Waste site.
− $171,000 to eliminate the Board of Parole.
Key Investments: Public Education
11
• Preserving Core Investments in Education– $25.1 million for new teachers in Delaware classrooms.
– $4.7 million to maintain investments in Early Childhood Education.
– $1.0 million for Opportunity Grants for schools serving disadvantaged students.
• Proposed Reductions– $22.0 million reduction to Educational Sustainment Fund; Delaware
school districts would receive flexibility to raise the match tax without referendum to cover reductions to the Sustainment Fund.
– $15.0 million reduction to school district & charter school operations.
Key Investments
12
• Promoting a Healthy Delaware– $11.8 million to fully fund Medicaid for low-income Delawareans, Delawareans
with disabilities, and Delaware seniors for long-term care.
– $1.0 million to add funding for substance abuse treatment services.
• Access to Quality Housing– $4.0 million to maintain funding for affordable housing through the Housing
Development Fund.
– $3.0 million for the State Rental Assistance Program, which targets assistance for specific groups with a high need, such as Delawareans with disabilities, those aging out of foster care, and homeless veterans.
• Addressing security in Delaware’s prisons– $4.5 million to increase hazardous duty pay for Delaware correctional officers.
– $2.3 million for 75 new correctional officers at James T. Vaughn Correctional Center and Baylor Women’s Correctional Institution.
– $1.3 million for new equipment and training for correctional officers.
Rebalancing Delaware’s Revenue Portfolio
• Revenue proposal draws upon recommendations of the bipartisan “DEFAC Advisory Council on Revenues.”
• Structural reform will:– Make Delaware’s revenue portfolio more responsive to
economic measures of demand for services.
– Reduce revenue volatility while maintaining Delaware’s
competitiveness with surrounding states.
• Balanced approach would equitably distribute costs.
13
Funding Core Services – Revenue Plan
14
Taxes & Fees Description FY 2018
Corporate FranchiseCreate a two-tier maximum tax and true up other rates to reflect inflation.
116.1$
Personal IncomeMajor tax reform to simplify the tax structure and define taxable income more equitably.
64.6$
196.7$
192.8$
Total: Governor's Recommended Revenue Changes Total: Governor's Recommended Revenue Changes @ 98%
Cigarette and Other Tobacco Products
(OTP)
Increase per pack and OTP rates. Treat e-cigarettes and moist snuff as OTP.
16.0$
Personal Income Tax – The Proposal
• DEFAC Advisory Council:– Eliminate itemized deductions.
– Sync age-based tax preferences at 65, but on a rolling basis.
• Our Proposal:– Effective January 1, 2018: eliminate itemized deductions in
Delaware and increase the standard deduction more than 50%.
– Increase each tax bracket by 0.2 to 0.4 percentage points, with top rate rising to 6.8 percent.
– Increase the eligibility age for additional personal credits and retirement income exclusions from 60 to 65 in 1-year increments.
15
Corporate Franchise Tax – The Proposal
• DEFAC Advisory Council:– Continued periodic adjustments when appropriate.
– Focus on entities deriving greatest value from incorporation here.
• Our Proposal:– Effective January 1, 2017: create a second tier maximum tax
at $250,000 for public companies with greater than $750M in revenue or assets and no less than $250M in revenue or assets.
– Increase the first tier maximum tax from $180,000 to $200,000 to reflect inflation since the last increase in 2009.
– Make inflationary adjustments to miscellaneous filing fees.
16
Tobacco Taxes – The Proposal
• Our Proposal:– Effective August 1, 2017: increase the tax on cigarettes from
$1.60/pack to $2.60/pack.
– Treat moist snuff and e-cigarettes as Other Tobacco Products (OTP).
– Increase the tax on OTP from 15% of wholesale value to 30%.
• The proposal will:– Reduce long-term healthcare costs by increasing a key
disincentive to smoking.
– Maintain a measure of regional tax parity on cigarettes.
– Tax all mediums of tobacco and like products equally.
17
Governor Carney’s Plan: A Balanced Solution
18
• General Fund Operating Budget - $4,096.1 million
0.29% overall growth from FY 2017.
Plan maintains investments in key areas such as public education, health, and safety.
Reduces discretionary funding through shared sacrifice, controls cost growth.
• Grants-In-Aid - $40.7 million
- End of Presentation -
19
