Delaware Delaware Government New Castle County

NCCo Budget Fails to Find Enough Votes for Fiscal Responsbility

On Tuesday, the NCCo Council voted down the budget presented by the NCCo Executive, Matt Meyer.  The fundamental issue is whether the County lives with the revenues it takes in or if it continues to approve deficit-based budgets that need to be covered by tapping into County reserves.  A 15% increase sounds like a lot, except that County taxes are pretty low in the first place.  And what does it take to get to some fiscal responsibility?

This is County Executive Matt Meyer’s Statement after the vote:

For five years, county government has spent more money than it has taken in as revenue. As a result, we are running out of money to fund government services. Last night, County Council rejected a plan to fully fund police, paramedics, libraries and parks that would cost about an extra dollar a week. County Council rejected a plan to fix the irresponsible decisions of the past administration and put our great county back on solid footing. In 20 town halls, I listened to the residents of this county. They overwhelmingly supported the responsible budget rejected by Council last night. The results of last night might be severe as we now must consider cuts to critical services. As we move forward, I will continue to listen to you. I will continue to fight for you. New Castle County Government #netde

If you are a County Executive who is following a Gordon Administration, you are always going to face a great many headwinds financially.  He spends money to buy friends and found that the County Reserves was made for exactly that.  And who knows how a library on Rt 9 (which is gorgeous) started out as a $21M project and ended at $30M.  That’s alot of cost growth and likely indicative of other projects run during this time.  Many of the NCCo Councilmembers who voted against this budget were party to the irresponsibility of Gordon budgets and should be reminded that sooner or later a Piper shows up to be paid.  Living within your means is exactly the point, and avoiding that because you do not want to vote for a tax increase means you are not doing your job.  Using reserve funds to cover deficit spending isn’t the smartest thing to do.  A thing you can see in hindsight, but we expect our legislators to do the hard work of difficult choices.  This Council’s problem is that they could manage to ask for better fiscal responsibility over the past 5 years and now that they are looking it in the face, they are scared of it.

16 comments on “NCCo Budget Fails to Find Enough Votes for Fiscal Responsbility

  1. I don’t think Meyer should be absolved of his incompetent political handling of this. You don’t go for a double-digit-percentage increase in an election year. Meyer doesn’t face the voters this November, but half of council does. You also don’t go into a vote expecting to win and lose 10-3.

    There’s a lot of dead wood on this council, most of it put there by Gordon.

    • cassandram

      The election year is when the reserves are getting dangerously low. At this rate, the County won’t even be able to fix its issue because some of them are up for re-election AND all of them are complicit in draining those resources.

      No doubt Meyer needs to count votes , but the budget numbers are the budget numbers. There’s two ways to fix it.

  2. HyperbolicDem

    The issue with this is that his 15% increase was an arbitrary number. Several council members knew this and he proved it by throwing a 12.5% plan in at the last minute when he said that he could not get any less than 15%. On top of it all is that he never spoke with council members to get their perspectives to the point of ignoring his biggest allies. What he and his staff fail to understand is that they are not the center of the political universe and do not have the experience and knowledge to do a runaround of council. Just because one person disagrees with you on a policy does not mean you stop communicating with them on all policies.

    His lack of desire to employ anyone with institutional knowledge, inability to have an effective policy plan, and constant chasing of a good sound byte have rendered him ineffectual. His CFO and CAO are state castaways that were not only pushed out, but left a trail of legal issues behind. They have begun to do the same at the county level, only without any experience in this type of governing to speak of. Giving these two free reign and ignoring the input of your department heads who have working knowledge of what is need to provide service (because that is all county government does) is a recipe for a one termer. He needs to stop with the over the top press releases and the media first policy and get to the nuts and bolts of governing.

    A county executive is a manager, not a politician. We haven’t had too many of those and that is the problem. If he keeps playing politician instead BEING a manager, he will fail miserably, just like Gordon, just less criminal and not as creepy. Also, if he doesn’t get it together, suck up his ego and start really talking to council, he opens the door for Gordon, or one of his criminal surrogates to step in next time around. We can’t do that a third time.

    • cassandram

      You are going to have to prove that the 15% was arbitrary. If he was looking to not dip into reserves AND not have to go back to the well in a few more years, this is entirely possible. Considering a 12.5% increase is an indicator of a little breathing room — not necessarily that it was arbitrary. He should be talking to Council. And Council should be talking to him. The increase did not get rolled out just last night. The strategy to not rely on reserves (that are running out) did not get rolled out just last night. One thing Council has an obligation to do is to say what they can’t live with and say what they can sell as reduced services.

      • HyperbolicDem

        Sorry, I was away, so I didn’t check back in. There is $75 million in the reserves. Approximately $23 million of that is in the tax stabilization account. One of the purposes of this account is to augment an increase, or to allow for a slow phase in of an increase without losing services. Council did give their feedback to the Executive, however it was not accepted. It is not coincidence that he did not get the vote of his biggest supporters and allies on council, Kilpatrick and Diller. His—and his administration for that matter—communications skills aren’t lacking, they do not exist. Everything is done via press release or big reveal at the last minute. That is why the quick 12.5% amendment went over like a lead balloon. Council members who had been negotiating in good faith were offended. It was an out of the blue and arbitrary number when he said he couldn’t go any lower. The reserves are there for this purpose, but also need to be used or the state will decide that the county has far too much in “savings” and should either give back to the state, or take on more services. The county has not been able to fully staff its own departments in years, much less take on more.

        Furthermore, there is not need for reduction of services with the amount in the reserves. The big issue is that lack of employees. Hiring has been frozen to “analyze efficiencies.” I am not sure how you can analyze efficiencies in a system that isn’t fully staffed and functional. Gordon couldn’t get away with the money laundering he did the first time, so instead he used attrition to create a the perception of fiscal stability. What Meyer walked into was not a financial mess, it was an operation disaster.

        For all Meyer’s finger pointing an rhetorical dramatics, he fundamentally screwed up by trying to be a show off and force a group of people with far more experience and understanding of the county’s finances to bend to his political will. It was misguided and uninformed. Maybe now he will listen to not only council, but his own employees. Not everything needs to be a press opportunity. Sometimes you just need to manage.

        • cassandram

          So you are telling me that the County is underfunded, even with dipping into the reserves to deal with this year’s budget. So let’s say you dip into the reserves for this year’s budget. And dip into it more to hire more people. How long do those reserves last without additional revenue?

          • HyperbolicDem

            No, what I’m saying is that the reserves are there for a bridge to allow for a step increase so that the county does not have to go through what it did after the first Gordon admin and raise taxes nearly 30% at a time. It allows a phase in. Financially, the county should not be running a savings account. The rainy day fund is for catastrophe. All income should go to operations. It’s good to have some buffer, but ideally what goes in should come out as benefit to the taxpayer. This idea that you “run government like a business” is a catch phrase. It is far from that. Responsible governing does not mean hoarding money and cutting service. Service is all that local government provides.

            Well, that and crazy power grabbing wannabes that provide for entertaining meetings. Otherwise, there really should be no surplus, Just increased service and benefits.

            • cassandram

              I haven’t suggested that anyone run the government like a business. But I am not buying that this group of council people would vote for enough *stepped* tax increases to avoid not completely depleting the reserve fund in time.The clock is still ticking, the question is when you pay the piper. You argue that Meyer should be hiring people and he probably doesn’t want to be seen as profligate (with likely little defense from Council) by using the reserves to expand the payroll. But he submits a budget that is balanced the right way and everyone is pissed off that he isn’t using the reserves. Those reserves are there for specific hedges against economic turbulence, unforseen state or Federal mandates — it is not meant to be a hedge for politicians who can’t vote to make a budget balance appropriately.

              • HyperbolicDem

                Council has been leery to to use the reserves in the past. They are far from depleted and part of their purpose is to also ease in tax increases. Council already voted in the sewer increase. Also, hiring would not expand payroll as all the vacant positions are funded, and have been for the past five years. The budgeted money is just sitting there. He didn’t eliminate positions, therefore the money is useless for any other use because they are tied to those budget lines. In other words, the money is being wasted and services are suffering. Instead of filling these positions, he county uses contractors to do things like park maintenance, property abatement, tree cutting, etc. The rates are much higher than if it was done in house.

                The budget has always been balanced. The vast majority of this council voted for the nearly 30% increases under Coons. The reserves are the first thing to receive revenue in order to get them back up to par. The issue isn’t increasing revenue, that is a known necessity. It is how it is to be done and if the Executive understands what is needed. That is obviously not the case for the for the latter as the CFO has resigned. There are factors in this budget that do not match up with realities. Calling for a full 15% increase without know how much the lodging tax will bring in, as well as the change in the first time home-buyer credit, plus still calling for 5% cuts in labor from each department does not comport with forecasts. Phasing in an increase over two years allows them to see what will be brought in by the new revenue generators, as well as the RTT—which is looking to be large due to a very up market—and either adjust down, or up the next step.

  3. Oreo Watcher

    Agree with you regarding his management style and tact with surrounding himself with the wrong people, especially people like Marcus Henry, Brian Boyle etc… I also think certain folks on council could have done a better job i.e. Cartier quoted as saying “his constituents can afford the increase”. Is that right? Nice of him to speak for his entire community and knowing everyone’s individual financial situation. Those are the kind of tone-deaf talking points that get people elected out of office. The whole proposal was botched from the start and as a result DOA.

  4. There was an audit done in July 2017, on the collection process in NCC. And the County Executive is putting some of the financial responsibilities on the backs of the schools, which makes no sense at all!

    Some of the findings: Collections computer system is not a true collections system and requires
    too much manual intervention.

    Presently the County does not follow collections best practices that are successfully used by outside collection agencies and other local governments in our area.

    You could read the rest………

    https://www.nccde.org/DocumentCenter/View/20464/Collection-of-Delinquent-Property-Taxes-and-Sewer-Service-Fees-73117-PDF

    Have these recommendations been implemented?

    • If you had read the report, you would learn that the county collected $111 million and change in county taxes, and that represented 98.9% of all money due. If you work the math, that mean about $1.2 million went uncollected. The report also notes that nearly all of those overdue accounts owe less than $3,000, meaning that a lot of those in arrears are just regular folks who probably don’t have the money. Is your solution to seize their property and throw them into the welfare system? Because that will cost you more in the long run.

      The amount you’re obsessed with amounts to a rounding error in the budget. Even if they collected every penny, it wouldn’t change the need for a tax increase in the slightest.

      • HyperbolicDem

        Also, of those remaining, many are abandoned, foreclose, or bank owned properties. Many of the “zombie houses” left over from the bubble burst are the main culprits. The last thing you want is for it to be easy for the county to seize assets. You are also correct in that it will cost more in the long run to seize the properties because until they go to sale they need to be maintained. The last thing we want as taxpayers is to be paying government contract rates to cut lawns and fix gutters on private properties that the government now owns.

      • You missed the point, Al. Again, out for lunch or dinner. How were those pork chops? The report was more on; procedural operations, that are not be followed and antiquated systems. Now use the other “half track” of your mind. Or tell us about the pork chops!

        • The subject of the thread is the county tax increase. You have not addressed it, instead directing attention to an inside-baseball report about an amount of money that — you apparently missed MY point — is insignificant in this context.

          Fuckstick.

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