Fiscal Year 2019 Operating Budget Summary

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1 Fiscal Year 2019 Operating Budget Summary Comparative Summary of Sources and Uses of Funds Funding Summaries Program Summaries Reader is provided additional data for the current budget year and the prior two fiscal years in the BUDGETARY PROFILES tab.

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3 New Castle County Comparative Summary of Sources and Uses of Funds FY2018/FY2019 Approved Budgets FY2018 Approved Budget FY2019 Approved Budget FY2019 Over (Under) FY2018 Percent Change SOURCES: Real Estate Taxes $ 114,502,000 $ 123,627,000 $ 9,125, % Realty Transfer Tax 28,350,000 32,400,000 4,050, % Hotel Tax 3,000,000 3,000, % Sewer Charges & Fees 72,210,859 78,360,573 6,149, % Use of Money and Property 12,834,240 11,738,079 (1,096,161) 8.50% Service Charges and Fees 23,830,643 23,839,370 8, % Licenses and Permits 6,757,952 6,737,952 (20,000) 0.30% Intergovernmental Revenues 7,114,423 7,182,288 67, % Special Assessments 10,094,080 10,192,462 98, % Uses of Available Cash Balances 16,452,045 4,230,332 (12,221,713) 74.30% Subtotal $ 292,146,242 $ 301,308,056 $ 9,161, % Interfund Capital Transfer (7,386,830) (7,964,015) (577,185) 7.80% Appropriated Sources of Funds $ 284,759,412 $ 293,344,041 $ 8,584, % USES: Salaries and Wages $ 111,282,004 $ 113,146,018 $ 1,864, % Employee Benefits 61,736,937 65,627,097 3,890, % Training and Civic 661, ,576 (31,799) 4.80% Communication and Utilities 29,931,788 30,076, , % Materials and Supplies 7,214,444 7,356, , % Contractual Services 18,580,474 18,439,571 (140,903) 0.80% Intergovernmental Service Charges 20,018,170 15,102,002 (4,916,168) 24.60% Equipment 1,343,672 1,447, , % Grants and Fixed Charges 15,692,486 15,493,544 (198,942) 1.30% Debt Service 42,913,928 43,904, , % Land and Structures 20,000 20, % Contingencies 1,381,000 1,381, % Intragovernmental Service Credits (26,016,866) (20,561,452) 5,455, % Appropriated Uses of Funds $ 284,759,412 $ 292,062,628 $ 7,303, % Operating Budget Summary 71

4 How Are Costs and Revenues Estimated? In order to achieve the most accurate and reasonable projections for anticipated revenues and costs, revenue and expense categories are analyzed using the most appropriate methodology for each category. Forecasters consider all applicable limitations and requirements in projecting each individual revenue and expense source. One or more of the following factors may play an important role in the development of revenue and expenditure forecasts. Legal or Mandated Requirements Some revenue and expense categories are defined by specific legal requirements or restrictions. For example, the State imposes a limit on the transfer tax charged by the County on real estate transactions of 1.5%; debt service payments are based on agreed upon periodic repayment schedules; salaries and wages are based on negotiated union contracts for most employees, and County Council reviews the recommended budget. Department Staff Estimates Each year the Administration and department management meet to identify future staffing needs, large capital projects or equipment costs, and new one-time or ongoing programs that they think will affect the operating or capital budget over the next five years. The experience and expertise of department managers is also crucial for accurately projecting expected revenues from sources such as permits and fees. Related Formulas Specific County revenues and expenses are directly affected by demographic and economic factors such as population trends and inflation rates. For example, population growth is almost always accompanied by an increase in real estate tax revenue. However, demand for services and additional infrastructure improvements (i.e., expenses) will also rise. Balanced Budget Requirement State and County law and County financial policies require that each annual County budget be a balanced budget. This means that County expenditures cannot exceed its revenues. New Castle County Financial Advisory Council (NCCFAC) NCCFAC meets regularly during the fiscal year to review County revenue and expenditure projections. NCCFAC also approves the revenue projections for the forthcoming fiscal year prior to the final approval of the budget by County Council. 72 Operating Budget Summary

5 Major Revenue Sources Property Taxes Fiscal Year 2019 Revenue Assumptions Property taxes were estimated based on the net assessed value of $19,055,907,221 as of March 15, 2018, at cents per $100 of assessed value and a 99% collection rate. The resulting estimated property tax revenue for Fiscal Year 2019 is $123,627,000. The average and median residential bills are based on a tax rate of cents per $100 of assessed value. The tax rate increased by a net 7.5% from last year. The average unincorporated residential bill will be $567 annually. The median residential bill is $490. Realty Transfer Tax The realty transfer tax rate for Fiscal Year 2019 is 1.5% of the selling price of real estate sold. Taxes reflected in the budget are based on transactions in the unincorporated areas of the County. Revenue estimates for Fiscal Year 2019 are based on 95% of the total realty transfer tax estimated to be received in Fiscal Year Service Fees Service fees were estimated based on recent historical information and reflect the current level of real estate transfer activity. Many of the service fees are market sensitive to real estate transactions. Revenues from 911 land line fees are capped at the amount received when the State took over collections. Licenses and Permits Licenses and permits were estimated based on recent activity, current revenues and projected Land Use fee increases. The estimate reflects the continuation of the current trend in the construction market. Interest and Rents Interest income was estimated using cash flow projections and current interest rates in Fiscal Year 2018 which are expected to remain essentially unchanged in Fiscal Year Rent received from the City of Wilmington at the City/County Building is reimbursed at 70% of operating costs of the facility. Intergovernmental Revenues The State reimbursement for Emergency Medical Services was changed as of July 1, 2018 by State legislation to 30% of the Fiscal Year 2019 paramedic budget. The County revenue estimate was based on a 30% reimbursement. Sewer Fees Sewer Fees were based on the Fiscal Year 2018 residential billings (based on water usage) and commercial and industrial activity and a 96% fee collection rate. The average residential sewer bill will be $299. Operating Budget Summary 73

6 Funding Summaries 74 Operating Budget Summary

7 Funding Summaries The County has various revenue sources, each representing a different percentage of total revenues as depicted in the above chart. The total anticipated resources for Fiscal Year 2019 will be $293,344,041 including available cash balances of $217,423, Realty Transfer Tax- Debt Service of $6,350,000 and Capital Recovery Fees-Debt Service of $4,012,909. The County s major revenues are derived from real estate taxes and sewer charges and fees. In addition, $7,964,,015 is allocated to fund equipmentt purchases in the Capital Budget. The following pages describe each major revenue source,, the dollar increase and/ /or decrease from the Fiscal Year 2018 budget, and the basis for the increase and/orr decrease. Operating Budget Summary 75

8 Real Estate Taxes Fund: General Real Estate Taxes from the initial annual levy and quarterly additions are estimated to yield a total of $121,700,000 which is $8,750,000 more than the 2018 budget. Total revenues from taxes, including delinquencies, are estimated to be $123,627,000 which is $9,125,000 more than the 2018 budget. Real Estate Taxes provide the single largest source of funds (59.6%) to the General Fund. FY2017 FY2018* FY2019 Category Actual Estimate Approved Initial Annual Levy/Additions $111,685,357 $112,545,740 $121,700,000 Prior Year/Penalties 1,627, ,337 1,927,000 Total $113,313,188 $112,933,077 $123,627,000 *Prior Year/Penalties is significantly lower in FY2018 due to Prior Year credits for Boxwood Road Plant and Verizon.. $120.0 $100.0 $80.0 $140.0 $120.0 $100.0 $80.0 $60.0 $83.8 $84.6 New Castle County Real Estate Tax Yield Current Year Only Fiscal Years New Castle County Real Estate Tax Yield $109.4 $110.4 $111.7 $112.5 $121.7 $106.0 $106.0 $106.5 $107.3 $108.3 $109.2 $60.0 $40.0 $20.0 $40.0 $0.0 FY2015 FY2016 FY2017 FY2018 Estimate FY2019 Approved Taxable $20.0 real property assessed values (net of exemptions) is $19.1 billion for the initial tax levy. Net quarterly additions are projected to add $600,000 in revenue to the tax rolls. 76 $ Est 2015 Operating Budget Summary Budget

9 Real Estate Taxes (Continued) Fund: General All senior homeowners in New Castle County who applied and qualified for an exemption prior to July 1, 2008 receive an exemption of $50,000. This exemption is subtracted from their property s assessed value when calculating a qualified senior s tax bill and calculating the cap on their annual sewer fees. In October 2007, County Council passed Ordinance , which amended the assessment exemption that is granted to senior homeowners who apply on or after July 1, 2008, by decreasing the amount of the assessment exemption from $50,000 to $32,000. In addition, this ordinance added that homeowners must have previously been a resident of the State of Delaware for four years and the assessed value of the property cannot exceed $125,000 in order to qualify for the exemption. Social Security benefits and Railroad Retirement Tier I are not included in the calculation of the income requirements. $20.0 $18.0 $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 New Castle County Assessed Value of Taxable Property Fiscal Years % 1.10% 1.18% 1.03% 0.45% $18.4 $18.6 $18.8 $19.0 $ % 80% 60% 40% $4.0 $2.0 20% $0.0 FY2015 FY2016 FY2017 FY2018 FY2019 0% Assessed real property values partially or totally exempt from the Real Estate Tax total $5.1 billion or 21.2% of the gross $24.2 billion property assessments. The largest component of exempt property is the general exemptions category which is $4.2 billion, or 83% of total exemptions granted of assessed property. Components of Taxable Property Residential 64.4% Commercial/ Industrial 26.4% Others (Includes apartments, farms, utilities) 9.2% Operating Budget Summary 77

10 New Castle County Taxable Assessment Growth FY2019 vs. FY2018 FY2019 FY2018 % Growth Unincorporated $14,611,436,312 $14,691,906, % Arden 16,268,250 16,068, % Ardencroft 7,278,200 7,309, % Ardentown 10,561,100 10,468, % Bellefonte 29,203,600 29,437, % Delaware City 51,176,950 49,145, % Elsmere 112,326, ,998, % Middletown 705,074, ,298, % New Castle 254,439, ,128, % Newark 857,483, ,369, % Newport 54,851,086 55,029, % Odessa 11,581,600 11,702, % Townsend 67,164,900 70,853, % Wilmington 2,181,969,905 2,165,191, % Total $18,970,815,386 $19,055,907, % 78 Operating Budget Summary

11 Realty Transfer Tax Fund: General Pursuant to 67 Del. Laws c. 415, New Castle County Government was granted the power and authority to impose and collect a tax upon the transfer of real property situated within the unincorporated areas of the County. This authority was limited to one percent and exempts first-time home buyers (in addition to other State exemptions). The County enacted the one percent transfer tax by adopting Ordinance effective April 10, In June 1998, the State transferred to the County a portion of the State s realty transfer tax (one-half percent) for a total County transfer tax of one and one-half percent. The County enacted enabling legislation in July In May 2018, the County enacted Ordinance capping the amount of transfer tax that can be used for budget estimates at 95% of the amount certified by the County Executive for the fiscal year. Any excess over the 95% must be used as specified in the legislation. In Fiscal Year 2019, the Realty Transfer Tax is budgeted at $32,400,000 (95% of estimate). The chart below shows transfer tax activity for Fiscal Years Millions $40.0 New Castle County Realty Transfer Tax Revenues Fiscal Years $35.0 $36.9 $30.0 $25.0 $20.0 $25.8 $29.0 $32.7 $32.4 $15.0 $10.0 $5.0 $0.0 FY2015 FY2016 FY2017 FY2018 Estimate *Budget based on 95% of Realty Transfer Tax estimate of $34.0 million. FY2019 Approved* Operating Budget Summary 79

12 Sewer Charges and Fees Fund: Sewer The Sewer Fund is an Enterprise Fund which self-supports wastewater and environmental services within New Castle County. Sewer Service Charges, both current and delinquent ($68,250,000), Other Service Fees ($10,110,573) and Interest Earnings ($1,200,000) are projected to yield $79,560,573. In addition, $4,012,909 will be available from Capital Recovery Fees - Debt Service. FY2017 FY2018 FY2019 Category Actual Estimate Approved Sewer Service Current $57,838,916 $58,678,745 $64,750,000 Sewer Service Delinquent 3,159,650 4,484,877 3,500,000 Interest Earnings 691,063 1,668,862 1,200,000 Other Service Charges 4,136,568 4,485,770 3,610,573 Available Cash Balance 2,108,647 3,000,000 0 Capital Recovery Fees - Debt Service 0 3,823,934 4,012,909 Total $75,046,056 $82,066,668 $83,573,482 The typical residential customer will be billed a composite flow rate of $ per 1,000 gallons (average 48,081 gallons) which is estimated to be $299 or 82 cents per day. The sewer rate is 12% higher than last year. $300 $290 New Castle County Average Residential Sewer Bill Fiscal Years $299 $280 $270 $279 $276 $276 $260 $267 $250 $240 $230 $220 $210 $200 FY2015 FY2016 FY2017 FY2018 Estimate FY2019 Approved 80 Operating Budget Summary

13 Sewer Charges and Fees (Continued) Fund: Sewer The amount estimated to be received from the Fiscal Year 2019 sewer billing from all users is $64,750,000. In addition, delinquent collections are anticipated to total $3,500,000. The display below shows a comparison of the number of accounts by type and the billing estimated for Fiscal Year Gross Billing Estimate Fiscal Year 2019 # of Accounts Gross Billing Residential 120,457 $31,319,199 Industrial 22 10,364,519 Commercial 3,666 12,511,129 Apartments 228 7,978,943 Contract 5 5,292,603 Gross Billing 124,378 $67,466,393 Allow for Delinquent ($2,716,393) Net Billing $64,750,000 Residential Customer Average Bill $299 Where the Money is Spent Stormwater/Drainage $26 Treatment & Lab $80 Operations & Maintenance $97 General & Administrative $14 Debt Service $82 Operating Budget Summary 81

14 Use of Money and Property Fund: General Use of Money and Property revenues ($7,078,385) are primarily from interest earnings and Realty Transfer Tax - Debt Service. FY2017 FY2018 FY2019 Category Actual Estimate Approved Interest Earnings $2,555,508 $2,800,530 $2,800,530 Impact Fees 463, , ,000 Realty Transfer Tax - Debt Service 4,286,774 7,000,000 2,890,306 City of Wilmington C/C Bldg. 546, , ,680 Rentals/Sale of Assets 532, , ,869 Total $8,384,446 $11,334,240 $7,078,385 New Castle County General Fund - Interest Earnings Fiscal Years $3.5 $3.0 $2.5 $3.0 $2.8 $2.6 $2.8 $2.8 $2.0 $1.5 $1.0 $0.5 $0.0 FY2015 FY2016 FY2017 FY2018 Estimate FY2019 Approved 82 Operating Budget Summary

15 Service Charges and Fees Fund: General Service Charges and Fees revenue is projected at $23,830,643. FY2017 FY2018 FY2019 Category Actual Estimate Approved Sheriff $5,894,786 $6,053,668 $5,084,343 Deeds 7,790,960 7,326,927 7,060,000 Wills 3,862,075 4,089,355 3,385,600 Recreation 1,112,485 1,144,989 1,308,862 Public Safety (911 Fees, Traffic Fines, 1,962,205 1,982,998 2,035,605 Emergency Communication) Zoning Fees 1,420,646 1,708,500 1,454,330 Miscellaneous* 3,335,346 3,944,019 3,510,630 Total $25,378,503 $26,250,456 $23,839,370 *Includes library fines, property maintenance, and insurance recoveries. Millions New Castle County Service Charges and Fees Fiscal Years $27.0 $26.0 $26.3 $25.0 $25.4 $24.0 $23.0 $23.8 $22.0 $21.0 $21.9 $22.6 $20.0 $19.0 $18.0 FY2015 FY2016 FY2017 FY2018 Estimate FY2019 Approved Operating Budget Summary 83

16 Licenses and Permits Fund: General Licenses and Permits revenues are estimated to yield $6,737,952. FY2017 FY2018 FY2019 Category Actual Estimate Approved Building Permits $4,430,803 $4,481,700 $3,766,919 Contractor/Business Licenses 1,079,694 1,145,750 1,155,000 Other Permits & Licenses 1,912,035 1,965,145 1,816,033 Total $7,422,532 $7,592,595 $6,737,952 The display below shows a comparison of various building permits activity for the past two calendar years. CY2016 CY2017 Type of Permit #Permits Issued #Permits Issued Residential 961 1,145 Alterations/Additions 2,097 2,304 Commercial/Industrial Millions $5.0 Revenues from Building Permits Fiscal Years $4.5 $4.0 $4.4 $4.5 $3.5 $3.6 $3.5 $3.8 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 FY2015 FY2016 FY2017 FY2018 Estimate FY2019 Approved 84 Operating Budget Summary

17 Intergovernmental Revenue Fund: General Intergovernmental Revenue ($7,182,288) is primarily from the State of Delaware for reimbursement of the County s paramedic program ($5,816,676). The numbers below do not include the State contribution to Police Pension that is received during the year and appropriated in June. FY2017 FY2018 FY2019 Category Actual Estimate Approved Paramedic Reimbursement $4,066,465 $5,792,493 $5,816,676 Realty Transfer Tax Fee 516, , ,000 Chancery Reimbursement 269, , ,512 Department of Justice 966, , ,915 Indirect Cost Plan 89,457 88,000 90,000 Other Reimbursement 249, , ,185 Total $6,158,533 $7,731,938 $7,182,288 Special Assessments Fund: Light Tax Special Assessments revenues for the Light Fund consist of $6,533,650 in tax revenue and $109,889 in use of available resources. Monthly billings are received from Delmarva Power for electric. These assessments are for street lighting installation and operation in new and existing communities. Approximately 60% of all unincorporated improved parcels benefit from street lighting. The following are the Street Light Tax rates for Fiscal Year 2019: Tax Rate in Cents Per $100 of Assessed Valuation Wood Incandescent Wood Mercury Metal Mercury Ornamental Mercury Turn of Century Limited Installation Operating Budget Summary 85

18 Special Assessments Fund: Crossing Guard Special Assessments revenues for the Crossing Guard Fund consist of $3,658,812 in tax revenues and $107,534 in use of available cash balances. A separate rate is established each year through County ordinance for five school districts (Brandywine, Red Clay, Christina, Colonial, and Appoquinimink) to support school crossing guard services. The following are the school crossing guard tax rates for each school district for Fiscal Year 2019: Tax Rate in Cents Per $100 of Assessed Valuation Brandywine Red Clay Christina Colonial Appoquinimink Use of Available Cash Balances The use of available cash balances for Fiscal Year 2019 are as follows: Light Fund $109,889 Crossing Guards 107,534 TOTAL $217,423 Reserves Fund: General and Sewer The following legislated reserves are enacted by County Council as of April 30, 2018: Tax Stabilization Reserve Account (Ord ) $20,071,467 Sewer Rate Stabilization Reserve Account (Ord ) 9,149,254 General Fund Budget Reserve Account (Rainy Day Fund, Ord ) 37,057,852 Sewer Fund Budget Reserve Account (Rainy Day Fund, Ord ) 14,666,959 TOTAL $80,945, Operating Budget Summary

19 Estimated Grants for FY2019 Fund: Grants In addition to the General and Special Operating funds, New Castle County anticipates the following grants for Fiscal Year Community Services Section 8 Housing Choice Vouchers $17,061,000 Community Development Block Grant 1,992,000 State Aid - Libraries 1,762,000 Home Program 800,000 Youth Employment Program 142,000 State Aid - Senior Centers 205,000 Emergency Solutions Grant 185,000 Total Community Services $22,147,000 Land Use Historic Preservation $13,000 Total Land Use $13,000 Public Safety Ed Byrne JAG Program $199,000 Emergency Management - Federal 320,000 Special Law Enforcement Assistance Funds (SLEAF) 100,000 State Aide to Local Law Enforcement (SALLE) 70,000 Emergency Illegal Drug Enforcement (EIDE) 38,000 Highway Safety 60,000 Emergency Management - PSEG 47,000 Criminal Justice Council 75,000 Combat Violent Crime 250,000 Total Public Safety $1,159,000 TOTAL ESTIMATED GRANTS $23,319,000 Operating Budget Summary 87

20 Program Summaries - Operating Budget (ALL FUNDS) Summary by Fund Fund FY2018 FY2019 $ Change % Change General Fund $196.1 $201.5 $ % Sewer Fund % Street Light Fund % Crossing Guard Fund % $284.7 $292.0 $ % Highlights of Significant Appropriation Changes in Fiscal Year 2019 General Fund Purpose Millions Description Salary/Benefits $2.8 Employee benefit costs, Step/merit raises Contractual -4.8 Fleet leases not included in IG Credits or Charges IGS Credits 5.5 Fleet leases not included in IG Credits or Charges General and Administrative 1.9 Decrease in credit for administrative support Sewer Fund Purpose Millions Description Salary/Benefits $3.0 Employee benefit costs, Engineering moved to SF Debt Service 0.7 Debt Service schedule General and Administrative -1.9 Cost of Administrative Support 88 Operating Budget Summary

21 Program Summaries - Operating Budget (ALL FUNDS) Program Summaries Description Service Narrative Provides a description of the department s or unit s mission (organization) and scope of service(s). Major Service Level Accomplishments Presents major service level accomplishments performed by each organizational unit. Major Service Level Goals Presents major service level goals to be accomplished by the organization for the year. Most service level goals are referenced to the long-term Programmatic and Financial policies in the Policy Initiatives tab. Examples of linkage of departmental/programmatic service level goals to countywide policy goals and objectives (Policy Initiatives tab) are parenthetically highlighted throughout the program summaries. Performance Measures Presents selected quantitative and/or qualitative performance measurements of the organization and programs. Information is presented for prior year actual, current year estimate and budget year. Budget Highlights Provides highlights of the Fiscal Year 2019 budget and a discussion of the changes to the Fiscal Year 2018 budget. Significant budget increases or decreases by line item are explained. Expenditure & Position Summary Presents expenditures and positions for prior year actual, current year estimate and budget year. Details of positions are presented in the Appendix tab. Operating Budget Summary 89

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