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The
unanimous vote came after Richard Korn, one of two residents
challenging the legality of maintaining large budget reserves,
told the lawmakers that he will go back to Court of Chancery
seeking to overturn the two ordinances enacted to do that.
He
called the measure an "after-the-fact pardon of unlawful
conduct" and said that it "does anything but put right the
errors you have inherited."
Council president Paul Clark said that enacting the ordinances
ordinances virtually guarantees "another four years of no tax
increases."
The
action, he said, "answers the Chancery Court order" and is "the
best use of the reserve funds for the taxpayers of the county."
The court previously declared
that several reserve accounts established during the
administration of former County Executive Thomas Gordon were
illegal because they had not been set up by legislative
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Finance director
named
County Executive
Christopher Coons finished the aligning of
county government's upper management by
nominating Michael Strine to be chief financial
officer.
Strine
has been executive director of the Delaware
Public Policy Institute and is a former director
of policy and operations in the state Department
of Finance.
His
appointment is subject to County Council
confirmation. |
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action. Although
Chancellor William Chandler said that the county's
'rainy day' fund -- a set-aside intended to provide
money to meet major unforeseen emergencies -- met that
constitutional test, he questioned its size in a
footnote in his decision. The county fund is set at 20%
of the operating budget while state government has a
comparable fund that is only 5% of its budget.
Enabling legislation
enacted by Council at its regular session on Mar. 22
provides for two new accounts, a Tax Stabilization
Reserve Account and a Sewer Rate Stabilization Account.
They are in addition to the existing Budget Reserve
Account -- the official name of the 'rainy day' fund --
which is kept at its present size.
A companion measure, also
enacted unanimously but without prior discussion, amends
the current budget to provide $96,423,196 for the tax
rate preservation account and $71,661,804 for sewer fee
rate preservation |
Those
amounts are the sums of several Gordon-era off-budget accounts
as of last June 30 minus what has been appropriated since then.
The county's fiscal year runs from July 1 through June 30.
Korn
and his co-plaintiff in the civil suit, Andrew Dal Nogare, have
asked Chandler to order county government to refund the money in
the accounts he found to be illegal to taxpayers. County
officials have maintained that not only would be 'fiscally
irresponsible' but would result in a situation where property
owners would receive a check in May or June and be required to
pay a higher amount when their tax became due in September.
Speaking at a meeting of Council's finance committee prior to
Council's general session, Korn said that would not necessarily
happen. He said elected officials have the responsibility to
manage taxpayers' money and to accept the need to balance
budgets by raising taxes or cutting spending.
At the
Council session, Korn vehemently objected to a reference in the
preamble of the enabling ordinance to the funds that Chandler
struck down as being "technically illegal." He said that a
26-page judicial opinion could not be misconstrued as "an order
[referring to] a mere technicality."
Both
at the committee meeting and during the Council session, Council
members lined up behind Clark and County Executive Christopher
Coons's administration in rejecting the idea of a refund. All 12
district Council members signed on as co-sponsors with Clark of
the two account-establishing ordinances.
Councilman George Smiley noted that he has about 40,000
constituents in his district "and I heard from only one who
wants a rebate."
"If we
didn't have the reserves, we'd have an increase in taxes every
year," said Councilman Penrose Hollins. He added that residents
generally are happy with "the services and programs they've
enjoyed for the past 10 years without a tax increase."
David
Singleton, the county's chief administrative officer and
second-ranking executive, testified on behalf of the Coons
administration that "I hear no clamoring for cuts in county
services."
The
enabling ordinance specifically provides that the money in the
funds can be used only to offset budget deficits or to avoid
having to borrow money through the sale of bonds. Both the
general fund and sewer budgets are currently running deficits.
There is general agreement that sewer rates will have to be
increased in either fiscal 2006 or 2007.
"We
are taking action that is legally correct," Councilman Robert
Weiner said. "The fiscally prudent thing to do is the course
we're taking."
"We
are answering what it is that we have been asked by the court to
do," said Councilwoman Karen Venezky, who chairs the finance
committee.
Councilman Timothy Sheldon said, "By doing it the way we're
doing it, I feel confident that we are doing the right thing."
Korn
received support for his position from Vincent Sottile, a civic
association president, who said that enacting the ordinances
instead of approving a rebate was "arrogant and paternalistic"
and was being done "not for the convenience of taxpayers [but]
for your convenience to get re-elected."
County
resident Charles Johnson said he was "appalled that [his fellow]
Democrats are not willing to give the people their money back."
Democrats hold an 11-to-two majority on Council.
On the
other hand, long-time civic activist Marion Stewart told the
finance committee that even considering a tax rebate "is as
silly as anything I've seen in a long time." She said that "what
people don't like is uncertainty and instability" when it comes
to such things as their year-to-year tax liability.
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