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Council president Paul Clark said only that he was withholding
the measure "at the request of the administration." Chief
administrative officer David Singleton told Delaforum that the
proposed ordinance was being "delayed because the lawyers have
to do a little more work [on it]."
There
was no public reference to the reopening of the suit at the
regular semi-monthly Council meeting on Feb. 22 nor at a finance
committee meeting earlier in the day. Nothing was said about
withholding introduction of the ordinance at the committee
meeting, which followed by about two hours an announcement by
Richard Korn, one of the plaintiffs in the suit, and his lawyer,
Ronald Poliquin, of further legal action.
It is
not uncommon for a measure to be introduced into Council with
the expectation that it will be replaced by a substitute
modifying its language. On occasion, the substitute turns out to
be a total revision of the original. Under Council rules, that
can be done so long as the title of ordinance isn't changed. The
procedure permits a vote to be taken at the next Council
meeting.
At an
executive committee meeting on Feb. 14, Council members were
unanimous in deciding that there should be no rebate of the
approximately $151.8 million of general fund and sewer fund
reserves beyond the 'rainy day' set-asides which Chancellor
William Chandler did not specifically rule illegal.
County
Executive Christopher Coons, Singleton and Clark have all said
that a rebate would be "fiscally irresponsible." The executive
committee was told that it would have to be followed by a 17%
increase in the property tax rate and a 33% increase in the
sewer fee rate for the fiscal year which begins on July 1.
In
their amended complaint filed with the court on Feb. 22, Korn
and Andrew Dal Nogare, the other plaintiff, seize upon a comment
in Chandler's decision questioning whether county government has
the authority to establish a reserve to meet unexpected
emergencies greater than the 5% that is authorized by the state
constitution for state government. They ask the court to order
that any money in excess of 5% in that reserve also be rebated.
That
would bring the total rebate to about $190 million. The county's
current combined general fund and sewer fund budgets total
$210.5 million.
"No
government in the country has in excess of 100% of its budget
[in reserve," Poliquin said that the press conference at which
the filing of an amended complaint was announced.
Both
Korn and Poliquin maintained that a rebate or a tax rate
reduction which accomplishes the same thing would not require
rate increases nor result in a reduction in "essential
services." The budgets can be balanced, Korn said, "by cutting
out some of the fat."
Neither man would be specific about where in the budgets they
think significant cuts can be made. "That is a political
decision which has to be made by the people on Council," Korn
said.
Singleton told Delaforum that he "disagree[s] with Mr. Korn's
interpretation" of Chandler's reference to the state's reserve,
adding that state government has other reserves in addition to
its 5% 'rainy day' fund. Singleton formerly was state secretary
of finance.
At the
previous executive committee meeting he said the administration
believes that Council can retroactively authorize other funds on
the basis that the chancellor ruled them illegal because they
were set up unilaterally by the previous Gordon administration
without legislative action. The proposed ordinance which Clark
withdrew would have made the new funds retroactive to last July
1. It also contained wording to the effect that, if
retroactivity was subsequently ruled invalid, the funds would
exist from the date the law is enacted.
It
would set up two new funds instead of the three that were
referred to in the administration's presentation to the
executive committee. The fund not to be established referenced
the capital budget for sewers.
The
new Korn-Dal Nogare petition to the court also seeks a permanent
injunction against the county proceeding with a previously
authorized $80 million bond issue. Chandler declined to grant
such an injunction, but did note in his decision that he doubted
the issue could go forward since it was based on a budget that
he declared illegal. Coons and Singleton have said they want to
wait until the matter of reserves is settled before deciding if
and how to proceed with the bond issue.
Other
than to say they did not think their suit would have an effect
on it, Korn and Poliquin declined to speculate on what the
result of their suit and related events would have on the
county's prized triple-A bond rating, which has been conferred
for several years by the three major Wall Street rating firms.
Poliquin said the suit was not intended solely as an indictment
of former County Executive Tom Gordon and his administration.
The lawyer said Coons, who previously was president of County
Council, "has to [also] take responsibility for what happened in
the past."
Korn
was unsuccessful last year in a bid for the Democratic
nomination run for election to succeed Gordon. Coons won the
nomination in a three-way primary election campaign against Korn
and former administrative officer Sherry Freebery.
Asked
why the amended complaint was filed before Council and the
administration acted on the reserves or bond issue in response
to Chandler's decision, Korn said he felt the move "is ripe for
today."
"This
is a defining moment for the county," he added.
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