Sussex looks to rework budget, after bringing in extra realty transfer tax funds

Glenn Rolfe
Posted 2/10/21

GEORGETOWN — Paramedic service, ambulance service and economic development tied to job creation and retention are reaping a windfall from realty transfer taxes in Sussex County’s fiscal year 2021 …

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Sussex looks to rework budget, after bringing in extra realty transfer tax funds

Posted

GEORGETOWN — Paramedic service, ambulance service and economic development tied to job creation and retention are reaping a windfall from realty transfer taxes in Sussex County’s fiscal year 2021 budget projection.

Gina Jennings

Through a budget ordinance amendment introduced at Tuesday’s County Council meeting, Sussex County Finance Director Gina Jennings recommended:
• $1 million for land acquisition for permanent county-owned sites for three Sussex County Emergency Medical Services stations currently operating at rented bases.
• $5,375,000 to support fire company/ambulance services to the tune of $250,000 for each of the 21 companies (plus $125,000 for Carlisle Fire Co., which serves Kent and Sussex counties).
• $3 million for the Economic Development Loan Program, also known as the ExciteSussex Fund. The county’s $3 million would be matched at a 3-to-1 ratio by program partner Discover Bank of Greenwood, for a total of $12 million.

This scenario stems from financial news that Sussex County, as of Jan. 31, had collected $32,540,000 in realty transfer taxes. That’s a difference of $19,415,000 from conservative budget projections last spring — $13,125,000 projected over the first seven months.

Without knowing the impact of the coronavirus pandemic during fiscal year 2021 budget preparation, the county conservatively projected $22.5 million in realty transfer tax — 65% of the $35.7 million for fiscal year 2020.

“As you know, our fiscal year 2021 budget is very conservative. We didn’t know how COVID 19 was going to impact us,” said Ms. Jennings during her presentation. “After seven months into the fiscal year, we now see how our revenues have been impacted by COVID, and we have the opportunity to amend the budget by increasing realty transfer tax-eligible expenditures.”

Eight supplemental budgets were enacted, leaving $11,415,000 in realty transfer tax “that we brought in that we did not anticipate bringing in,” said Ms. Jennings.

In Sussex County, realty transfer tax is expended solely on the capital and operating costs of public safety, economic-development programs, public works services, capital projects and improvements, infrastructure projects and improvements and debt reduction.

“We spend 100% on public safety. What is important here to note is what you can spend realty transfer tax on,” Ms. Jennings said.

Three criteria were examined. “We want to make sure it fits in the realty transfer tax category (and that) it’s not creating an ongoing expense that we have to continue to support year after year, and it should help with the sustainability of the county,” she said.

Fire companies may benefit
The $1 million in land acquisition for future EMS stations “falls under council’s vision to continue to move to a model where we own our paramedics’ future versus rent those stations,” said Ms. Jennings.

Currently, Sussex County has rental agreements for its EMS stations in Milton, Bridgeville and Lincoln.

“Bridgeville, Lincoln and Milton are areas that we are currently working on identifying ideal spots for land procurements,” said Sussex County EMS Director Robbie Murray. “We already own the property for the Dagsboro/Millsboro unit, and we are exploring the opportunity to potentially build that next fiscal year.”

The new EMS station under construction to serve the Seaford area is slated to be completed this fiscal year, Mr. Murray said.

The county has an unusual “free” rental agreement for its Bridgeville EMS base, behind Delaware State Police Troop 5, that was previously a visitor center.

“When Troop 5 was purchased, the county made a large monetary contribution to that complex, and part of that exchange was for us to have a place to call home there,” Mr. Murray said.

Under the plan in the proposed ordinance introduced by County Councilman Doug Hudson, each ambulance company/fire company in Sussex County — 21 in all — would receive $250,000 for the purchase of a new ambulance. Carlisle Fire Co. in Milford, which services Kent and Sussex, would receive half that amount.

Separate accounts for each company would be set up through the Delaware Community Foundation. The county would remain on the account as oversight to ensure money pulled out is being spent as intended.

“Buying an ambulance would help with the maintenance and operating costs going forward,” said Ms. Jennings. “So this is a one-time thing, but it will last year after year. Maintenance costs could be used for other things.”

ExciteSussex Fund program
The additional $12 million through the county contribution and Discover Bank’s match will increase the fund’s total to $16 million since 2017.

“The no-brainer is we put in $3 million, and we get $9 million. That’s a huge return,” said Ms. Jennings.

The ExciteSussex Fund program was launched a little more than three years ago. A starting $4 million — $1 million from Sussex County and Discover’s 3-to-1 match — launched the program, available to existing businesses with 10 to 500 employees and designed to create and retain full-time jobs in Sussex County.

The investment in the ExciteSussex program has been utilized to create 131 jobs thus far, Ms. Jennings said.

Businesses can borrow up to $1 million under terms of the program. As an example, the effective interest rate of a loan taken out Feb. 4, 2021, would have been 3.44%.

“It’s a low-interest loan,” said Ms. Jennings. “It’s a very attractive loan for businesses in Sussex County.”

Councilman John Rieley questioned the process.

“On the economic-development loans, that becomes a revolving fund, once they have repaid the money,” he inquired.

“That is the intent,” said Ms. Jennings.

Councilman Rieley continued, “With the $4 million that is already in there, eventually, we would have $16 million available in a revolving fund, so that would be ongoing.”

“That is correct,” said Ms. Jennings. “You always do, (as) council, have the option to pull it out, but it is set up to be revolving.”

ExciteSussex funding is managed by the National Development Council and distributed in the form of low-interest, long-term loans to qualifying borrowers that are evaluated by the county and the NDC.

With the ordinance’s introduction, the budget amendment request will soon be the focus of a public hearing before County Council.

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