Council and Mayor Compromise on FY2015 Budget

Posted on  05/19/2014 3:25 pm

Council Sought a Reduction in the Property Tax Increase from 9.9% to 5%, a Reduction of the Proposed Water/Sewer Fee Increase from 8% to 5%, and the Addition of $353,000 to Fund a New Police Academy to Fill Vacant Police Officer Positions

Wilmington City Council President Theo Gregory today announced a budget compromise with the Williams Administration for the Fiscal Year 2015 which begins on July 1. Substitute Ordinances to fund the City’s revised $150 million Operating Budget and the City’s revised $68 million Water and Sewer Fund will be discussed at a Council Finance Committee meeting today at 5 p.m. The Council President said he is canvassing members of City Council to generate the seven votes needed to approve the budget compromise which is scheduled to be considered at Thursday’s regular Council meeting. Both meetings of Council will be broadcast live by WITN, Channel 22, Wilmington’s government television station.

The highlights of the compromise for the FY 2015 Operating Budget include:

  • A reduction of the property tax increase to 5% instead of the proposed 9.9%
  • A reduction of $794,000 in ongoing and yearly expenditures which includes the elimination of four vacant positions (Booting Specialist/Finance Department, Fleet Manager/Public Works Department, Legal Administrator/Law Department and Document Manager/Mayor’s Office of Information Technology)
  • The addition of $353,000 as a one-time expenditure to fund a new police academy to enable the Police Department to fill vacancies due to attrition that have depleted the 320 officer force to a total of 305 officers
  • No reduction in City services over the FY 2014 levels

The highlights of the compromise for the FY 2015 Water and Sewer Fund budget include:

  • A reduction in the water/sewer rate increase to 5% instead of the proposed 8%
  • A reduction in the storm water rate increase to 5% instead of the proposed 7%
  • A reduction of $400,000 in ongoing, yearly expenditures
  • No reduction in water and sewer services over the FY 2014 levels

Council President Gregory said while citizens and businesses clearly opposed the full tax and water/sewer fee increases proposed by the Mayor in March, they also told Council they wanted a reduction in government spending but no reduction in City services. Gregory said those competing values, also articulated to and by Council Members, helped to produce the budget compromise with the Williams Administration.

The 5% increase in property taxes would result in an increase of approximately $3.31 per month for a property with a City-average assessed value of $45,000. The 5% increase in water, sewer and storm water fees would result in a $2.39 per month increase for the average water service customer who uses 12,000 gallons of water per quarter of the year. The compromise FY 2015 Operating Budget also reduces the projected surplus for the new fiscal year from $2.75 million to approximately $1.4 million. The Council President said this is a reasonable surplus based on a budget that totals nearly $150 million.

Aside from the budget compromise, City Council Members expressed to the Administration the need for overall government expenditures to be reduced significantly in future years. To reach that goal, Council made two suggestions, which include:

  • The need for a management and operational study of the Departments of Public Works and Finance to determine how to reduce annual spending for those departments and streamline operations. The study would look at the use of consultants and the number of upper management positions in the departments—subjects that surface each year during budget hearings and subsequent budget negotiations. Because this type of management study would have to be initiated by the Administration, City Council has informed the Mayor that it would consider amending the new budget in order to fund such studies.
  • The need for the Williams Administration to revisit a similar department-wide management and operational study that was conducted of the Wilmington Fire Department in 2012. The study —the Berkshire Advisors Report—was ordered by the former Baker Administration and passed along to the Williams Administration in 2013 for its assessment. The report demonstrates how the City could save more than $2 million a year in expenditures for the Fire Department without reducing public safety for residents or firefighters. Some members of Council are urging the Administration to take a fresh look at the report. While the Administration implemented a few of the Berkshire recommendations, none of them resulted in any cost savings for the department.

Finally, the Council President said Council is very concerned about potential budget implications from ongoing negotiations between the Administration and the City’s labor unions. Gregory said Council is keenly aware that most City employees have not had a pay increase in several years. However, he said for the moment though, the labor talks will have to run their course before the Administration can discuss with Council the future trend for City labor costs which are always the bulk of any government budget plan.