Mayor Purzycki Proposes a Fiscal Year 2022 Operating Budget and Water/Sewer Budget During Annual State of the City Address

March 18, 2021

No property tax increase and no reduction in City services is proposed despite a projected $5.6 million COVID-related deficit due to declining revenue; water/sewer fees will increase by 3% and stormwater by 2%

View the State of the City Address here [youtube.com]. View the Fiscal Year 2022 Budget Summary here

Wilmington Mayor Mike Purzycki tonight presented a proposed $172 million operating budget for Fiscal Year 2022 and a $79.6 million water/sewer/stormwater budget to City Council as part of his annual State of the City Address. The budget proposals keep all City services and personnel in place, and in some cases expand City services, without a property tax increase, even though there is a large budget deficit projected due to COVID-related revenue losses. There is also a modest water/sewer and stormwater rate increase to cover annual costs of operating a water utility.

The Mayor began his address by acknowledging the extraordinary times we are in as a City and country. “This address was not crafted in a vacuum, but rather during an economic crisis in the midst of a pandemic and its many gruesome manifestations—the deaths of a half-million fellow Americans, millions of job losses, the stresses of social isolation, and a lost school year for many of our children. Our challenge is not just to balance a budget but to craft one that confronts the many problems our community faces both caused by, and revealed by, the pandemic. COVID-19 is not an excuse to hide. It is a call to each of us to better understand the problems we face and then to craft solutions responsive to the world as we find it when things return to normal—almost surely a new normal. Solutions that will better our City and the lives of our citizens.”
The proposed Fiscal Year 2022 budget and the Mayoral Budget Address include:

• no property tax increase for the fourth consecutive year

• a balanced budget that draws money from the City’s Tax Stabilization Reserve to cover a projected $5.6 million deficit due to COVID-related losses of revenue, such as wage tax, head tax, and parking enforcement revenue

• a water and sewer rate increase of 3% and a stormwater increase of 2%, which averages to a $1.75 monthly increase for a City customer using 4,000 gallons of water, sewer and stormwater services, and a $1.53 monthly increase for a county customer who receives only City water. This is the first increase in the stormwater rate in seven years. The rate hike is needed to cover annual costs associated with operating a water utility that serves approximately 39,000 customers in Wilmington and parts of New Castle County

• neighborhood stabilization and development funding of $5 million to be set aside to preserve and improve our neighborhoods, along with the possible use of additional funds for neighborhood improvements from federal American Rescue Plan

• neighborhood stabilization and development funding of $500,000 to support the work of the Wilmington Neighborhood Conservancy Land Bank

• additional funding of $300,000 to clean more City streets as part of the Wilmington Clean Streets Program. This would bring the total for next fiscal year to $700,000

• funding to support the year-round employment of young people to assist with them with their career preparation, employment choices, and overall development as a person

• police body worn camera program funding of $650,000 to support staffing and software costs, which fulfills a pledge made last year by the Mayor and Police Chief

• additional park improvements for more City facilities, which are in addition to the $40 million spent in the past few years to rehabilitate the City’s park and recreation system

• a call for Wilmington to lead the effort to improve the education of City children and to support a future traditional City high school. The Mayor said a high school in Wilmington will serve as the anchor for young peoples’ healthy identity and self-image and become a cultural activity center as well as a community support system.

American Rescue Plan: Proceeding with Caution
In his address, the Mayor said had he not decided to cover this year’s structural budget deficit through the Tax Stabilization Reserve, he would have had two painful options to consider—a 14% property tax increase or a reduction of as many as fifty positions. He said once we get through the FY 2022 budget debate, there will be a fiscal cliff that this government will have to reckon with in future years. Mayor Purzycki advised Council members who request to add additional spending into the budget process that there will be a price to pay—either in future large tax increases or more severe staffing layoffs.

“As most of you are by now aware, the federal government will be providing support for states and local governments through the American Rescue Plan. At this time, it appears that Wilmington will be entitled to an allocation of fifty-five million dollars to offset COVID-related expenses and to perform specific activities related to the impact of the virus on our City. There are limits to the way these funds may be spent, and we shall remain true to the spirit and to the letter of the law and its regulations as to the use of these funds. As we better understand the regulations as they are promulgated, we will confer with Council where appropriate. But in any case, these funds are one-time revenue only and must therefore only be used with the long-term structural health of the City in mind and not for any operational programming.”

City Progress: Much for Which to be Proud
Mayor Purzycki said that as we reflect on 2020 and look forward to 2021 there is much to be optimistic about. He noted that the government has laid a solid foundation for Wilmington’s future. Private investment, he noted, has approached one billion dollars over the past four years with much more to come. The Mayor said thousands of apartment units are being built and occupied by new and current residents, thereby stabilizing our crucially important wage tax revenue. Restaurants are opening throughout the City. Three new hotels have opened, and new ones are being proposed. “Your City government has invested $40 million in infrastructure. Twenty-six additional miles of City streets have been paved. Eleven million dollars was invested in parks, community centers, and public spaces. Moody’s improved the status of the City’s bond rating by removing a negative outlook. We have not had to raise taxes in the last three years while our cash balances have improved. And while the pandemic has presented challenges to our revenues in the short term, our long-term outlook gives us reason for cautious optimism. In short, we have laid the foundation for growth—if and only if we choose the path forward wisely.”

Neighborhood Stabilization: Let’s Rebuild and Develop our Communities
Mayor Purzycki said tonight that before there was any mention of federal relief, he was prepared to ask Council to budget $5 million to improve housing in City neighborhoods. “Now I think we have an opportunity to use some of the American Rescue Plan funds to provide even more resources to this effort. Therefore, I will set aside as part of our redevelopment effort, to the greatest extent possible, money to help homeowners improve the homes they have lived in for many years and in which they raised their families. At long last, we will have the resources to demolish many vacant houses that are not salvageable and whose presence ruins neighborhoods. And lastly, we will commit to rebuilding and redeveloping areas of the city that have been without any hope of progress for far too long.”

Housing Code Reform: Thank You for Standing Up for Tenants
Mayor Purzycki noted tonight in his address that half of the residential dwellings in Wilmington are owned by investor/landlords, which, he said, is in large measure why neighborhoods are not adequately maintained.  “Too many investors don’t seem to care enough about maintaining their properties or about their tenants. This Council took its first brave step in rewriting our laws governing rental housing. Over the scare tactics and fear mongering of some landlords, this Council recognized the importance of giving us the tools to effectively enforce our housing codes and to protect our economically vulnerable citizens. Someday we will all look back on this significant change and wonder what all the opposition was about. Thank you to the Council members who supported this significant and important protection for tenants. If we are going to transform Wilmington’s neighborhoods, however, the landlords must be a part of the solution. I look forward to engaging with them on how they can assist in strengthening the City.”

Gun Violence: A Scar on the City’s Soul
Mayor Purzycki called rising gun violence a scar on the City’s soul that has cost lives and devastated families. “There is a sense of urgency to reduce it, but this urgency inevitably collides with the dispiriting reality that thirty-one people lost their lives to gun violence in our City last year, a 35% increase over the year before. One hundred sixty-eight people were shot, a 50% increase over the prior year. We take no solace in the fact that this follows a national trend of worsening violence in most all of America’s cities since late 2019. The question for us is, what do we do about it? I don’t believe this is a policing problem. In fact, our police department has done an outstanding job during a time when the entire criminal justice system has been shut down, criminal trials have ceased, and illegal guns have flooded the streets.

“It is an article of faith that if we don’t fix the underlying social ills, we will never reduce crime in the long run. Therefore, it will be the theme of this administration to improve the housing and the environment our children are raised in. We will continue to improve our parks beyond the tremendous investment we have already made over our first four years. Our clean teams will continue to clean the streets and our youth career employment programs will now employ our young people not just during the summer, but throughout the year.”

Education of Our Children: It’s Time For Us to Lead
Mayor Purzycki said tonight that Wilmington must re-engage with the education community after decades of having little or no say about the ways our children are educated. “For over one year, I have been an active part of the Redding Consortium, which is pressing for equity in education that will certainly benefit Wilmington’s children. But we must do more. Wilmington must not just join. It must lead. If we are unhappy with the condition of the City, its poverty, and its crime, then we must strengthen the only institution standing that can influence the future for Wilmington’s children, and in the end, the City itself. I commit to you my dedication to a better education for our youth and a City high school that can serve as the anchor for our young peoples’ healthy identity and self-image—a high school that serves also as a cultural activity center and as a community support system.”

Closing Thoughts: We Can Do More Than Any Government That Has Come Before Us
In closing his State of the City address this year, the Mayor said our mission to resolve current challenges remains unchanged. “For as long as our longest-serving Councilmember, Loretta Walsh, has been on Council we have had to fight poverty, crime, middle class flight to the suburbs, structural limits on our ability to govern ourselves, and a school system that does not serve us well enough. It is our charge as elected members of our community to make things better. To set aside any differences that divide us, because in the end we all want the same things. We should commit that by the end of our term in office we will have done more than any government that has gone before us to increase shared prosperity, to rebuild our neighborhoods, to improve the internal operation of the government, and finally, to do all in our power to see that our children have the same chance at a bountiful life that we have had. I ask for your support of this budget and look forward to working with you on solutions to our remaining challenges.”

Wilmington City Council will hold public hearings on the Mayor’s budget proposal during the month of April. Council is expected to vote on a new budget for Fiscal Year 2022 in May.