Mayor Purzycki Proposes a Fiscal Year 2024 Operating and Water/Sewer Budget During the Annual State of the City Address

March 16, 2023

Operating budget growth is held at 3.5% and water/sewer budget growth to just 2.5%; the proposed budget includes no new property tax increase, a 5.7% increase in water/sewer fees, and a 6% increase in stormwater rates

Read the Mayor’s State of the City Address here.

Read the Fiscal Year 2024 Budget Summary here.

Wilmington Mayor Mike Purzycki tonight presented a proposed $183.1 million operating budget for Fiscal Year 2024 and an $84.2 million water/sewer/stormwater budget to City Council as part of his annual State of the City Address. The City’s new fiscal year begins on July 1. The Mayor’s proposed operating budget has increased only 3.5% over current fiscal year expenditures, which Mayor Purzycki says is an indication of the considerable budget discipline that has characterized his administration since 2017.

The Mayor has once again presented a balanced budget, as required by law, and is maintaining City programs and services at their current levels in pursuit of a “safe, healthy, and prosperous City for our children to grow up in” and reach their full potential. He is proposing no new property taxes for FY24 while requesting a 5.7% increase in water/sewer rates and a 6% stormwater rate increase to fund regular and unanticipated costs associated with operating a water utility.

The Mayor began his budget address by reporting that, three years after the start of the coronavirus pandemic that transformed American lives and negatively affected the fortunes of our nation’s cities, Wilmington withstood this once-in-a-lifetime crisis and “is better than we could have ever imagined just a short while ago.” As the City moves into a post-pandemic reality of a declining tax base and future fiscal challenges, Mayor Purzycki noted that the construction of apartments, hotels, and restaurants has energized Wilmington’s economy, with the Downtown District, the Riverfront, and notably the City’s neighborhoods all thriving economically. This has helped to raise Wilmington’s profile both regionally and nationally.

“When would you have imagined that Wilmington would be chosen by Conde Nast as one of 23 best cities in America to visit [cntraveler.com],” the Mayor asked, “and featured by Forbes as one of their 22 best places to travel [forbes.com]? And repeatedly featured in Virginia [northernvirginiamag.com] and Philly [phillymag.com] magazines for our restaurants, hotels, and amenities? Thrillist – Washington D.C. [thrillist.com] lists Wilmington among seven cities to visit this winter.”

Contrasted with Wilmington’s current attractiveness and bright future, said the Mayor, are projected budget deficits down the road. Mayor Purzycki said these concerns are related to anticipated expenditure pressures such as personnel costs and costs associated with delivering City services at a high level. He said as costs rise, the City’s tax base must be increased, especially in a few years, and that’s where the concerns lie—having the funding to cover projected increased costs.

“While City finances are fairly stable now, there remains an unsettling threat of a continued loss of revenues from several sources,” said the Mayor. “For example, people continue working from home, threatening our wage tax revenues. We have managed to offset losses this year, but the challenges ahead remain real. Thanks to the outstanding work by my department directors and senior management, led by Chief of Staff Tanny Washington, in this environment of high inflationary pressure, the growth in this year’s proposed budget was kept to only 3.5%.”

The proposed Fiscal Year 2024 budget includes:

• an appropriation of approximately $579,000 in additional funding for miscellaneous projects, including an additional $85,000 for the Mayor’s Office to expand community programs and cultural activities, and $50,000 to help support the Beautification Commission in its mission to enhance the attractiveness of the City’s public spaces

• a projected increase of approximately $578,000, or just 3.6%, for employee healthcare, a growth rate in healthcare costs that is only about half of what is projected nationally for most other employers

• an increase in Motor Vehicle Costs of almost $651,000 driven by large hikes in the cost of new cars – especially police vehicles – and an increase in fleet maintenance costs as inventories of auto parts remain low

• an appropriation of $250,000 in funding for the Down Payment Settlement Assistance Program for homebuyers who exceed federal income limits

• a decrease in Water/Sewer legal fees from $700,000 to $200,000, or just over 71%, given those legal proceedings against New Castle County (wastewater treatment contract) and Honeywell (breach of contract regarding the renewable energy bio-solids facility) have been settled

• an addition of $250,000 to the Finance Department’s Water/Sewer Fund to be able to continue to help low-income Wilmington families with their water bills in light of the end of federal funding for two temporary utility assistance programs

The water/sewer rate increase of 5.7% and a 6% stormwater rate increase is projected to produce additional revenue of $3.61 million. This rate increase will result in an average $3.70 monthly increase for a City customer using 4,000 gallons of water per month. The rate hikes are needed to cover annual costs associated with operating a water utility that serves approximately 36,000 customers in Wilmington and parts of New Castle County while supporting initiatives essential to achieving financially self-sustaining and environmentally sound water, sewer, and stormwater utilities.

Other excerpts from Mayor Purzycki’s Fiscal Year 2024 State of the City Address:

Investing in Neighborhoods and City Residents:
“Unprecedented investment has occurred in our neighborhoods,” said the Mayor. “Strengthening our neighborhoods and our neighbors has been an overarching goal of this Administration and this Council.” The Mayor proceeded to highlight a number of accomplishments toward this end, including:

•$150 million being invested in Amani Village, EastSide Charter School, and a new Kingswood Community Center in Northeast Wilmington; Amani Village, an existing 140-unit Purpose Built Community under the Reach Riverside umbrella, is now seeking to expand one of the most ambitious housing projects in the City’s history

•On the East Side, the administration has committed $20 million of American Rescue Plan dollars for up to 150 new and redeveloped houses for residents; Habitat for Humanity has repaired or rebuilt 49 houses to date for City homeowners with another 40 in process or scheduled for repairs; overgrown alleys have been cleaned and the Hattie Phelan Park has been reclaimed; Governor Carney has committed almost $100 million to the rebuilding of Bancroft School; the Wilmington Housing Authority and the Community Education Building have jointly purchased the Elwyn Building on East 11^th Street to turn it into a social services support center for residents; and we continue to work with community partners like Central Baptist CDC to rebuild our historic East Side. And we have asked the state for $1.5 million to remake Herman Holloway Park – hopefully, to include a likeness of the iconic senator himself.

•On Lower Hilltop, the Wilmington Land Bank has committed millions of dollars to rebuild another long-neglected neighborhood, acquiring approximately 40 parcels with five rehabs nearing completion; problem alleys are being gated by L&I; abandoned houses are being closed or demolished; open space is being created

•In West Center City, 54 new affordable housing units just opened while 72 dilapidated apartment units are set to undergo a complete rehabilitation

•The City’s major employers continue to hold firm to their commitment to Wilmington, with JPMorgan Chase alone investing $250 million here

•Like other cities that are encouraging apartment development to offset reduced office space, Wilmington is ahead of this trend with 2,400 units having been built since this Administration came into office; nearly 1,000 new apartments are in production, continuing to bolster the City’s future vitality – all done without displacing a single resident

 

A Significant Decrease in Crime:
“Violent crime has been reduced to the lowest level in memory almost exclusively by the work of our police department. While the nation’s cities in 2022 experienced a drop of 6% from the previous year, Wilmington saw a 62% drop in homicides and a 17-year low in overall violent crime. Our new chief, Wilfredo Campos, has implemented deployment strategies that will strengthen our ongoing commitment to community policing – an objective we all share…. We are making progress in building confidence between our officers and the public they serve [and] I believe that the WPD is, and will continue to be, one of the very finest departments of its size in the nation. I remain appreciative of the many contributions and suggestions made by Council to improve it even more. We have worked together to bring the impressive work of the Community-Based Public Safety Collective to Wilmington from Newark, NJ, and under the leadership of Dr. Debra Mason, 18 of our citizens will become front-line trained professionals prepared to interrupt the violence that plagues our neighborhoods without having to depend entirely on our police officers.”

A Focus on Fairness and Inclusivity:
“For the first time in the City’s history, Wilmington is reviewing closely the fairness and inclusiveness of our government procurement process. To this end, we launched a disparity study in 2022. Our goal is to make sure the procurement system is providing minority and women-owned businesses the opportunity to bid for City-issued proposals for goods and services. We have begun to act on the recommendations of the Disparity Report, which was compiled by Miller 3 Consulting. I want to thank Council – and especially to remember our late dear friend Rysheema Dixon – for working with the Administration to bring about needed change. The patterns of longer-term disparity, as presented in the report, did not start with my Administration, but it is my goal to see these practices end before I leave office. I pledge to continue working with City Council for as long as it takes to get the job done.  Along these lines, however, it should be noted that this administration has extended over $4 million in credit and grants to minority developers and businesses.”

Changing Our City for the Better:
In his address, Mayor Purzycki highlighted a number of accomplishments over the past year as well as his plans to better Wilmington moving forward. These include:

•An equitable sewer agreement with New Castle County – which eluded previous administrations for nearly 20 years – that will endure for the next decade

•Long overdue tax fairness for property owners in the City following the first county-wide property reassessment since 1983

•A City fund balance that has increased from a paltry $34 million in 2017 to a very healthy $75 million (40% of the budget), allowing Wilmington to maintain its excellent bond rating

•The construction of a beautiful performance stage at the Urban Artist Exchange on the East Side, which will soon host 10 free concerts a year for three years thanks to a $90,000 grant from the Mortimer & Mimi Levitt Foundation

•Wilmington’s HBCU Week [hbcuweek.org] – which reached 8,600 students and dispersed $11 million in scholarships at the first-ever HBCU College Fair in Disneyworld last year – will continue to provide tens of millions of scholarship dollars to our young people aspiring to attend our nation’s Historically Black Colleges and Universities; they will join the 22,000 who have attended our College Fair since 2017, and the 4,300 who’ve been accepted through this nationally recognized program while receiving nearly $35 million in scholarships

•After having been neglected for years, our firehouses will finally be getting a full renovation, with one already completed, another underway, and still another in pre-construction

•Thanks to the extraordinary cooperation from our partners at DelDOT, we successfully managed the two-year reconstruction of I-95 and together we have paved almost 38 miles of City streets; DelDOT is restoring all the recreational facilities that were previously in the highway right-of-way and has added decorative fencing along the highway

•DNREC has committed to finally improving the aesthetics of H. Fletcher Brown Park along the Brandywine River

•The next phase of the renovations to Rodney Square will be completed this summer

•A plan to hold the owners of vacant houses accountable for dragging down our neighborhoods by charging vacant property owners more appropriately for the damage they inflict across our City

•In recognition of new employment realities, a proposal to remove City residency requirements that currently serve as a barrier to hiring and result in vital positions being left vacant across numerous departments

•A proposal to update City fees – some of which have not been increased for 50 years – to meet the budgetary demands of delivering regulatory and enforcement services

•In order to remain competitive with other employers, we plan to conduct a Citywide compensation study, to be completed this spring, to help guide the salaries of our valued employees

Wilmington City Council will hold public hearings on the Mayor’s budget proposal during the last week of March and in the month of April. Council is expected to vote on a new budget for Fiscal Year 2024 in late May with the budget taking effect on July 1, 2023.