Last night, new Wilmington Mayor Mike Purzycki released his first budget with an address that both laid out the fiscal challenges and laid out a vision. As expected, the fiscal challenges are serious. The City is $14M in the red, which is paid for from the city’s reserve fund. It is effectively wiped out by this deficit. The City’s budget process this year was done on a four-year basis, which often lets you see the effects of a single year’s spending and revenue generation in out years. This approach lets you plot the effects of long-term policy implementation as well as a way to develop some standard performance measurements. The risk of this approach is the notorious difficulty in projecting financial performance more than a year out. Still.
The deficit left by the previous Administration comes mainly from:
- $6.7 million in employee raises
- Minimum of $6.5 million for workers compensation claims from the firefighters injured in the Canby Park fire — the City was self-insured with no self-insured reserve
- Budget overruns for police and fire overtime
Add to that a projected increase of $1.2M in employee health care costs this year, a loss of $1.4M in red light camera revenue (PLUS $800K refund to those wrongly ticketed) and a projected decrease in the City wage tax of $3M (as projected by WEFAC).
To address this, Purzycki proposes to:
- Raise property taxes by %7.5 in 2018
- Increase Water/Sewer rates by 4%
- Eliminate 29 currently vacant positions — including 16 firefighter and 5 WPD positions
- Revisit employee contracts — he wants to get more efficiency from city employees theoretically making it easier for managers to ensure that they can deploy staff as needed. He also wants to revisit employee health care participation — asking employees to pay more for their insurance and co-pays. The proposal is to bring this in line with the State health care system. It also sounded like he wanted more of a focus on employee wellness.
- Implement some additional cost saving programs from disposal at Cherry Island , from animal control and refinancing current debt.
Current vision I would describe this way:
- Do the work to eliminate Wilmington’s structural deficits and stop the yearly bleeding so that the city can turn to longer term investments
- Start setting up methods to set and measure performance targets for all departments
- Implement a pilot Neighborhood Revitalization program:
Soon, I intend to announce a section of our city as the first of the Neighborhood Stabilization projects. This will serve as a model for how a concentration of resources from city agencies and state agencies can, together, transform our neighborhoods. Police, Public works, License and Inspections, Parks and Recreation and Housing will work with the new Land Bank and state housing agencies to leverage our funding into renewal for impoverished sections of Wilmington. At the same time, state agencies will provide wrap‐around supports for many of our fragile young people in these areas, fulfilling the recommendations of the CDC report championed by Council President Shabazz.
- A Clean Streets program — where major roadways are cleaned regularly
- Focus on Public Safety with a new Chief at the helm
- Work to find jobs for residents
- Lobby for Wilmington to more fully govern itself:
- This is a good time to state what should be a guiding principle of our argument for the right of self‐governance. Wilmington cannot be expected to govern itself when it is constrained at every turn from doing so by the state. It never had the right of annexation so that it might have, at one time, grown organically. It had its residency requirements dictated by state legislation. As previously stated, the legislature last year dictated to us our inability to fine illegal right turns. We are prohibited from raising revenue from any major source other than the property tax. And, Wilmington has been all but shut out of the important question of how our children get educated. We must all urge our legislature to empower Wilmington to govern itself.
There’s a lot going on in this budget, and I think that much of it will get lost in what is likely to be a pretty vocal pushback on the vacancy cuts, re-implementation of the rolling blackouts and the revisit of the employee contracts. But here are my takeaways:
- Purzycki’s campaign was focused on more development in and investment in Wilmington. Given all of that focus, there isn’t as much of that here, with the exception of the Neighborhood Stabilization program. Maybe this program is bigger. But it is tough to see what we’ll be able to do financially to support additional private investment in the city. So this seems to be a pull back based on the reality of the city budget — and this first year is all about stabilization of the fiscal picture, stabilization of fiscal accountability, establishing performance metrics and focusing on improving public safety.
- City employees are going to be asked for greater efficiency and greater productivity. They are also going to be asked for more contribution to their health care. This will be interesting to watch given that City employees are not paid on the same scale as State employees. But I watched some City employees cheer the “Businessman” Mayor and it will be very interesting to see their reaction to being asked to live with employment expectations similar to that asked for private sector employees.
- Beyond stabilizing the budget and budget process, the most impactful thing for Wilmington would be for the GA to let go the tight box they make Wilmington live in. It is pretty senseless to have your biggest city constrained by a state legislature that is having a tough time managing the state, much less Wilmington. I’d have to think through some of the larger ramifications of this, but letting Wilmington be accountable for itself seems like a good idea.
Did you watch the address? What did you think about this?
I thought his pushback on the rolling bypass was interesting, i.e. he can keep all engines running if the FF union would agree to certain shift changes in the CBA. That should deflate some of their rhetoric trying to link last year’s deaths with the rolling bypass. If they believe the bypasses affect safety, and the bypasses can be eliminated by agreeing to a shift change, how seriously do the union brass take FF safety if they don’t agree to the shift changes. (That’ll be the argument anyway.)
I was also pleased to see some overtures toward self governance and a little pushback against the restraints Dover has placed on the city over the past few decades. I wasn’t expecting that from this Mayor. I don’t have a whole lot of optimism on this front (Wilmington’s GA delegation has been among the worst offenders in this regard) but you never know. Glad to see the Mayor’s made it a priority.
Yes. Some of the serious issues with both WFD and WPD is how personnel are deployed (or not deployed). Getting shifts and attendance in some control would go a long way towards easing the staffing issues and overtime issues. I also think that the WFD has been doing rolling bypasses long enough to be able to get some genuinely good data together to provide a non-emotional case for keeping stations open. As of now, they are operating to stoke fear and anxiety — and while they might be right — they need more to convince me, really.
Exactly. Show me (The data).
Forgot to note that watching City Council will be interesting on this. I don’t think that many got the point that Purzycki thinks that rolling bypass can be fixed with an adjustment in shifts. It’s been remarkably quiet (except on the NJ comments) on this so far.
And then the Mayor’s office posted the NJ story to their FB page and changed the headline. Apparently they’ve changed it back and apologized.
This–City employees are going to be asked for greater efficiency and greater productivity. They are also going to be asked for more contribution to their health care.–is what I refer to as the “do more with less mantra, and it literally means that: we-expect-greater-productivity-while-we-lower-your-salaries (because changing the health insurance equation is lowering salaries, and significantly for those who either have, or have families members who have, serious/chronic illnesses.
I understand that the problem is the need to slow the rise of health insurance costs, but I think this particular cost angle should be de-linked from the efficiency angle. From general observations and what I’ve heard of Wilmington in specific, in government bureaucracies much of the wasted time and lost efficiency is generated by middle-level and upper-level management not being willing to give even slightly more autonomy to the actual workers to do their jobs more creatively. Part of this has to do with the well-documented phenomenon that if the workers are taking more responsibility and getting the job done more autonomously, then people start questioning the existence and salaries of that management level instead–and they certainly can’t allow that to happen.
So one way to approach this might be to say that we’re not going to treat all employees the same, that employees at the higher salary levels will be asked to pay more on a sliding scale for health insurance than those at the bottom–say a three-level increment (those who make below $50K; those who make $50-90K; those who make above $120K) with overtime figured into the mix. Then pair this with targeted incentives for whole departments–save so much off your budget or hit certain performance targets and a pool is generated to assist those hit hardest by the insurance increases.
The link of efficiency and health care costs is just how I constructed the sentence to show that at least two things were going on here. I doubt that this is what Purzycki has in mind. If you read her address, it is clear that he knows that the cost of health care to the city is increasing at a very fast rate, that the City is way more generous in absorbing insurance costs and increases than the state is (for instance) and that City workers are not using their insurance for preventative care all that well. So for health care, I would expect that he would look to get workers to take up more of the cost — the monthly contribution as well as copays. He specifically mentioned that the city had a better health care deal than the state. So on the health care front there will be more participation from employees. Which is a effectively a pay cut. I am not a fan of this cost-shifting when my employer does it to me but this is SOP in the private sector. So I’m interested in the reaction of the people who work for the city who were cheerleading this new era of running government like a business to this.
As far as efficiency goes, there are things that he mentioned that are well known as efficiency killers: the WFD shift arrangement, the task-based payment arrangement that some Public Works personnel have ( so that if you finish collecting the trash for your route(s) by noon (that you may have started at 6AM), you are done for the day and paid for 8 hours; and the legendary inability of the WPD to get a minimum daily deployment on the streets. For a variety of reasons. There’s other items too, like not being able to shift a work day for specific tasks — so that if you need to detail an L&I person out to inspect trash and write tickets in the evening, you can’t just ask them to work for a day from noon to 8 pm. They have to be paid overtime for work after 5.
HOWEVER — incentivizing staff at all levels to achieve improved productivity is an excellent idea. This is a thing you could probably start with awarding gift cards to Amazon or for a nice place for dinner for ideas implemented. Ask the staff for some participation in making those changes and work out how to get buy in from entrenched management.
But I think that much of the additional “efficiency” Purzycki is thinking about here comes from union contracts that looks like he wants to look at.