News

May 23, 2003

Several proposals to enhance Wilmington city government's ability to generate additional revenue will be presented to Governor Ruth Ann Minner by her end-of-May deadline, but members of the taskforce she established to come up with them are agreed that their job is far from finished.

While recognizing that political reality exposes those short-term ideas to an uncertain fate in the General Assembly, the panel's final report -- which is due in Dover by May 30 -- will propose that it or some other group investigate the possibilities inherent in longer-range and more esoteric revenue sources.

"It's not just a $5 million or $10 million deficit that we're trying to fix," said taskforce co-chairman Scott Green. "We can come up with some short-term [proposals], but it's a bigger picture than that."

With the Assembly about to enter the final month of its present session, there is general agreement on the taskforce and among political observers that getting a package of significant revenue measures to aid the city enacted, in addition to legislation dealing with the state's financial situation, is at best an iffy proposition. Miner has pledged support, but lawmakers face the prospect of opposition from both suburban constituents -- who, at best, have a nine-to-five business-day relationship with the city -- and their downstate colleagues.

While there is considerable agreement with the idea that Wilmington is preeminent in several capacities, Mayor James Baker acknowledged that "a lot of people misunderstand the operation of the city." Citing reductions in the city workforce and the sale of assets such as the Port of Wilmington, he told the taskforce that "we've used all kinds of methodology to solve [our] problems."

However, the added, the financial problem "is cumulative [and] will keep getting bigger and bigger and bigger."

Ideas the taskforce sees as best deferred to a later, but not too distant, day include such things as giving the city greater latitude in annexing adjacent properties, state-supported upgrading and

repairing city infrastructure to attract economic redevelopment, authorizing a tax-paying gambling venue in the city, and other forms of state-city revenue sharing.

"Don't think we can, in five weeks, completely solve structural problems that have been growing for 50 years," state Senator Harris McDowell told what was scheduled to be the taskforce's final meeting -- at least for its first round of deliberation.

Co-chairman Fred Sears prefaced that session on May 23 by explaining that the taskforce's charge is to make recommendations to the governor. "It'll be up to her to decide what she wants to pass on [to the legislature]," he said.

It was obvious from discussion which followed, however, that there remains a wide divergence of opinion on the 24-member panel. There had been some softening of  language in arriving at a next-to-final draft of the taskforce's report to avoid offending sensitivities. But there also was strong sentiment against compromising to a point where firmly held points become lost in generalizations.

City Councilman Michael Hare, for instance, argued against backing off from the proposition that Wilmington is entitled to a return on its investment in city-owned Hoopes Reservoir, especially since that facility is being viewed as the primary reserve of potable water for northern New Castle County in the event of severe future droughts.

Revenue proposals

These are the ideas likely to be presented as ways to increase Wilmington's revenue and their estimated annual return:

h  Charge for 'hosting' the Cherry Island Marsh landfill -- $2 million to $5 million

h  Surcharge for storing a reserve water supply in Hoopes Reservoir coupled with increases in rates for city-supplied water -- to be determined

h  Increase the amount paid to the city by Wilmington Parking Authority in lieu of property taxes -- $50,000 to $185,000

h  A 2% local surcharge on the state lodging tax -- $450,000

h  Adding revenue from natural gas to that from electricity in determining the city's utility tax on Conectiv Power -- $425,000

h  Tax on admissions to public recreational events -- $400,000 to $500,000

h  Add an additional two percentage points to the state-proposed 17% increase in incorporation taxes and fees -- $7 million (preliminary estimate)

SOURCE: Taskforce draft report 5/23/0

That, he said, is a fundamental point and the only one on which members of the subcommittee on city infrastructure which he chaired were in unanimous agreement. "It's something you want to make sure gets to the front of the plate," Hare said.

Lieutenant Governor John Carney agreed that "there is a value to everyone relying on Hoopes," and Peter Ross, who represents the Delaware Economic & Financial Advisory Council on the taskforce, referred to the reservoir and the dam that creates it as "city assets on which the city is not receiving adequate compensation."

McDowell objected to another asset-related proposal -- to be paid for 'hosting' the Delaware Solid Waste Authority's landfill in what used to be Cherry Island Marsh -- on the grounds that it could be interpreted as signaling city approval of controversial pending plans to expand the landfill. Hare said that, even if the expansion does not occur, present environmental permits give the landfill about five more years at the present rate of waste disposal.

James Horty, who heads and accounting firm, said that the city's best bet in the way of self-help lies in the availability of property with redevelopment potential. A combination of state investment in infrastructure and incentives to would-be developers would make both commercial and residential ventures attractive. In the long run, he said, that would be cheaper, more efficient and more in keeping with the governor's 'Livable Delaware' program than building anew on undev4loped land.

"If Wilmington is given the same opportunities everybody else has, it's viable," he said.

Baker told the taskforce that its mission is to establish permanent long-term revenue sources, not just solve an immediate budget shortfall. "We need a large source of funds that will grow," he said.

He said he is "generally satisfied" with the recommendations the taskforce is considering, but indicated that the present effort to come up with a solution to what he terms 'structural problems' in the city's revenue-generating ability is the only attempt he will make. "If we don't [get] it now, some other mayor will back [with the same request] in a few years," he said.

"If we're at all smart, we will save this great city and not play games with it," he said.

In an aside, Baker said he favorite among the recommendations was to piggyback on state incorporation taxes and fees. The task force is advocating that Minner's proposal to increase them by 17% be expanded to 19% with the additional revnue going to the city.

New Castle County Executive Thomas Gordon said that his administration continues to support the city, citing the county government's assumption of responsibility for building, staffing and supplying a new West Side library. Coming soon, he said, will be a county effort to help the city fire department "get into the ambulance business."  He also referred to a venture involving police, without giving any details.

In a different context, Baker noted increased pressure to enlarge the city police force. "Everybody said I should hire more police, but how in the hell am I going to do it" without the financial resources to pay additional officers.

2003. All rights reserved.

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