Saturday, February 15, 2025

City council budget musters past first reading, questions remain on several line items

Council voted 4-3 on Tuesday to advance the plan for general fund allocations to a second reading, with council members Luke Waddell, Kevin Spears and David Joyner dissenting. (Port City Daily/Amy Passaretti)

WILMINGTON — Several council members were not happy with the current state of the City of Wilmington budget at Tuesday’s meeting, though it still passed first reading. 

READ MORE: ​​Wilmington proposed budget: 7% property tax increase, motor vehicle tax hike

Council voted 4-3 to advance the plan for general fund allocations to a second reading, with council members Luke Waddell, Kevin Spears and David Joyner dissenting. The budget includes the discussed 2.75-cent property-tax increase to cover the city’s backlog of capital projects and institute raises for staff.

Waddell and Joyner also voted against the appropriation plan for the city’s other funds (aside from capital), mainly due to the city’s continued operation of the Safelight program. It  civil fines for running red lights captured on intersection cameras. 

The capital improvement plan, fee schedule and limited obligation bonds passed unanimously. This includes the increase of the proposed motor vehicle tax from $15 to $25, a $20 increase from the current rate.

All items will be brought back for second reading at the council’s June 18 meeting. 

The turn against the budget began before council’s meeting when Joyner released a statement announcing he would vote against the proposal, citing the tax increase. He said the public was told purchasing the $68-million Skyline Center last July would not require an increase lodged against taxpayers.

“I cannot vote for this budget and thereby absolve the previous city council of the purchase of the Skyline Center, which had virtually no buy-in from the public,” Joyner said. 

The tax increase, which will generate over $6 million in additional revenue, will not be directly applied to debt service on the Skyline Center. City staff said they always anticipated a tax increase when it updated its capital improvement plan this year. Small maintenance projects, which have been shuffled to the back of the line over the years, will be dedicated 1 cent of the increase. Larger projects will be financed with 80% debt service. 

However, the city shifted 1.12 cents of its current 39.5 cent tax rate to pay for debt service last year. It also paid $8.5 million out of its general fund and financed the remaining with low-obligation bonds. As a result, the city has limited available capacity in the debt service fund, meaning it’s limited in its ability to invest in projects without a tax increase.

Though it appears most of council has come around to the tax increase, maybe none have done so more than Mayor Bill Saffo. He gave a passionate speech about the need for more funding.

“This city was incorporated in 1739, it’s one of the oldest cities in America; we’ve got a lot of aging infrastructure,” Saffo said. 

The mayor pointed to the influx of workers that commute from the west and north of Wilmington, around 50,000 people that don’t live in Wilmington city limits, he said. He also pinpointed visitors to New Hanover County beaches that drive through Wilmington. Both groups, he said, don’t contribute dollars to city infrastructure — aside from a portion of the city’s parking fees and fuel purchases. 

“It’s frustrating when you can’t, when you have to tell a citizen, ‘We’ll get to you in three years,’ based on the condition of the roads,” Saffo said. 

Saffo also pointed out the city has suffered from the loss of staff, thus making raises necessary to keep the City of Wilmington on par with other employers. City manager Tony Caudle told council there have been anecdotal reports of employees leaving for jobs with a $1 or $2-dollar raise, though Spears expressed adamant disagreement with that information.

And though the city’s sales tax revenue is expected to increase, Saffo said county commissioners are charged with distributing it. If they distribute based on population, Saffo said the city would get 50% of proceeds, but the county calculates based on ad valorem taxes, which gives them 80% of proceeds. 

“It puts [them] at an unfair advantage,” Saffo said. “Plus, they get 60% of the property taxes. We get 40%. So we have very limited options as to how we can collect revenue to help sustain and maintain the city.” 

Additionally, any increase in sales tax over the next year won’t hit the books for 10 months. 

Waddell and Spears’ qualms with the budget revolved around council not being on the same page and some having unanswered questions. Spears suggested the council schedule another work session instead of making “hasty decisions.”

“We’re doing it in a vacuum, things that we’ve already requested haven’t even been done,” Spears said. 

One Waddell took issue with was the proposed increase in motor vehicle taxes from $5 to $25 over several years. This is a higher amount from the proposed increase to $15 discussed at the council’s last meeting. Several council members indicated support for increasing the tax at the May 24 budget work session, including Waddell, Salette Andrews and Clifford Barnett.

At Tuesday’s meeting, Waddell said he didn’t think council had consensus on what the $1.8 million in additional funds should be used for. Right now, the plan is to dedicate $20 to a neighborhood traffic-calming initiative, to also include hiring two staff members to oversee it. The program would be targeted in areas where police officers often don’t monitor speed due to staffing. 

“I think the neighborhood traffic-calming program is a worthwhile endeavor, and I would support it in the future, when we’re not looking at a 7% tax increase,” Waddell said. “But to me, the more important items at the moment are the capital improvements because there are many.” 

Waddell and Joyner also questioned the Safelight program, aimed at reducing T-bone collisions at red lights. It was implemented in 2020, however, all other North Carolina cities that have used the program no longer do so. 

The city loses $230,000 on the program annually, the county a similar amount, as the revenue mostly goes toward New Hanover County Schools. Studies done by city staff and data from the Wilmington Police Department shows the program does little to improve safety at red-light intersections. However, the WPD has reported using the camera footage to solve other crimes, though Waddell and Joyner suggested the city could implement its own infrastructure. 

City staff believe Wilmington will lose more money if it cancels the Safelight lease — one of the last cities to use the program statewide — before it ends in 2025. However, if both parties agree to terminate, a penalty might not be imposed; Waddell and Joyner requested staff explore that option.

“I’m not comfortable at all with us having a civil penalty program where we are mailing people bills, which we all know the likelihood of being collected on, and then justifying that as a means to have surveillance in the city,” Joyner said. 

Spears supported the program, claiming the program “saves lives” and that $230,000 for even the smallest of benefits is “nothing” for the city. He also called out Joyner for campaigning on public safety — Joyner is an assistant district attorney, sworn in last December — but not supporting Safelight.

Waddell proposed a few other money-saving measures at the May 24 workshop, including the elimination of the city’s diversity, equity and inclusion department and its two employees, shoring up $263,000 he proposed diverting to police and fire. The city just hired a new DEI director, Kimberly Carson.

The council member also proposed removing the council contingency fund, worth $250,000 and  the 1-cent of the property tax rate dedicated to affordable housing, citing the surplus of $6.4 million for projects. City staff informed the council it had several large projects in the pipeline that could use the money. 

None of these proposals saw traction at Tuesday’s meeting.

The budget will return for ratification in two weeks; in the meantime, minor revisions may be made at the behest of council. The budget must be approved by the end of the month.


Tips or comments? Email journalist Brenna Flanagan at brenna@localdailymedia.com.

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