WILMINGTON — The Wilmington City Council took up several financial items of note at its Tuesday meeting, including signing off a proposal to issue $25 million in new debt, though more public scrutiny was dedicated to a potential reallocation of $140,300.
But before the council took up its action agenda, it reviewed a consent agenda item awarding a $2.45-million construction contract to Saffo Contractors for the Front Street Bridge rehab. Mayor Bill Saffo, brother to owner of the contracting company, recused himself from council’s deliberation and vote.
“Although I will not derive any benefit from awarding this contract and do not have any personal financial interest in Saffo Contractors Incorporated, the company is owned by a member of my family,” Saffo said. “So in order to prevent any appearance of impropriety, I will make a motion to recuse myself.”
State law prohibits a public officer or their spouse from deriving a direct benefit from any contract with the governing body they are part of; direct benefit is defined as owning 10% interest in the company that is a party to the contract, deriving any income or commission directly from the contract, or acquiring property under the contract. The public official is prohibited from voting and deliberating on the matter or influencing the decision in any way.
The rehab project includes a full deck replacement and substructure, along with repairs and painting of its steel structure. The contractors also will implement a new three-bar metal rail system in accordance with North Carolina Department of Transportation standards. The work should extend the life of the bridge by approximately 25 years.
After the mayor exited the chambers, council member Salette Andrews asked staff to explain the history of the project’s bidding.
City Attorney Meredith Everhart detailed the project had been put out to bid twice; the first time around, three bids were received, but the lowest wasn’t qualified to handle the project under NCDOT standards. The other two bids were “significantly” over the project’s budget, Everhart said.
The second round of bidding brought in another three bids: Florida-based company Southern Road and Bridge put in $3.74 million, Saffo Contractors put in $2.4 million
Paragon Building Corporation came in at $2.28 million. However, Paragon withdrew their bid; Everhart didn’t provide why.
Saffo Contractors was selected as the next lowest bidder. Under North Carolina law, any local government must award the contract to the “lowest, responsive, responsible bidder.”
The contract ultimately received unanimous approval, absent Mayor Saffo.
$75 million on the table
Council also approved several debt-related items culminating in a resolution to issue and refinance $75 million, consisting mostly of old debt but some new. A public hearing for it will be scheduled for March 24, before the debt is submitted to the Local Government Commission for sign-off.
The debt will be issued as limited obligation bonds, which are not based on the city’s ability to raise taxes to support its general fund. Thus, the bonds will not need to be put to a public vote via referendum.
Of the total, only $25 million is new debt. It will cover the acquisition, construction, and equipping of a new park maintenance complex, radio communication equipment for various city departments, various sidewalk, accessibility, and streetscape work, and Water Street Park improvements.
The remaining $50 million will be refinancing debt series issued by the city in 2015, to save roughly $340,000, and in 2016, to save around $1.4 million.
In addition to the $75-million resolution, the finance department is looking to refinance a stormwater fee revenue bond issued in 2015, not to exceed $15 million. Savings will equate to about $750,000, the city estimates. No new debt will be issued and because this debt is through revenue bonds — based on specific revenue generated through stormwater fees — no public hearing is needed for this smaller debt refund.
The proposals passed council unanimously.
ARPA funding reallocation causes stir
The matter taking up the majority of council time at Tuesday night’s meeting, however, was a staff proposal to reallocate $140,300 in American Rescue Plan Act funds to cover increased construction costs for William Booth Drive.
The road was constructed leading to the new Salvation Army shelter, with the city reimbursing the nonprofit $1.3 million for the road. The project was completed at $1.46 million due to “increased construction costs.”
However, one city council member took issue with where the money was rerouted. The proposal is to move the funds from the DigitalBridge program, a program to connect residents with higher-paying tech jobs and business owners with those skilled employees.
As reported by WHQR, the Wilmington City Council unanimously allocated $2.5 million to the effort in August 2022. StepUp Wilmington, a nonprofit employment service, was brought on as a partner, along with Cape Fear Collective and The Wireless Research Center of North Carolina. However, the latter two entities are no longer partners, per council’s conversation Tuesday, and at some point, Steigler EdTech became attached to the initiative.
“Had I not read this, I would have not known, I just kind of thought we were reallocating funds, surplus funds that were laying around — this money has been set aside for us to do something useful within this community, as we created a jobs training program and to gainfully employ people,” Mayor Pro Tem Kevin Spears said Tuesday. “So I feel a way about it, just to be honest, and I feel that there’s a lack of transparency that took place as it comes to this.”
According to Finance Director Martha Wayne, the leftover money is a result of the two partners being unable to spend it due to lack of interest in the program.
“They were having a difficult time getting people to attend the cohorts, and so they were not able to essentially spend all the funds by the required deadline,” Wayne said, noting the deadline to spend all ARPA funds in Dec. 31, 2026.
Spears said he was unaware of the problems with the program and questioned how long it was “dead in the water,” along with the number of participants; staff didn’t have the answer and Wayne explained they were only notified in December of the amount of leftover funds. She didn’t specify how long staff knew about the program’s struggles.
“Maybe this wasn’t the group that should have been doing it; maybe it should have somebody else,” Saffo said. “I have no idea, but I’d like to at least hear from somebody, or just get a report to tell us why that program didn’t take off because we thought it had a lot of merit.”
City Manager Becky Hawke said she would have staff bring back a report on the program and invite members of StepUp and Steigler EdTech to be part of the discussion, per council’s request.
Council member Cassidy Santaguida questioned how the Salvation Army would be repaid should the council decide against the proposed reallocation and if there were other project surpluses to pull from. Wayne explained that surplus ARPA funds can only be transferred to other ARPA projects that have yet to be completed; staff agreed to also provide council with a list of ARPA projects still with an open status.
Spears motioned to continue the item to the next council meeting, which received unanimous approval.
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