Saturday, January 22, 2022

Wilmington City Council debates ARP funds, rejects plan to boost staff bonuses

Wilmington City Council opted out of plans to increase bonuses for staff.

WILMINGTON –– Wilmington City Council shut down plans drawn up by staff to dip further into its allocated American Rescue Plan Act (ARPA) funds for the purpose of increasing planned bonuses for city employees.

After reviewing tiered rewards for its staff earlier in the month, the council asked the finance department to bring forth additional options to boost the bonuses of employees who were granted smaller amounts. But at Monday’s meeting, the majority of council members determined they would rather conserve the money for residents in need of rental or utility assistance.

This consensus triggered the frustration of councilman Kevin Spears, who pushed to give all employees an equal bonus, including department heads and council members.

“If the city has to spend $400 or $500,000 for our organization, to make our people feel more secure in their jobs, so what?” Spears said during the agenda briefing.

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On Aug. 3, council voted unanimously to award $700 payouts to 156 employees ineligible for bonuses from ARPA funds. The city is planning a range of bonuses, depending on the extent employees put themselves at risk of contracting Covid-19 when fulfilling their duties. The federal guidance states the funds should be used to support staff at the greatest risks, finance director Jennifer Maready explained.

Under the city’s plan, staff who interact daily with the public are deemed “tier one” employees and are receiving $2,800 one-time payments. Employees with less contact, identified as “tier two,” will receive $1,400 bonuses.

The $2.45 million to cover the bonuses comes from the city’s $25.93 million ARPA allocation. Wilmington accepted its first half of the payment earlier this summer and is expecting the second deposit in May or June 2022.

A third tier of employees, who were able to work from home pre-vaccine and can avoid face-to-face interactions, were approved for $700 bonuses on Aug 3. The $122,000 investment for tier three is coming from city funds rather than the ARPA allocation, which is supposed to be reserved for pandemic-related costs.

Monday, finance director Maready returned before council with two scenarios to further reward tier two and three staff:

The City of Wilmington’s finance director presented a plan to give all employees a $2,800 bonus, regardless of whether their duties put them at high risk of catching Covid-19.

The first option would have given all employees an equal $2,800 benefit, as Spears suggested. It pulled an additional $147,000 from ARPA funds to cover tier two’s bonuses and $353,300 from the city’s fund to pay tier three’s bonuses.

For an additional $71,700, council could reward executive staff, including department heads and managers. Bonuses for council would cost an extra $21,105.

City staff presented a second option to increase bonuses of employees.

The second scenario would use $147,000 in ARPA funds to increase tier two’s bonuses from $1,400 to $2,800, and use $117,800 in city funds to raise tier three’s bonuses from $700 to $1,400. Council could also dip into city funds to reward themselves and executive staff with $1,400 each, at an additional cost of $35,900.

To increase the bonuses, the city would either need to adjust its current strategy for spending the ARPA money or reduce the $1.7-million reserve that was set aside for future pandemic-related needs.

The city funding would come from its general fund. Maready mentioned the city’s policy is to maintain a general fund between 20% and 30% of its operating budget; the account was reduced to 30% at the start of fiscal year 2022 when council allocated excess money to other initiatives, such as affordable housing. Maready indicated she is hoping the city makes it through September without a hurricane, to avoid diving into the general fund for aid.

Following her PowerPoint, council discussed who should and shouldn’t receive bonuses, with Mayor Pro-tem Margaret Haynes quickly suggesting council should be taken out of the running. Spears questioned why council and executive staff were not included in the first place. He said he thought it was a “simple thing” to bring everyone up to the same amount.

“I want to say congratulations to whoever created this ball of confusion. I wish you could see me so you can see the look of disgust on my face right now,” said Spears, who tuned into the meeting virtually.

Maready explained the U.S. Treasury’s guidance for spending the ARPA funds prioritizes lower-paying jobs over higher-paying ones, which is why the executive staff was excluded from the original plan for bonuses.

Councilmember Charlie Rivenbark grilled Maready about which tier specific front-desk workers were in. Maready confirmed human resources manages a list of the employees and their tiers, but suggested the employees in question were either tier two or three, based on the level of control they had over social distancing.

“Well, when they’re open to the public, they don’t have any control,” Rivenbark said.

“Yes sir, we’ll get that information to you. You can see the list of where everybody’s at,” Maready said.

“Well, that didn’t answer my question, but I’ll wait for your list,” Rivenbark said.

“And also Hurricane Hazel hit in October. K?” he continued, in reference to Maready’s statement about hurricanes occurring in September.

Council members were vocally confused about the potential plans to raise bonuses that Maready presented. As she re-explained, Neil Anderson interrupted: “Stop, stop,” before asking for clarification.

Anderson expressed concern about spending ARPA funds on bonuses rather than saving them for residents who are struggling financially.

“So you feel like we’ve maxed out helping our citizens who can’t pay their water bill?” Anderson said. “Who can’t pay their sewer bill? Who can’t pay rent? Who are about to get thrown out on the street? We’ve maxed it. We can’t –– we’ve met the need?”

Maready acknowledged a greater need still exists. She explained she was asking council if it was comfortable with altering its plans for allocation–– which includes $500,000 toward utility assistance and $3.75 million toward housing initiatives –– or reducing the $1.76-million reserve. Haynes said she would like to keep the reservoir as is, especially as Covid-19 cases climb.

Mayor Bill Saffo pointed out no city employee lost their job as a result of Covid, and agreed with Anderson’s sentiment to prioritize keeping resident’s lights and water on over staff bonuses.

After Gov. Roy Cooper’s moratorium on utility shut-offs expired in July, the Cape Fear Public Utility Authority continued its pause on disconnections through September. The authority –– which is shifting from bimonthly to monthly billing –– is now looking at $2.5 million in delinquent accounts and is requesting $500,000 from the city and $500,000 from New Hanover County to launch an assistance program for low-income customers.

“We also have a responsibility to the people that are falling through the cracks, and to try to help those folks, first,” Saffo said.

Spears accused the mayor of presenting an “unfair contrast.”

“I’m not saying that we should give bonuses instead of helping people to stay in their home or to keep their water connected,” Spears said. “That’s unfair. That’s a total mixing of what I was trying to do here, and I think it’s crap, to be honest.”

The majority of council agreed it was too early to spend money allocated to the reserve, especially with the end of the pandemic no longer seemingly in sight.

“However I feel about it, the majority will vote the way that they want to go,” Spears said, “and that’ll be fine, but the public will be able to see and differentiate who was trying to do what and why.”

The city’s current spending strategy for the ARPA funds is broken into three categories. As of Monday, the plan is as follows:

Economic and community assistance, $9M

  • $2 million contribution to a $4.5-million business assistance grant program with New Hanover County and the Wilmington Chamber of Commerce
  • $500,000 to directly assist local nonprofits
  • $400,000 for job training and placement as well as $100,000 for a small business entrepreneurial program to help residents who lost their jobs during the pandemic
  • $750,000 to market Wilmington as a tourism destination and revive the industry
  • $3.5 million for housing assistance and $250,000 for affordable housing preservation
  • $500,000 for the utility assistance program CFPUA is requesting
  • $100,000 to tackle an uptick in substance abuse since the onset of the pandemic
  • $200,000 for a community arts program
  • $200,000 to identity food deserts in the Wilmington area and search for collaborative solutions
  • $500,000 to fund the community kitchen project at the Martin Luther King Center

City and community infrastructure, $4.67 million

  • $500,000 for a study to find out what’s causing chronic cracking in the Northside pool
  • $1.42 million for city hall HVAC
  • $2.5 million for technology upgrades to narrow the digital divide
  • $250,000 to address stormwater on 10th and Grace streets

City continued response and recovery, $12.26 million

  • $5.6 million to make up for a loss of convention center and parking revenue
  • $2 million to improve the convention center’s outdoor pavilion
  • $250,000 for cleaning, personal protective equipment and technology purchases for remote work
  • $2.5 million to award employees bonuses
  • $150,000 for keeping track of the administration of the ARP funds
  • $1.7 million kept in a reserve for future needs

Send tips and comments to alexandria@localdailymedia.com

Alexandria Sands Williams
Alexandria Sands Williams is a journalist covering the City of Wilmington, education and film. Before Port City Daily, she spent a year in the quaint city of Southport reporting for the award-winning State Port Pilot. Prior to that, she wrote for several Charlotte publications while studying at UNC Charlotte. When not writing, Williams is most likely in the gym, reading or spending time with her Golden Pyrenees. Reach her at alexandria@localdailymedia.com or on Twitter @alexsands_

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