Delaware State News
DOVER — Recent financial turmoil hasn’t put a crimp in the city government’s operations — yet.
"We’re monitoring our revenues. Right now we’re stable," City Finance Director Donna Mitchell said. "Somewhere in the next few months we’ll probably see effects of the current events."
If sales of clothing, appliances and other consumer goods remain dismal, stores could close and potential businesses might never open. That would reduce the city’s income from business licenses.
The loss of jobs could further undermine home sales, cutting into the city’s take from Delaware’s real-estate-transfer tax. Falling home prices could lead to lower property assessments, undermining the city’s tax base.
While those scenarios may yet be avoided, the city already has taken a pounding in one vital area of its long-term investments: its pension funds. Unlike most of the city’s money, which is placed in accounts with relatively steady yields, millions of dollars put aside for city workers’ retirements are in the stock market, which was floundering even before prices began plunging daily in recent weeks.
By late September, Ms. Mitchell said, Dover’s pension funds, currently $30 million, were down 10.7 percent from the beginning of the year. Stock prices have fallen further this month.
A continued stock market slump eventually could force the city to set aside a bigger portion of its tax dollars to pay pensioners, putting pressure on other aspects of the budget, Ms. Mitchell said.
She is scheduled to present an overview of Dover’s finances when City Council meets today at 7:30 p.m. at City Hall. The session is open to the public.
"I look forward to seeing this report," Mayor Carleton E. Carey Sr. said. "Right now, we’re doing OK."
At least one council member foresees difficult decisions in the months leading up to passage of a budget for the fiscal year that will begin next July.
"I think we’re going to have to see budget tightening like we’ve never seen before," Councilman William P. McGlumphy said. "I think our revenue is going to be strapped."
