Finance department seeks $20.8M for FY2026; council questions indirect costs, new billing system and collections strategy

The Wilmington Department of Finance presented its FY2026 budget request to the Finance Committee, asking for roughly $20.8 million across the general fund and water/sewer fund. Finance Director Brett Taylor and Deputy Director Lois McLaughlin detailed personnel changes, software and licensing needs, and the city’s collections approach while answering council members’ questions about indirect costs, red‑light camera outages and proposed new technology.

Why it matters: Finance functions — billing, collections, permits and transaction processing — underpin the city’s cash flow and the water/sewer fund’s solvency. Council scrutiny focused on the share of indirect costs allocated to the water/sewer fund, the expected returns from a new billing platform, and whether collections and camera programs are managed to prioritize safety and fairness rather than revenue maximization.

Budget totals and personnel OMB’s presentation listed the department’s combined FY2026 request at about $20.8 million. The general fund portion was presented as slightly over $11 million (a roughly 1.3% increase over FY2025), while the water/sewer fund budget request was shown at about $9.7 million (up about 16.8% from FY2025). Personnel changes include a net increase of about 1.0 full‑time equivalent across funds (positions split between funds), two position upgrades from an HR reorganization, and the creation of a new database manager position split 35% general fund / 65% water/sewer fund. The budget narrative said total payroll changes reflect cost‑of‑living and step increases.

Indirect costs and fund allocation Black & Veatch conducted a new indirect‑cost allocation study that the administration used to reallocate support costs; the finance presentation showed an $827,000 increase in indirect costs charged to the water/sewer fund (a driver of the fund’s year‑to‑year budget change). Taylor and OMB staff said Black & Veatch’s study reexamined how central services (accounting, HR, legal, IT) support utilities and led to adjustments. Council members asked for the firm’s final report and an explanation of how allocations were calculated; Black & Veatch was scheduled to present the water/sewer plan and the indirect‑cost findings in a later briefing.

New billing system and database manager Taylor described a planned launch of a new customer information system, referred to in the hearing as the EnQuesta utility billing platform, with a target July 1 live date and a community outreach campaign planned for May. The new system will host utility billing, property tax and licenses/inspections billing on a database outside the city’s aging Munis instance and will include a customer portal for account history and meter data. City consultants (Black & Veatch) estimated a payback period and ongoing operational gains: improved billing accuracy, fewer corrected bills, and an estimated recurring revenue or savings increase of about $1.5–2.5 million per year from better collections and fewer exceptions; the department said the platform should pay back over roughly 2.5 years. The proposed database manager’s role is quality control, account cleanup and gatekeeping of customer data; Finance said the position’s cost is expected to be offset by improved billing accuracy and higher net collections.

Contracts, collections and operational changes The department explained changes in non‑personnel lines: a reduction in parking citation commissions tied to a new vendor (Passport) that saved about $587,000; an increase in red‑light camera contract costs (2.5% annual adjustment) and concern about camera outages that reduced FY2025 revenues; increases in collections and legal fees tied to sheriff sales and complex commercial collections; and software licensing and maintenance costs tied to the new billing system.

Collections metrics and programs Finance presented a legacy delinquent portfolio of roughly $35 million in accounts older than 90 days; water/sewer delinquencies were said to have fallen from about $28 million to $19 million after stepped‑up collections. The department has engaged external vendors for targeted recovery: Avenue Insights for wage‑tax collection portfolios (roughly $1.3 million in delinquent wage tax balances), skip‑tracing services and outside legal firms for filings and sheriff sales. The department also noted seasonal differences and policy choices — for example, the council had earlier decided to stop including certain water utility delinquencies in sheriff‑sale portfolios, reducing the number of sales and affecting near‑term collection receipts.

Parking, red‑light cameras and safety data Council members asked about the red‑light camera outages that reduced fine revenue in FY2025. Finance said older equipment and intermittent outages tied to power/modem issues and construction had taken cameras offline; the vendor contract allows for credits for equipment downtime but lost violations are not recoverable once the camera has been offline. The administration plans an RFP for a new red‑light program vendor and said it will align camera placement and renewal with DelDOT crash‑data updates (DelDOT supplies crash data annually). Parking citations also fell significantly (from about 45,000 to about 29,000 issued) following parking‑reform changes and higher thresholds for boots/tows; the department said these reforms intentionally reduce reliance on parking enforcement as a recurring revenue source.

Utility assistance and other clarifications Finance confirmed the water utility assistance line — originally funded with federal pandemic and ARPA resources — is planned to continue; an FY2026 figure was in the budget documents at $250,000 but staff said this will be corrected in subsequent budget iterations (third and final) with carryover to reach a target of $350,000. Staff also explained that some software licensing and maintenance costs (including the new billing CIS licenses) are operating costs rather than capital items.

Council follow‑up and next steps Council members requested the Black & Veatch final indirect‑cost report, a breakdown of contract and consultant line items, detail on red‑light camera outages and safety metrics, and a continuing explanation of projected ROI for the new billing system. Finance said it will provide written responses and that Black & Veatch will present the water/sewer and indirect‑cost work in the scheduled April presentation. Several council members emphasized transparency on reassessment and collections and asked for more granular back‑up in follow‑up materials.