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Wilmington officials review $42.1 million HR budget as insurance and benefits costs rise
Summary
City staff told the Finance Committee on May 4 that the Human Resources Department’s FY2027 proposed budget totals $42.1 million and reflects rising self-insurance and health-care costs, investments in training and an ERP rollout, and plans to manage projected multi-year budget gaps through attrition and targeted reallocations.
Wilmington City officials presented the Human Resources Department’s FY2027 proposed budget to the Finance Committee on May 4, detailing a $42.1 million request that staff said is driven largely by self-insurance and health-care cost increases.
"This evening, I will present the Human Resources Department FY2027 proposed budget on behalf of the Office of Management and Budget," OMB fiscal analyst Mr. Jones told the committee. He said the department’s funding comes from the general fund and three self-insurance funds — risk management, workers’ compensation and health and welfare — and noted the total includes roughly $3.8 million for personal services and about $30.3 million for self-insurance costs.
The presentation and follow-up questioning focused on several pressures shaping the request: projected increases in medical, dental and prescription costs, higher reserves for several large general-liability cases, and growing stop-loss and cyber insurance premiums. Mr. Jones told the committee the health and welfare fund was proposed at $26.3 million, an increase of roughly $1.8 million, and that risk management costs are proposed at $6.6 million, up about 17 percent.
"Self insurance cost increased by $1,750,000 following the latest review of claims expenses," Jones said in his slide presentation.
HR Director Claire Dematis emphasized workforce and operational priorities tied to the budget. "Our key priorities... are to streamline talent acquisition, preboarding, and onboarding," she said, and listed three top goals: (1) negotiate five collective bargaining agreements that expire June 30, (2) select and implement a new enterprise resource planning platform for HR, and (3) reach 80 percent adoption of the Cornerstone learning and performance system among city employees.
Committee members pressed staff about how the administration plans to close projected gaps in FY2027–FY2030. Dematis said the approach is to prioritize strategic reductions and reallocations and to use attrition and position repurposing where appropriate rather than layoffs. "The goal is really to address that potential gap by prioritizing strategic reductions and reallocations within the department," she said.
Members also raised operational details: the vacancy report (reported internally at 96 vacancies), the residency requirement (23 vacancies are subject to residency), and low participation in the tuition reimbursement program (two employees in FY25 and two year-to-date in FY26). Dematis described an automated personnel-requisition workflow that she said reduced processing from weeks to days and outlined plans for a centralized workforce dashboard and targeted recruitment and retention strategies.
The committee examined technology and training investments tied to the budget: staff are replacing Kronos with the UKG Ready time and attendance platform (all departments except Fire will use UKG), and the Cornerstone platform rollout has a proposed allocation of approximately $167,000 within a $203,000 training line item. Dematis said the UKG rollout will include vendor-led training sessions, SharePoint-hosted recordings and guides, and quarterly reinforcement for new employees.
Committee members sought more detail on insurance-case reserves and legal defense spending. Staff attributed most of the year-over-year insurance increases to case-reserve adjustments for five large general-liability cases and a request from the law department for added legal-defense funding for ongoing matters.
The committee did not vote on the budget at the hearing. Chair Michelle Harley reminded attendees that council will hold a budget review on May 18 and the Council will consider the budget ordinance at the May 21 council meeting, and asked staff to provide follow-ups to Miss Bass Knight.
The hearing generated requests for follow-up data (sanitation turnover and wage figures, vacancy-by-department residency counts, and additional breakdowns on insurance reserves) that staff committed to provide to the committee.
