Mayor Response to City Council Declining 18-month Act 47 Extension

This week New Castle City Council unanimously decided not to accept the generous 18-month extension offered under Act 47, as a result of the COVID-19 Pandemic. Most residents will hear this news and gloss over it as just another routine story about city government. I want our citizens to appreciate the gravity of this decision and what it means to the residents, taxpayers and business owners of New Castle.

The purpose of Act 47 is to help municipalities, like New Castle, that are financially distressed from years of poor planning and lack of fiscal responsibility or just economic downturns in the area. Myself and the 3 other city members elected in November promised fiscal responsibility and a plan to exit Act 47 when we ran for office. While it was our promise it is now our responsibility and I have not abandoned my promise.

My administration got off to a good start this year and we had hopes that we would save hundreds of thousands of dollars through restructuring in certain departments and with a freeze on hiring. Unfortunately, the COVID-19 pandemic interrupted my plans and presented new, unforeseen challenges. Nevertheless, my administration took steps to drastically minimize the damage of the pandemic. We furloughed employees and cut wherever we could to save money. Our planning was so creative that some of our Act 47 team used us as an example when working with other communities. All we needed to do was stay the course and get a little help from the state and federal government and we would be back on track.

That help has arrived through the opportunity of extending the City’s status in Act 47 for an additional 18 months. In order for that to be possible we were told the Mayor and City Council would need to agree. And I looked at the possibility as a way to keep our promise to the residents of the City and continue to work our way out of our financially distressed status. However, based on their decision not to seek the extension, it appears Council has given up and waived the white flag.

You might ask, what did this decision mean to you as a taxpayer or business owner. This extension would have made the City eligible for $300,000.00 in free administrative operating funds to help with the loss of tax revenue and $500,000.00 in capital to repair roads and address blight throughout the community. Additionally, the City would have continued to receive preferential consideration for funding via grant-based programs. Perhaps the biggest loss to the City taxpayers is that they will be denied an extra 18 months of revenue from the commuter tax imposed on nonresidents that work in the City. That tax brings in $2,630,000.00 every year to the City to help pay for things like fire and police services, patching potholes, and paving streets.

City Council’s decision will result in a tax cut for those living outside the City and that burden will shift to the City taxpayers and businesses. City council has criticized me repeatedly for spending $8,000.00 on new technology, office supplies and for other small purchases that they deemed unnecessary. Their criticism led them to pass an ordinance to restrict my ability to make purchases over $1,500.00 without their approval. While financial accountability is necessary in positions such as mine, I believe it is also responsible in there’s and I do not see this as a fiscally sound decision. Council complained about minimal expenditures, for which funds had already been allotted, but is willing to pass up on the opportunity to bring in millions of dollars to the City….millions of dollars. This decision will hurt everyone, and especially those in the City whom we all were elected to serve.

Every day I hear from residents and businesses that struggle to make ends meet. Those on fixed incomes struggle to pay for the required new garbage bag stickers and businesses owners trying to keep their doors open need help. They need their elected officials to step up and lead. I believe that Council is letting their political feelings about me cloud their judgment and our collective dysfunction could push the City into receivership.

Our residents, taxpayers, and business owners are owed an explanation as to why millions of dollars in revenue are being passed up and why that additional financial burden is being placed on them.

With Regard,
Chris Frye
Mayor

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