WILMINGTON — Meals for Wilmington students in need. A new program that pairs police officers with mental health specialists. Affordable housing projects.
These are some of the Wilmington programs that receive federal funding and could now be at risk if President Donald Trump’s administration continues to target federal grants and loans.
State and local governments have been working against a strong current as the Trump administration announced a sweeping pause on federal aid, casting doubt on the future of such programs municipal governments have relied on for years. Gov. Matt Meyer’s office reported that a funding freeze would impact around $4 billion in Delaware’s budget alone.
In February, the Trump administration rescinded a memo on the funding freeze and federal judges have issued temporary restraining orders blocking the president’s plan. Wilmington officials are already talking about what could be at stake if federal funds were to be slashed.
“There isn’t a lot of consensus or guidance on what’s happening right now, because it’s completely unprecedented,” Mayor John Carney’s Deputy Chief of Staff Stephanie Merkler said.
In briefing the city council’s Finance & Economic Development Committee on Monday night, she added, “It is generally considered to be illegal, and there have been so many conflicting statements, even within the administration itself on what this means.”
Merkler told the committee that there were other threats to the city’s federal funding, such as the Department of Government Efficiency now led by Elon Musk. That department has quickly terminated leases, fired federal government workers, and seized mass amounts of data from the U.S. Treasury.
The federal government layoffs, the deputy chief of staff said, could leave federal departments so bare bones that they could slow down grant reimbursements.
“If there’s nobody there to process the reimbursement or there aren’t enough people, then either our funding could be delayed or we simply wouldn’t get it,” she said.
Wilmington’s federal funds
There is also a risk that obligated funds — or a legal commitment to spend money — could be recouped, though that has not happened under previous presidential administrations. Wilmington has about $9 million in obligated funds from the American Rescue Plan Act. But to date, that funding has not been spent.
Programs and departments that have received federal aid in the past and may be impacted by a potential funding freeze include:
- $3.9 million in the city’s Real Estate & Housing Department, which includes the HOME Investment Partnership Program that incentivizes affordable housing projects.
- $1.3 million for the city’s Child and Adult Care Food Program and the Summer Food Service Program. Without the funding, these programs would be cut.
- $100 million through a no-interest loan that would be forgivable over a period of time for water infrastructure improvements. Without this funding, the city would have to rely on state programs for a no-interest loan that would not forgive the principal payment.
- $86,000 in a split grant with the city’s Office of Emergency Management.
- $400,000 for the Wilmington Police Department, which includes funding for at least one social worker in the Partners in Care program. That program pairs social workers with officers to assist on calls relating to mental health or homelessness.
Wilmington’s Real Estate and Housing Department could see the biggest impact from a federal funding freeze as administering federal funds across a large range of programs engulfs a large part of the department’s functions.
If the federal funding stopped entirely, Wilmington Real Estate and Housing Department Director Bob Weir said the office would be kept on a skeleton crew to meet inspection requirements, greatly reducing staffing in the meantime.
Contingency planning
None of these programs have seen funds rescinded, Merkler stressed. But the overview was so that city officials understood what the financial blow could be if it becomes reality.
“The food programs [we have] are a great example of community-based spending that we do with federal funds,” she said. “If this funding went away, how much of that would we want to pick up in the general fund and how much we could afford are the biggest questions.”
Carney seems to be preparing his first city budget with the same fiscal conservatism he has wielded in the past.
In eight years as governor, Carney implemented a series of financial controls, such as the budget stabilization fund, a benchmark appropriation calculated by the state’s independent economic experts.
Wilmington’s code requires the budget be balanced — meaning that expenditures cannot exceed revenues. The city also maintains a so-called Rainy Day Fund as well as an Operation and Maintenance Reserve.
“The potential for a federal funding freeze is a challenge,” Carney said in a prepared statement to the Delaware Business Times. “While our budget reserve fund balance is healthy, it cannot bear the brunt of a funding freeze. Our budget proposal will be conservative to acknowledge the reality we face on the ground.”
