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Wilmington Asks Court to Rule on Treasurer’s Authority, to Prohibit Treasurer from Making Unauthorized Payments and to Direct Treasurer to Cooperate with Administration and Council on Matters Related

Post Date:08/28/2019 4:00 PM

City says neither the charter nor the code gives the Treasurer unilateral authority to act contrary to executive and legislative branch directivesNews from Mayor Mike Purzycki

After careful consideration, the City of Wilmington today filed a lawsuit in the Delaware Court of Chancery seeking the Court’s intervention and assistance to compel City Treasurer Velda Jones-Potter to, in essence, cooperate with the City Administration and City Council on matters related to City finances, and to define the role and authority of the Treasurer in City government.  In filing the lawsuit, the City hopes to bring to an end the unnecessary disruption to the efficient running of City government caused by Treasurer Jones-Potter’s refusal to work collaboratively with other members of City government as required of her position, her refusal to perform the ministerial duties of her office, and her engagement in a course of conduct beyond the legal authority of the Treasurer’s Office.  

The legal filing, among other things, asks the Court to prohibit the Treasurer from making certain payments that are unauthorized and contrary to the Mayor’s instructions and to find that the Treasurer’s withholding of other payments that are due and have been authorized is improper.  The lawsuit details recent actions by Treasurer Jones-Potter which greatly exceed her authority and threaten fiscal harm to the City, including:

  • Unilaterally “scheduling” a $1.2 million payment from the City’s general fund to JP Morgan Chase related to a Wilmington Housing Partnership Corporation loan.  The payment is not authorized by the Mayor or City Council;
  • Unilaterally making several interest payments on the Wilmington Housing Partnership Corporation loan in direct contravention to the Mayor’s order and without consulting the Mayor and members of the City Administration prior to payment;
  • Refusing to participate with other members of the City Administration in negotiating terms for a bond anticipation note to be used to pay the balance of the Wilmington Housing Partnership Corporation loan after being directed to do so by the Mayor, who also chairs the City’s Bond Committee.  The loan is set to mature on September 29, 2019.  This note will also finance badly needed street and sidewalk construction;
  • Issuing an order, without authority, that directs the Treasurer’s Office to withhold all payments relating to the Wilmington Housing Partnership Corporation, including payments to contractors for work performed for Wilmington Housing Partnership Corporation projects.  These payment obligations are now past due as a result of the Treasurer’s withholding payment; and        
  • Issuing an order, without authority, that directs the Treasurer’s Office to withhold all payments in connection with a lease agreement between the City and landlord for property used for the operation of a cable television channel, including payment of three past due invoices for rent.  The lease agreement is related to a dispute involving the City’s selection of a new operator for its cable channel.  The Treasurer’s husband, Charles Potter, vocally opposed the City’s selection.  

For decades the Treasurer’s Office has worked seamlessly with each Mayor, executing the decisions of the City Administration and City Council, processing authorized payments, investing City funds and holding positions on various boards and commissions.  The current Treasurer, by contrast, has an outsized view of the role of the Treasurer’s Office, a view not contemplated by the City Charter or City Code and which has proven disruptive to the operation of City government.  The City Charter and City Code do not empower the City Treasurer with any unilateral policy-making authority regarding the use of City funds.  The Treasurer’s role is ministerial.  According to the City Charter and Code, the Treasurer’s duties are limited to:

  • Receiving daily moneys and making deposits;
  • Paying money out of the City’s treasury when authorized;
  • Providing a list of the City’s securities to the Director of Finance;
  • Redeeming or purchasing bonds as authorized by City Council and the City’s Bond Committee;
  • Serving as custodian of certain pension funds; and
  • Serving on various committees, commissions and boards.  

Further, the City Charter requires members of the City Administration, including the Treasurer, to communicate and cooperate with each other in the execution of their duties.  Treasurer Jones-Potter, however, has consistently refused to do so, even going so far as to repeatedly refuse to meet with the City Chief of Staff, Tanya Washington.  

Mayor Mike Purzycki said he has exhausted all efforts to get Treasurer Jones-Potter to work cooperatively with him, his Chief of Staff Tanya Washington and other members of the City Administration, including the finance and budget directors.  Regrettably, those efforts have not proved successful and legal action is now needed in order to permit City government to carry out its essential functions. 

“None of us want the Court to have to intervene and resolve this problem,” said Mayor Purzycki. “Unfortunately, we had no choice but to seek the Court’s intervention after exhaustive efforts on my part, many members of the City Administration as well as members of City Council.”

A copy of the City’s Court filing can be viewed here. In addition, an April 9, 2019 letter from the Mayor to the Treasurer and an accompanying legal memorandum from the City Solicitor to the Treasurer can be viewed here.

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