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University of Delaware employees to take 5% pay cut for remainder of fiscal year

From Delaware Online

University of Delaware’s non-union employees will all take a 5% pay cut for the remainder of the fiscal year, the latest in a string of efforts to shore up the school’s projected $250 million financial deficit brought on by the COVID-19 pandemic.

The pay cut will come in the form of nine furloughed days: three days before Thanksgiving, three before Christmas, and three at employees’ discretion.

The salary reduction will be evenly spread through paychecks, starting Nov. 1 until the end of June 2021.

Two weeks ago, the university announced that it was facing a budget deficit of about $250 million, as significant revenue loss and increased expenses from the pandemic strained finances.

At the time, employees were offered a voluntary retirement option. Since then, 138 employees have expressed interest in early retirement, and will receive final approval tomorrow.

Over the summer, senior administrators at the university took a 10% pay cut. Thursday’s cut will be in addition to that.

Some units may face a salary reduction greater than 5%, the university said in a message to faculty and staff on Thursday. Future workforce reductions, restructuring and other cost-saving measures could be announced down the line.

The pay cut does not apply to student employees, postdoctoral fellows or anyone on an H-1B visa. The university continues to negotiate with faculty and other unions.

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Medical facility takes shape: Commercial development booming along Del. 1 in Milford

From Delaware State News

MILFORD — There’s a lot of commercial development happening in Milford, and that growth may be clearest to those passing by the town’s Silicato Parkway exit off Del. 1.

That’s where Silicato Development is nearing completion on a medical building near Grotto Pizza and Royal Farms.

“It’s projected that the building will be completed at the end of 2020, so we will be starting a few of the tenant build-outs soon,” said Nicole Silicato Miller, the vice president of Silicato Development.

She hopes the facility will bring 50 to 60 new jobs to the area and said the building is already 25% leased out.

“I’m not releasing the tenant names yet, but we do have local family practitioners who are leasing in the building, and a boutique pharmacy … about to sign a lease, which is something I really wanted to do on the first floor,” Ms. Silicato Miller said.

A Dolce café will be located in the lobby, supplementing its main location in downtown Milford.

“I wanted to have a boutique pharmacy with the coffee shop so you can do that one-stop shopping in the building,” Ms. Silicato Miller said. “You can go to your family practice, you can go to pharmacy and you can grab a sandwich, and it’ll be a nice, pleasant experience.”

She thought a local coffee shop with a good reputation in the community would suit her vision best.

“I reached out to Stephenie and Dean Tatman,” Dolce’s owners, Ms. Silicato Miller said, “and they were extremely interested. They signed an intent to be in the building a year and a half ago, before the plans were even done.”

Ms. Tatman hopes the new location will attract beach traffic.

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Employer mandates: mandating job and income loss

Paid leave and similar employer mandate policies have risen in popularity over the past few years, and really came to the forefront during the coronavirus pandemic. On the surface, these measures will help workers (especially low and middle class) provide for and tend to their families. In reality, they will hurt businesses, cost jobs, and lead to lower wages.

An alternative option would be to allow the private sector to come together to either establish insurance plans that would cover short-term disability or paid family leave plans or allowing lower-income hourly workers to choose if they would want to convert overtime pay to paid leave. If we want to help workers, we should do so in a way that actually helps them.

Especially now, as businesses are struggling to recover from the economic crisis that accompanied the COVID-19 pandemic, employers cannot afford this burden. Losing your job is worse for a worker than losing a paycheck from not having paid sick leave or a paid family leave mandate.

Unfortunately, these platforms leave out a very important part of these types of mandates: the costs that will be placed on employers will end up hurting the very people they are seeking to help. Economic analysis and economists—both liberal and conservative—agree that the main people who pay for employer mandates are employees.

The cost of the health care provided to the employee does not result in more productivity or value of that employee at their firm. By adding this cost, it is more likely that incomes will be lowered in order for the total value of the employee to remain the same, even with additional costly mandates. Sometimes, the cost of these mandates results in layoffs so that the company can afford to provide them to the remaining employees.

So why do politicians who claim to advocate for workers support ideas that will hurt them? Well, it’s easy to support something that sounds good and has hidden consequences and costs.

For low income workers, employer mandates like health insurance mean far higher costs for the employer and a higher likelihood of layoffs. Since people cannot be paid less than minimum wage, the higher costs are forced onto employers who will have to adjust for these costs by laying off workers or cutting hours.

In a 2019 New Hampshire bill to implement a government-administered paid family leave program, a new tax was included to help cover the costs of the mandate. However, the tax that would cost the average worker an extra $267 per year only covered one fifth of the cost of the mandate. In this instance, employees would lose earning from both the tax and whatever cost-cutting measures their employer would be forced to take.

The costs aren’t just monetary.

If an employer has two applicants for a job and one appears more likely to take advantage of a mandate like parental leave (young, female), it might reduce the employer’s willingness to hire that person. Hiring a young woman then becomes a cost burden that an employer may not be willing to take on. In turn, this mandate intended to provide a benefit ends up leading to discriminatory hiring practices and higher unemployment in a new group.

When making decisions that impact businesses, lets allow businesses to contribute ideas for better solutions that benefit employers and employees alike. The government is not the answer to every question.

Will Delaware’s certificate of need law fall in 2021?

From Delaware Business Times

DOVER – Opinions about Delaware’s requirements for certificates of need (CONs) for large medical expenses vary so much that at first glance some stakeholders don’t seem to be talking about the same issue.

Dr. Chris Casscells, policy director for the Caesar Rodney Institute, calls it “a blunt-force instrument that has been brutal to the price of health care in Delaware” and therefore should be eliminated.

“It never did its intended goal,” he said of the law.

Casscells wants the marketplace to judge, and noted that in the late 1990s, when the system was temporarily unfunded, multiple freestanding surgery centers were created.

Wayne A. Smith, CEO of the Delaware Healthcare Association (DHA), which represents hospitals and allied organizations, supports the intent of the regulatory process, but recommends operational changes involving quorums and staff experts.

And state Rep. Lyndon Yearick, a Kent County Republican, has changed his mind over the last five months to embrace the free market.

“If there’s a health care institution that’s willing to risk their capital and assets, I don’t know of any reasons why there should be any restrictions,” he said.

Certificates of need were put into the spotlight in 2019, when Bayhealth and Beebe Healthcare proposed emergency departments on U.S. Route 9 in Sussex County, within 10 miles of each other. The Delaware Health Resources Board, which hears applications for the projects and rules on their permissibility, denied Beebe’s application, while Bayhealth withdrew its application before a vote.

Delaware passed a CON law in 1978, following a 1975 federal mandate that such laws would improve the delivery of health care. The federal law was “based on the economic assumption that excess health care capacity directly results in health care price inflation,” a 240-page report by legislative analysts for the Joint Legislative Oversight and Sunset Committee concludes.“States established CON programs to restrain health care costs and allow for coordinated planning of new services and construction based on a genuine community need,” the report continues. “CON programs also emphasized the importance of distributing health care services to disadvantaged populations or geographic areas that may be ignored by new and existing facilities.”

A later federal review found the law didn’t generate the desired outputs, so the U.S. government backed off in 1987, and a dozen-plus states have since dropped their CON laws.

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U.S. Corrugated plans $80M Dover plant

From Delaware Business Times

DOVER — U.S. Corrugated plans to build an approximately $80 million corrugated cardboard box manufacturing plant near Dover while relocating its longstanding New Jersey operations to the First State.

With aims to break ground in November, the 497,000-square-foot “super plant” will be located on a 40-acre parcel between Camden and Dover, bordered by Route 15 and the POW/MIA Parkway. U.S. Corrugated founder and chairman of the board Dennis Mehiel envisions a facility featuring the latest in industry-leading technology.

It’s estimated that once U.S. Corrugated of Delaware is operational, it should bring around 150 jobs to the Dover area. Mehiel said that U.S. Corrugated will close its 35-year-old, full-line box plant in Newark, N.J., and plans to transfer operations to the new Dover plant by the end of 2021. Preliminary plans show the site at roughly 110 loading docks and potential to expand the building footprint somewhere down the line.

“We’ve had tremendous upgrades since we opened our New Jersey facility, and it’s been upgrading in leaps and bounds in the last 20 to 25 years,” Mehiel told the Delaware Business Times. “There’s substantial opportunity to grow in Dover to meet significant demands we will face in the next two to three years.”

Once the Dover manufacturing plant is fully operational, it would have the capacity to produce approximately 250% more boxes than the Newark facility and bring in $120 million in additional revenue per year, he said.

The project still has to clear the permitting process with state, county and city entities in the near future. Delaware Prosperity Partnership President and CEO Kurt Foreman noted that his office collaborates closely with Delaware and  Dover officials as well as the Kent Economic Partnership to help bring industrial and manufacturing operations to Central Delaware, and he is pleased to continue moving forward to potentially bring another company to the state’s capital. The DPP and its partners have been actively working with U.S. Corrugated of Delaware team since early 2020.

“We are excited to see the progress being made toward a possible facility in Dover, but several key steps remain to complete. DPP looks forward to sharing and celebrating the good news once everything is completed,” Foreman told DBT.

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State Labor Department announces extension of jobless benefits

From Delaware Business Now

The Delaware Department of Labor announced the extension of unemployment benefits, triggered by Delaware’s high jobless rate.
Delaware’s three-month averaged, seasonally adjusted unemployment rate as of August 2020, is 10.6 percent.
Delaware has ranked at or near the top 15 among the 50 states in its jobless rate since the Covid-19 pandemic took hold in March.
Primarily federally funded, the “High Extended Benefits” program kicks in when the state’s unemployment rate averages eight percent or higher for three consecutive months. It offers claimants an additional seven weeks of extended benefits for a total of 20 weeks.
It also extends the Pandemic Unemployment Assistance program for another seven weeks, offering a total of 46 weeks of unemployment insurance benefits to eligible Delawareans.
State Labor Secretary Cerron Cade said, “This expansion of benefits will provide much needed assistance for Delawareans whose eligibility for Extended Benefits was due to expire at the end of September. With the expiration of the Federal Pandemic Unemployment Compensation and the short period during which the FEMA Lost Wage Assistance program is active, this provides seven additional weeks of the safety net for the long-term unemployed. This extension of benefits will help workers for as long as the state remains above the three-month average threshold.”

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Goldman Sachs to expand consumer finance business to Wilmington’s Riverfront

From Delaware Online

Goldman Sachs’ expansion into retail lending is bringing a sliver of the investment bank’s operations into the credit card hot spot of Delaware.

Officials at the storied 150-year-old bank said they are securing a temporary lease for offices along the Wilmington Riverfront to house the company’s initial set of Delaware hires, estimated at 25 to 50 people.

The company plans to employ about 150 people in Wilmington at the end of next year, said Chantal Garcia, chief operating officer for Goldman Sachs’ Consumer Business.

Garcia declined to disclose the exact location of their initial office along the Riverfront, but noted it would be a small space. Later, the company will move to more expansive offices, she said.

“We have not yet determined … our long-term location, in part, because there are potential other businesses or partners within the firm that may be interested in co-locating with us,” Garcia said, noting that compliance operations might also expand into Delaware.

The news is certain to be welcomed by city and state officials, who have poured hundreds of millions of dollars over 25 years into a transformation of the Riverfront, once a declining industrial area.

While today it features modern offices, apartments and restaurants, the revitalization of the city’s overall core has been plagued in recent years by a roller coaster of restructuring within the financial services industry.

Last year, the British bank Barclays moved 500 Riverfront jobs to New Jersey.

In June, Delaware officials announced plans to give the bank $2.5 million in taxpayer grants to create another 300 jobs in Wilmington.

Garcia said Goldman Sachs last week began conversations with the state’s private economic development agency about potential incentives.

She said Goldman Sachs is committed to Delaware, whether or not it receives taxpayer grants. She noted the company already has extended offers to a portion of what will be its new Delaware workforce.

Goldman Sachs’ officials chose Delaware over locations in Texas, Utah and Illinois, Garcia said, because of the state’s substantial pool of finance workers, its relatively low cost of living and its proximity to the bank’s headquarters.

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Beebe drops plans for Milton campus

From Delaware Business Times

MILTON — Beebe Healthcare’s plans for a Milton campus were put on pause, as the development group tasked with constructing the building withdrew its application for the project last week.

Earlier this year, Phoenix RHCS Holdings announced a partnership with Beebe on a new campus, tentatively called the Jerry Ann McLamb Medical Pavilion, on 8 acres in downtown Milton. Early plans showed two 40,000-square-foot offices, one of which to be leased to Beebe and the other would have been used for complementary medical services.

In January, Beebe’s then-interim president and CEO Rick Schaffner told the Delaware State News that the Milton campus would provide primary care, walk-in care, as well as diagnostic imaging, laboratory services and rehabilitation services.

The office would have been Beebe’s most northern location, continuing a string of recent expansions through Sussex County. This spring, Beebe opened a freestanding emergency department and a cancer center at the Beebe South Coastal Health Campus. Construction work is underway at Beebe’s $124 million surgical hospital on Route 24 near Rehoboth Beach with a target opening in 2022.

The pavilion would have honored McLamb, a Milton native and a dedicated nurse that graduated from Beebe School of Nursing and spent most of her 50-year career at the southern Delaware health system. McLamb, who died in 2018, is the mother-in-law of Phoenix RHCS Holdings chief financial officer Chris Selzer.

The proposal would have also marked a first in Sussex for Phoenix RHCS Holdings, as it has previously developed medical offices in Southeastern Pennsylvania and New Castle County. Most notably, the company developed the Apex Medical Center with its memorable doctor’s bag sculpture in Christiana, according to a company representative.

All five parcels are owned by Lobolly, LLC,  the property management division of Draper Holdings, which owns the WBOC television station. Phoenix RHCS Holdings planned to buy the property from Lobolly, according to a Cape Gazette report, but the land has not changed hands as of Sept. 28.

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Pandemic forces small Delaware retailers to pivot to survive

From Delaware Business Times

Delaware’s downtown districts strived to rebrand themselves as the place for one-of-a-kind shopping and community experience, but the COVID-19 pandemic has forced dramatic change in the independent retail business model.

For decades, big box stores have been slowly taking market share from small businesses in designated commerce areas like Downtown Districts or Main Streets. Independent stores see less than a quarter of all retail shopping today compared to about half of sales in the 1980s, according to a study completed by the Institute for Local Self-Reliance. But gradually, Main Street Inc. programs and other grassroots efforts have led the way to preserve and revitalize historic commerce corridors.

Nationwide retail and restaurant spending totaled $526.1 billion in August, an increase of 0.6% from the previous month, according to the U.S. Department of Commerce. Spending has been steadily growing over the past four months, but that may falter now that extra federal unemployment benefits have lessened. Clothing and accessory sales skyrocketed 105% in June versus May, when shutdown orders were starting to lift, but now customers have tightened their purse strings again.

Through the pandemic, big-box stores stood to profit more than smaller, independent stores. Giants like Walmart and Target that offer groceries remained open for one-stop shopping in the early days of the crisis while Main Street businesses were not categorized as essential services.

“I hate to see a small business close,” said Jenn Marsh, the owner of Stubborn Soul Boutique in Middletown. “It’s a scary time for sure, and with the overhead with brick and mortar, sometimes I wonder if we would have made it this far. The challenge with Amazon and Walmart is that we’re not them, and we’ll never be them. We have to find another way.”

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From ABD Founder: Founding A Better Delaware

From The Sword in the Stone Blog

by ABD Founder, Chris Kenny

With my decades long involvement in civic issues affecting Delaware and a constantly growing, deep understanding of their viable solutions, the question became how to use that foundation of knowledge to help improve the state’s concerns that have risen to a critical level. That is what has led me to my next chapter: creating A Better Delaware, our pro-growth, pro-business advocacy group.

One year ago I founded A Better Delaware, a non-partisan grassroots organization to advocate for pro-growth, pro-business policies and greater transparency in government. Now more than ever we need a collective effort to promote policies that will grow our economy, spur sustainable investments and create jobs. Our group routinely communicates key issues in Delaware policy, and here are some very startling facts about the Delaware economy:

With these realities harming Delaware’s growth and success, my statement on A Better Delaware’s official launch last year rings true now more than ever:

“I speak with employers and workers every day who share my concern about Delaware’s business climate and our competitiveness with other states. Too many politicians in Dover are out of touch with the realities of starting and operating a business, and what it takes to create good jobs.”

Our non-partisan group offers year-round communication to promote policies benefiting Delaware’s economy, and our grassroots success is evidenced in our group’s engaged online community (click here to visit our Facebook page). Almost 10,000 followers, over 13,000 email subscribers, and over a dozen distinct advocacy campaigns later, A Better Delaware celebrates one year of working with and for the Delaware people.

In addition to the ABD group, this year we have launched A Better Delaware’s PAC. To supplement our group’s efforts, the A Better Delaware PAC was created to apply the necessary pressure to affect political change and educate our state legislators. The ABD PAC will offer significant support for specific candidates who mirror our group’s pro-growth, pro-Delaware policy goals. As this year’s election cycle culminates with important elections at the local, state and federal level, the creation of our political action committee will allow us to make real change when it is needed most.

We will continue to attack the issues at all levels from the grassroots community level to holding our state’s politicians and policymakers accountable. I explained the need for transparency at all leadership levels at ABD’s founding:

“A major reason Delaware is losing ground is because few are holding the politicians accountable. A Better Delaware will make sure taxpayers understand what is at stake and who in Dover is working for them.”

OUR GOVERNMENT OPERATES BEST WHEN THERE IS AN EFFECTIVE SYSTEM OF CHECKS AND BALANCES IN PLACE. OUR GROUP WILL SERVE THAT GOAL.

A Better Delaware and the A Better Delaware PAC were created to provide educational communication informing our community and voters on the issues and policies that will most benefit our state and economy. This project will be an ongoing conversation around policy changes that will benefit our state. As for my personal political aspirations? That’s a topic I’ve been asked about quite a lot recently. My answer? I’ll save that for the next post.