Council debates using redevelopment (TIF) balances and self‑insurance reserves to cover budget gaps

Delaware County councilors pressed for options to close a multi‑million dollar budget shortfall and discussed whether unallocated tax‑increment financing (TIF) balances or the county’s self‑insured health reserves could be used to cover operating needs.

Why it matters: councilors and commissioners said several TIF districts have accumulated new assessed value and unallocated balances, and asked whether those funds can be used to relieve pressure on the general budget. County staff and counsel said the redevelopment commission controls TIF revenues but noted a recent statutory change that may permit some TIF dollars to be spent on public safety operations.

County finance remarks and redevelopment balances: county staff said an accounting summary from Baker Tilly identified roughly $6 million in unallocated new TIF revenue available this year beyond bonded obligations, and that total TIF balances across districts were about $21.3 million. Council members asked the County Redevelopment Commission to study whether some of those balances could be reallocated to county operational needs or capital requests tied to economic development.

Legal context cited at the hearing: county counsel read a statutory provision, 36‑7‑14‑12.2(a)(28), that was added by the legislature allowing revenue from a tax increment financing district allocated for police and fire services to be expended for both capital and operating expenses. Counsel noted the statutory language is recent and not extensively interpreted by courts, so use of TIF for operating expenses outside explicitly defined public safety purposes carries legal and policy risk and would require redevelopment commission action and documentation tying expenditures to allowed purposes.

Self‑insured health fund and nonreverting funds: councilors also discussed repeated shortfalls in the county’s self‑insured health fund (fund 4701) and the interaction with clinic and claims payments. Staff explained that premium collections flow into a health benefit fund and that claims, clinic contract payments and stop‑loss payments are paid from the same account; when claims exceed premiums in a given year, the fund balance can fall and departments must sometimes be reimbursed or the county must appropriate additional funds. Staff said the county had approximately $6.43 million net revenue in 2024 but faced more than $6.0 million in claims and that clinic payments and unexpected claims have driven appropriations during the year.

Next steps and requests: council members asked the redevelopment commission to evaluate possible reallocations and asked auditor and finance staff to prepare a revenue audit trail for the major restricted funds (including the bridge, MVH and wheel‑tax funds) so the council can see inflows, outflows and reimbursements tied to federal and state grants. Counsel and staff recommended any use of TIF or restricted funds be documented with legal justification and that uses tied to public safety be prioritized under the new statute.

Ending: County leaders said they will ask the redevelopment commission to consider whether redevelopment balances can help bridge operational gaps and will return to the council with an audited revenue trail and legal guidance on allowable TIF expenditures.