Delaware City finance committee advances draft taxation-policy benchmark report, narrows scope on stormwater and surplus use

The Delaware City Finance Committee on July 29 reviewed and revised a draft taxation policy and accompanying benchmark report intended to guide how the city evaluates revenue needs, measures operational efficiency and prioritizes the use of surplus funds.

The draft, discussed in detail over more than an hour, will require annual reporting to the finance committee on benchmarks for the city’s major funds, narrow the initial benchmarking scope to exclude the stormwater utility, and direct the city manager to coordinate annual reports on efficiency and cost-saving efforts as part of the budget process.

At a meeting that began at 3 p.m., committee members spent most of the session refining specific triggers and guardrails the city will use to determine when to recommend new revenue sources. Staff and committee members also discussed a three-year forecast standard, a revised definition of “excess” fund balance tied to the city’s Financial Management Policy, and a prioritization framework for spending surplus balances.

The benchmark report and policy: what the committee agreed

The draft requires an annual benchmark report that would present a short “scorecard” of the city’s major funding sources and a brief infographic summary intended for public distribution. Staff described the benchmarking document as a concise (roughly 8–9 page) report paired with a one-page scorecard that could be linked in utility bills or posted for the public.

Staff proposed and the committee accepted excluding stormwater from the initial set of “major funds” in the annual operating forecast. Staff explained stormwater is billed to property owners rather than every resident and that a 10% stormwater rate increase would amount to roughly 5 cents per month for a typical bill; committee members accepted that explanation as a rationale to exclude the smaller utility from the first-pass scorecard while leaving open the option to add it later if the fund’s importance grows.

Reporting, efficiency and the role of department directors

Committee members directed that the city manager shall coordinate an annual report on efficiency efforts and cost-saving activities and present those findings to the finance committee during the budget process. The draft requires department directors to document and show how their departments have achieved efficiencies (examples cited include cooperative purchasing, training to reduce equipment damage and lower insurance claims, and staffing changes such as creation of a purchasing analyst).

Staff and committee members emphasized the goal is not blind spending cuts but “efficient operations” and “best value” decision-making that show outcomes and service levels rather than simply reducing inputs. Committee discussion repeatedly returned to the need to tell the story of savings and efficiency improvements so the public can see how operations yield value for each dollar.

Fund-balance triggers, forecasting horizon and surplus priorities

The committee shortened an earlier multi-year forecast to a three-year operating forecast and refined language about the city’s target fund balance. Under the revised wording the benchmark policy will treat an “excess” fund balance as a year-end unencumbered balance that exceeds twice the minimum balance set in the city’s Financial Management Policy. If the three-year forecast shows operations plus budgeted capital transfers cannot be sustained at or above the minimum fund level, the city manager—working with finance staff—will propose corrective actions that may include spending reductions, disposal of underused assets, or proposing new revenue sources.

When surplus funds do exist above the stated threshold, the draft directs the city manager to present a proposal to the finance committee and then to council. The document lists several examples of permissible uses (not exhaustive): capital improvements, economic development (including pad-ready sites and protective land purchases), payoff or restructuring of debt, and measures to reduce or restructure taxes. The committee decided the final prioritization and any specific allocation would be made at council’s discretion.

Public comment and broader concerns

Scott McVicker, a Delaware resident, urged the committee to make the policy oriented toward avoiding repeat tax measures and to prioritize transparency about any outreach to voters. “The policy seems to be shaping itself into something that is what do we need to do to go to the citizens for more money as opposed to what do we need to do to avoid having to go to the citizens for more money,” McVicker said. He also told the committee it should reject any suggestion that the city obscure the nature of a proposed tax increase from voters.

Committee process and next steps

Committee members asked staff to clean up language, finalize the scorecard approach, and return a revised draft to the finance committee. Staff said the city manager will coordinate department-level information and that the efficiency report will be submitted annually to the finance committee as part of the budget presentations; highlights would be forwarded to full council. The committee agreed the document should be reviewed periodically (committee members discussed a three- to five-year review cycle) and directed staff to return a cleaned-up draft at the next finance committee meeting, scheduled for Aug. 5 at 3:00 p.m.

Quotes

“It's a part of the process. And ultimately, when we're finished, we'll have something I think the community can be really proud of and the council can be really proud of and future councils can be proud of,” Staff member David said as he opened the discussion on the benchmark report.

“The policy seems to be shaping itself into something that is what do we need to do to go to the citizens for more money as opposed to what do we need to do to avoid having to go to the citizens for more money,” Scott McVicker, a resident, said during public comment.

“We're really talking about efficient use of the available funds,” Chair Shaffer said when the group revised wording from “minimize expenditures” to language focused on efficiency and outcomes.

Ending

Staff will prepare a revised draft reflecting the committee’s changes—including the stormwater exclusion, the three-year forecast, the fund-balance threshold tied to the Financial Management Policy, annual efficiency reporting requirements, and the surplus-priorities list—and bring it back to the finance committee at its next scheduled meeting for further review.