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Finance committee continues taxation-policy work session; staff to draft policy and return for priorities discussion
Summary
City financial advisor David Conley led a work session on a proposed taxation policy. The committee discussed reserve targets, sustainability, fee structures, development incentives and the hotel-motel tax. Staff will draft a policy outline and return with priorities and supporting financial tables at the next meeting.
The Delaware City Finance Committee spent the bulk of its June 2 meeting in a taxation-policy work session led by David Conley, the city’s financial advisor. Conley and city staff reviewed options for a written taxation policy that would guide future council and staff decisions on taxes, fees and capital funding.
Conley framed the session as a work meeting to establish “general concepts of what a taxation policy can include.” He told the committee the policy would document the city’s revenue philosophy, financial guardrails and priorities so future councils and administrators would have consistent guidance.
Key discussion points included reserve targets and sustainability. Conley presented a sensitivity analysis showing the city’s general fund reserve target under the city’s current policy (described in the presentation as “combined existing revenues of 8.5”) and his own calculated reserve benchmark of about $10.4 million. Staff said the city’s current general fund balance was roughly 13.1 (units as presented in the packet) at the time of the review; staff noted the city already maintains a financial policy and monitoring tools and recalled budget-restraint procedures adopted during the 2020 COVID downturn.
Committee members stressed the importance of maintaining infrastructure and routine maintenance programs rather than deferring repairs and discussed dedicating revenue streams for capital upkeep. Members raised housing affordability and road conditions as priorities. Several members urged that Delaware remain relatively affordable while also staying competitive for economic development; suggestions included using fees, impact fees, NCA revenue and targeted incentives to shift more capital costs away from individuals.
Conley and staff discussed debt levels, noting the city’s general obligation debt is low and largely scheduled to be paid off within the next 15 years — creating potential future capacity for borrowing or reallocation of debt service budgets. Staff also raised the hotel-motel tax: current practice directs those revenues to community promotions, but staff asked committee guidance on whether a portion should be capped or redirected in the future if hotel receipts increase substantially once new hotels and entertainment venues arrive.
Committee members asked staff to draft a written policy outline that will include recommended reserve targets, cadences for fee reviews (committee members suggested multi-year cadences such as a 3–5 year review for impact/capacity fees), principles for which funds should be self-sustaining, and how the city should treat sunsetting fees. Conley said he would prepare a draft policy and bring it back for prioritization at the next meeting; staff said they would also prepare comparative side-by-side tables on fees and services.
No formal votes were taken on policy direction; the session concluded with instructions for staff and Conley to prepare the draft policy and financial tables for the committee’s next meeting, scheduled for June 16 at 3:00 p.m.
