After five readings, Delaware City Council approved its 2024 budget as part of a special meeting held on Monday at City Hall.
In November, the council voted unanimously to place a proposed tax increase on the 2024 spring primary election ballot. If approved, the income tax rate would rise from 1.85 to 2.20 for five years.
With the fate of that proposal yet to be decided, the city was tasked with formulating its annual budget to reflect its current reality, which has resulted in nearly $2 million in cuts to the operating budget. As approved, the city is projected to have a total operating budget of $36,752,086 to begin 2024 with a finishing balance of $25,838,502. Operating fund revenues are projected to total $95,177,507, while expenditures are projected at $106,091,091.
Delaware projects to have an unencumbered General Fund balance of $13,589,043 to begin 2024 with a projected fund balance of $10,669,941 by the end of the year. Revenues to the General Fund are projected to total $34,932,570, and expenditures are projected to be $37,851,672.
After beginning the year at a projected $25,902,446, the city’s Capital Improvements Fund is expected to fall to $16,249,078 on Dec. 31. Expenditures in the fund are projected at $73,880,234, exceeding the projected $64,226,867 in revenue.
Adding to the financial burden facing the city is the necessary funding of the municipal court operations, something that wasn’t on the books prior to 2022. Before then, the court covered its costs entirely through fees related to court activities. However, with those revenues declining as a result of the number of criminal and traffic cases being filed with the court also declining since 2022, the onus is now falling on the city to fund the operations.
In an introductory letter to the council as part of the budget submission, City Manager Tom Homan noted that 28,456 cases were filed with the Delaware Municipal Court in 2017. In 2022, the total number of new cases dropped to 12,457, a decrease of 56% that has severely impacted the court’s revenue stream.
Homan, who is set to retire next year after more than two decades leading the city, also noted the decrease in cases has not equated to a decrease in workload for the court staff, necessitating continued funding at prior levels.
Over the past two years, the city has been able to absorb the court’s shortfall in revenue with federal funds from the American Rescue Plan Act. With those funds no longer available, the requisite $1.8 million will be covered by the city’s undesignated fund balance.
“Every budget I have proposed over the last 25 years presented challenges and opportunities,” Homan stated in the letter. “This year’s budget, however, presents an issue of unprecedented magnitude: a transfer of $1.8 million from the General Fund balance to fund municipal court operations.
“Fortunately, the city’s reserve is available to offset the funding gap for 2024. Had this not been the case, budget cuts of a nearly equal amount would have been required. This type of revenue gap filling is not sustainable, which underscores the importance of the city’s proposed income tax levy, a portion of which would need to be dedicated to court operations. Absent a new revenue source, general fund operations will be negatively impacted in the future.”
To view the budget in its entirety, visit www.delawareohio.net/government/departments/finance and click on the “budgets and reports” link.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.
