Delaware City Council held its fourth reading of the proposed 2022-26 Capital Improvement Plan (CIP) during its Sept. 27 meeting. The CIP was originally expected to be approved following the reading, but due to a lack of funding for some of the projects, the plan will now go to an additional reading to allow for consideration of proposed changes.
City Finance Director Justin Nahvi sent a memo to the council ahead of the meeting requesting a reduction of approximately $1.8 million dollars in the 2022 budget of the CIP that will force some projects to be delayed.
Among the projects that are being pushed back to later years are improvements to Oak Grove cemetery, allocations for the city’s sidewalk program, traffic improvements, firearm simulators for the police department, and purchasing wheeling recycling “toter” containers. Included in the traffic improvement projects that have been delayed is work on East Central Avenue that would alleviate some of the traffic congestion those in the community face at certain times of the day.
During last week’s council meeting, City Manager Tom Homan said those projects have been pushed into 2023. However, with those projects being pushed to the following year, Homan said there is still a “large imbalance between our expenditures and our revenues” in 2023.
“This is something we have talked about for a number of budget cycles and really underscores the challenges we face as a community with respect to our capital needs,” Homan told council. “Whether we’re growing or not growing, we have significant capital needs, and this is something that will obviously need to be talked about as part of the 2022 budget process…”
Homan reiterated that the projects are not being canceled but rather pushed further out while the city hopes to address its capital needs, adding the issues underscore the need for more dedicated revenue. “It’s not just roads, it’s a number of different things,” Homan said.
Nahvi pointed to rising insurance claim payouts the city is facing as a significant aspect of the budgeting issues.
“What happened last year was, during the shutdown, people weren’t going to the doctor,” Nahvi said. “We saw significant declines in our claims costs. And then I would say going into the second quarter of this year, our weekly claims bills — they average about $100,000 — started going up to $250,000. And just last week, we paid out a claim of $960,000 because we’re self-funded on insurance.”
Nahvi said next year’s forecast is projected to see increased costs to the city for both single and family insurance plans, which is putting additional stress on the city’s general fund as insurance costs are part of the city’s operating budget.
“That’s one of the reasons we’re seeing a large pressure on the general fund because health insurance and payroll benefits are a portion of the operating cost, and that doesn’t allow as much money to be used for capital improvement spending,” Nahvi told council.
Nahvi said that to address the issue, new health insurance options will be introduced next year, including a “less-rich EPO” and operating a Health Savings Account (HSA) plan. Nahvi hopes to have those plans in place in January, he said, with the idea that, over time, employees with see the benefits of an HSA plan and opt into it, subsequently lowering the cost to the city.
The fifth reading of the CIP will be held during next Monday’s council meeting, which will begin at 7 p.m. in the council chambers of City Hall.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.