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The Danville Town Council is set to discuss the town’s finances and review a draft budget and capital improvement plan update in a study session this week, in what will be the first of a series of workshops on the draft budget ahead of a vote to finalize it this summer.
The upcoming meeting marks the start of the public review and input period for the next fiscal year’s draft budget, with additional workshops scheduled on May 14, May 21, and potentially May 28 ahead of a public hearing and council vote on June 4.
While local municipalities are facing a number of financial challenges in the upcoming fiscal year thanks to factors ranging from the continued effects of the COVID-19 pandemic, inflation, storm damage, and the end of one-time emergency federal and state funding during the first years of the pandemic, Danville’s financial future remains stable according to town officials in a memo prepared for the upcoming workshop.
Overall, the town’s revenue projected in the 2024 to 2025 fiscal year is $44,338,969, comfortably exceeding the projected expenditures of $42,116,119 recommended in the draft budget up for discussion this week
“Locally, recovery has been aided by strong property values that continue to increase the Town share of property taxes paid by Danville property owners,” Town Manager Joe Calabrigo and Finance Director Lani Ha wrote in the memo introducing the draft budget.
“Local businesses experienced a period of economic recovery that started in 2021 and ran to the beginning of 2023 before leveling off,” they continued. “Sales tax, which acts as a benchmark for local business performance, reached an all-time high level by the end of 2022 before dropping off in 2023. Sales continue to outperform pre-pandemic levels and sales tax revenue continues to exceed the town’s budget forecasts.”
While finances have been relatively stable in Danville despite economic curveballs being felt across the country and world in recent years, town staff added that they were continuing to account for new and continued challenges in budget forecasts for the coming decade.
“New physical challenges are expected to be driven by a variety of factors,” Calabrigo and Ha wrote. “Inflation, interest rates, oil prices and stock market volatility continue to affect the nation’s economy. The Russia Ukraine war, conflict in the Middle East, and the status of China and Taiwan have further geopolitical instability. Domestically, the US is facing an unprecedented border crisis, uncertainty over the outcome of 2024 elections and potential changes in leadership and policies. An increase in the number of severe weather events has impacted virtually every region of the country.”
More locally, Calabrigo and Ha pointed to the potential challenges that could emerge from new growth in the town in the wake of the recently certified Housing Element that is subject to new state legislature aimed at increasing affordable housing and loosening restrictions from local municipalities on new housing developments, representing “a seismic shift in the town’s previous carefully managed growth policies.”
“The resultant growth potential could present significant challenges from a revenue and service delivery standpoint that will require additional time to quantify,” they wrote.
Operating expenditures according to recommendations in the draft budget are set to increase 5.7% overall compared with the current fiscal year’s, including a 12.3% increase in general government spending and an 8.2% increase in police services expenses.
The Danville Town Council is set to meet at 8:30 a.m. on Tuesday (April 30). The agenda is available here.