City to con­sider change to emer­gency fund

Dif­fer­ent ap­proach could free mil­lions of tax­payer dol­lars, keep re­serve within guide­lines

Texarkana Gazette - - FRONT PAGE - By Karl Richter

A pro­posed Texarkana, Texas, pol­icy change could soon free mil­lions of dol­lars now held for emer­gen­cies in the city’s re­serve fund.

City fi­nance staff rec­om­mend chang­ing from a per­cent­age-based re­serve to one that could fund city oper­a­tions for 60 days.

As a re­sult, the re­serve bal­ance would be cut roughly in half, but it still would meet com­mon stan­dards, In­terim City Man­ager Shirley Jaster said in an in­ter­view Thurs­day.

Cur­rent pol­icy is to re­serve 25 to 35 per­cent of the to­tal bud­get in case of an emer­gency se­ri­ous enough to stop money from com­ing into city cof­fers. The re­serve fund bal­ance would pay for day-to-day oper­a­tions and any ex­tra ex­penses re­sult­ing from the cri­sis.

“Some of that is re­im­bursed by FEMA if you have an emer­gency, but there are just things that we didn’t plan on in our bud­get. We didn’t plan on bring­ing five bull­doz­ers in to help clear the street or what­ever the sit­u­a­tion may be. That’s ad­di­tional ex­pense,” Jaster said.

The per­cent­age range is the re­sult of a study that de­ter­mined the city should hold back be­tween 17 and 25 per­cent of the bud­get. Of­fi­cials chose the higher end of that range, 25 per­cent, as a min­i­mum and 10 per­cent higher, 35 per­cent, as the max­i­mum amount to re­serve.

The 60-day stan­dard—rec­om­mended by au­thor­i­ties such as the Gov­ern­ment Fi­nance Of­fi­cers As­so­ci­a­tion—is roughly equiv­a­lent to 17 per­cent of the bud­get. So at the high end of the cur­rent stan­dard, 35 per­cent, the city has more than twice as much money in re­serve as is ad­vised. And mov­ing to the 60-day pol­icy will still keep the re­serve bal-

ance within the lim­its the city’s study set.

Un­der the per­cent­age-based pol­icy, the re­serve bal­ance typ­i­cally ranges from about $11 mil­lion to about $13 mil­lion, Jaster said. Adopt­ing the 60-day pol­icy will re­duce that amount by ap­prox­i­mately $6 mil­lion, which would trans­fer into the city’s gen­eral fund to be spent as the City Coun­cil sees fit.

“We’re not re­ally us­ing the money that we have avail­able. We’re hold­ing it for that emer­gency or rainy day, and re­ally, are we hold­ing too much? If we go by the guide­lines—which is the best thing and is what most cities go by—it looks like we are. So we’re go­ing to knock that back down.

“These are tax dol­lars that the cit­i­zens have paid, that we’re not hav­ing avail­able in our gen­eral fund. We felt if we could use those monies it might help us on the rev­enue side,” Jaster said.

Jaster said she will in­tro­duce an or­di­nance to en­act the pol­icy change at the City Coun­cil’s next meet­ing, sched­uled for Sept. 25. A pub­lic hear­ing and vote on the mea­sure will fol­low in sub­se­quent meet­ings.

The City Coun­cil voted Mon­day to adopt a Fis­cal Year 2018 bud­get that com­pen­sates for a rev­enue short­fall by trans­fer­ring $6 mil­lion from the city’s wa­ter fund to the gen­eral fund. A re­cently formed cit­i­zens’ bud­get ad­vi­sory com­mit­tee rec­om­mended the trans­fer to avoid a pro­posed four-cent prop­erty tax in­crease.

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