City council considers reserve funds
The Bella Vista City Council discussed setting an unreserved general fund balance for 2019 during its Monday, Sept. 17, work session.
These items will be up for further discussion and potential approval during the council’s Monday, Sept. 24, regular meeting.
Mayor Peter Christie explained that, while the council did approve financial policies in April, an actual percentage for unreserved funds — a set of funds maintained within a percentage range of the city’s annual income to cover risks, including economic downturns and other costly emergencies — was not chosen. The policy was approved with a placeholder range of 2535 percent of annual income for reserves, he said.
“We’ve been looking at that as part of our budgeting process,” Christie said.
The budgeting process in question also includes safeguards, he said, to cover the city in the event of a financial emergency.
According to a report prepared by finance director Cary Elsten, the city currently keeps $7.716 million in unreserved funds, which exceeds the $3.6-5.04 million these guidelines call for. According to the document, the city’s income for a 12-month period was $14.4 million.
According to the document, “Excess unreserved general fund balances will be brought into the target range in a spending plan phased in over the succeeding five years in conjunction with the five-year financial plan.”
The unreserved general funds are to be monitored monthly and a shortage at any point will trigger 5-10 percent budget cuts, which are to be included in reduction plans prepared by department heads.
Council member Frank Anderson said he had concerns about including a maximum number for the unreserved general funds.
“It almost sounds like we’re forcing ourselves to spend down to 35 percent,” he said. “It seems to me we should have a floor.”
He suggested wording the final product as a minimum balance.
Council member John Flynn said it’s important for the city to use the money it brings in.
“At some point, citizens say ‘why are you sitting on all our money?’” he said.
Council members also looked at setting a hearing date for a request from Cooper Realty Investments to vacate a roughly 0.47-acre portion of public rightof-way on Memorial Drive.
“Cooper has come forward with a large-scale development plan to rejuvenate … Town Center East. That includes an extension of Harps,” Christie said.
The proposed time and date for this hearing is 6:30 p.m.,
Oct. 22, at the Bella Vista court facility, during the regular city council meeting.
The council also considered purchasing a baler for the recycling center at $75,256.60, covered by a grant from Benton County.
This baler, he said, is going to be useful because the current baler has too narrow a throat, meaning volunteers need to stand at the top and fold cardboard to fit.
This purchase needs to be approved, he said, because the order needs to be placed before November.