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St. Petersburg officials concerned about city's rate of saving

ST. PETERSBURG -— Last year marked the second year in a row the city saved less than it had hoped.

While that may not sound surprising given the last few recession-steeped years, it still triggered plenty of angst.

The city's reserve target for its general fund is 20 percent of total appropriations. But in the 2013 fiscal year, the city fell 22 percent shy of that goal, ending the year with about $34.8 million in reserves as opposed to $42.1 million.

Further, the city has a fiscal policy that states if reserves fall below its target by 10 percent or more for two consecutive years, the administration must submit to the City Council a corrective action plan to restore the fund to the appropriate level.

So at a January meeting, council member Jim Kennedy asked for exactly that. His colleagues supported him unanimously.

Officials will present their solution today at the council's budget committee meeting.

According to a memo from the city's top finance and budget administrators, the city's fix is to change the formula used to calculate the savings goal. Officials also suggest establishing a 5 percent target for the core general fund.

"My first question after it was laid out for me was: Are we hiding the ball at all?" said Charlie Gerdes, vice chair of the committee. "If we're making formula changes or changes in the calculation, I don't want there to be any questions about why."

Reserves have historically been a touchy subject. In the past, critics accused the city of stockpiling money even during the recession, or of having too many different piles of so-called "rainy day" funds.

But Gerdes and other council members, who said they were briefed on the plan by the administration, said any serious initial concerns they had have subsided.

The changes will bring more transparency, according to budget director Tom Greene and finance director Anne Fritz.

Right now, to determine if the city has met the target, the city adds the balances of the general fund and economic stability fund.

Officials now propose to also include in the calculation toward the 20 percent goal some other reserve funds: the preservation reserve fund, arts and cultural programs fund, assessment revenue fund, arts in public places fund and technology and infrastructure fund.

"It accomplishes two different objectives," Kennedy said of the plan. "It does help restore the fund balance, and it also brings our budget reporting and (finance) reporting closer together."

Council member Darden Rice said it makes sense to report reserves "in a more consistent way." She said she still has questions about the 5 percent target, wondering if that wouldn't cause "over-budgeting."

She and others said they still want to see how the administration will address projected shortfalls in reserves for this year.

If the proposed new formula was applied to last year's budget, the city would have exceeded its 20 percent target. However, it will still be about $2.4 million — or 6.1 percent — short of the target for 2014, the memo said.

"In this case, I'm comfortable in the shift," said council member Amy Foster. "But it doesn't solve the problem of still needing to put some money back into reserves."

St. Petersburg officials concerned about city's rate of saving 04/09/14 [Last modified: Wednesday, April 9, 2014 11:34pm]
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