The city has been criticized for laying off workers, instituting pay cuts and scaling back its recreational services at a time when city reserve funds have never been so robust.
The solution? Mayor Rick Baker's staff wants to change fiscal policy to require city reserves to hold up to two months of operational money. The move follows federal guidelines, which recommend coastal areas squirrel away surplus cash in case of disaster.
The measure also would make it easier for the city to protect its savings. Now, the city has roughly $286 million in its reserve funds, much of which is slated for bond repayment, the city says. Many funds have no minimum requirement and far exceed national reserve standards, which means at least $70 million could be rerouted to help ease the $18 million deficit in next year's $207 million general budget. City policy states savings should be used when property tax revenue declines.
Under the proposed changes, the city would have only $10 million to $12 million above its required savings. City Council members voted Thursday to discuss the measure in October.