By Adam Swift
A new stabilization fund will set aside a percentage of the city’s free cash to help cover the costs of unforeseen or emergency drainage, stormwater, and culvert repair projects.
The council approved the establishment of the stabilization fund last week, agreeing to fund it with 10 percent of the city’s certified free cash amount.
The fund was initially proposed at a 20 percent rate of free case, but city finance director Richard Viscay said he had some concerns about the level of funding given the other stabilization fund commitments taken on by the city.
“We did get our free cash certified (for Fiscal Year 2024) on the 15th of February for $3.66 million,” said Viscay. “Through city ordinance, we put 20 percent into the capital improvement stabilization, 15 percent into our general fund stabilization, and we put 10 percent into our affordable housing trust fund. All three of these are by city ordinance.”
In addition, the city also recently established a high school stabilization fund seeded with 10 percent of the free cash, and it makes a $250,000 contribution to post-retirement benefits.
Of the $3.6 million in free cash, Viscay said there is currently $1.4 million remaining.
“Am I a little hesitant to put another 20 percent in free cash towards that?” Viscay said. “Yes, in some respects, because that free cash helps us at the end of the year when we have maybe utilities that might run high, or we have some kind of extraordinary, unforeseen event that we have to keep within the balanced budget.”
Viscay said the council might want to consider stepping back and look at the overall policies and percentages for all of the stabilization accounts if it wants to add another account into the mix.
“I think it is a noble, worthy cause to try to save money, it helps our bond rating and it serves the city well, but I would be hesitant to say put 20 percent of the remaining balance in,” said Viscay. “I think maybe we should look a little bit at the overall distribution of free cash as it comes and what our policies are, and adjust accordingly.”
Ward 4 Councillor Paul Argenzio, who chairs the legislative affairs subcommittee, asked if there was capacity with the remaining certified free cash to fund the new drainage repair account at 20 percent.
Viscay said there is the $750,000 available to fund it, but that it would leave the free cash account with about $600,000 remaining for any unforeseen FY24 bills. He recommended a vote to establish the account this year as a good first step, with a further discussion in FY25 on the funding level.
Argenzio suggested the stabilization account be funded at 10 percent of the certified free cash, a move the council agreed with. He noted that the council can always come back to adjust the amounts for all of the city’s stabilization accounts.
“I think 10 percent is a reasonable amount and does not constrain anything in the future, and if we want to put more in later, then we can do it,” said Councillor-at-Large Anthony Zambuto.
