Poway to free up $16 million in reserves
It’s time to reach “under the mattress” and put about $16 million in city reserves to work, the City Council decided Tuesday night.
Although no formal vote was taken, all five councilmembers expressed a willingness to reduce the amount of money set aside over the years, from $33 million to about $16.7 million. The agreement came after the council reviewed a commissioned report from the Government Finance Officers Association that recommended the city keep between $12.5 million and $19.4 million in reserves, depending on the council’s risk comfort level.
The money has accumulated over much of the city’s 35-year history, largely as a result of having conservative fiscal spending habits.
How the $16 million will be spent will be determined by the council later this year. Scott Edwards, the city’s director of administrative services, said he will present the council with a suggested prioritized spending list. The emphasis will be on one-time expenditures rather than funding something that will require ongoing fiscal support, he said.
Spending some of the city’s vast reserves has been discussed by previous city councils over the years, but nothing was ever done about it.
According to Edwards, Poway currently has $23 million in a undesignated general fund balance, $2.4 million in a “pension stabilization fund” (established in 2010), another $3.1 million in an “economic uncertainly fund” (2002) and $4.5 million in a “streets maintenance fund” (2008). In addition to the $33 million listed, the city also has another $1.6 million left over from unspent capital and program budgets and loan repayments, he said.
The $33 million in assigned reserves represents 82.5 percent of the city’s annual operating expenditures. The city has a policy setting a minimum of 25 percent in reserves.
Edwards was recommending the city keep reserves at 38 percent, or $15.4 million. That was a little thin in the minds of all five councilmembers.
Mayor Steve Vaus and Councilman Dave Grosch supported having reserves of between 45 and 50 percent ($18-$20 million) while Councilmen Barry Leonard, Jim Cunningham and John Mullin favored either 40 or 45 percent. From those comments Edwards said he will return to the council next month with a revised policy setting the minimum at 45 percent.
Cunningham said it was time to city started putting “funds tied up under the mattress” to work in the city. Vaus picked up on that theme when he remarked it was time to “put it to work for the good people of Poway.”
