City Budget and the use of Savings

Rightfully so, there is currently debate in High Springs about our City budget. The City recently adopted a policy that will prevent what happened in a nearby community - where the City Manager all but depleted the Reserve Funds to operate the city. The new High Springs policy (the idea of Commissioner Shupe) was to establish a MINIMUM amount of Reserve (savings) that the City must maintain. The minimum established was two months operating income based on the coming fiscal year. This year that amount is just over $630,000 ($315K per month).

The audited balance of the City of High Springs current Reserve is approximately $1,100,000.00. Yes, we currently have "saved" almost twice the amount our new policy says we need in the event of an emergency.

Each year as part of planning for the City budget certain "contingencies" are allowed for in a number of different areas. The City Manager cannot spend this money with out approval from the City Commission. These monies are to be available in a "worst case" situation - a fire truck is totaled while responding to an accident, a sink hole opens up on Main Street in front of City Boys, the water tower requires emergency repairs that were not budgeted for, etc. Something that MIGHT happen probably won't but sometimes does. Each year allowances for these things are made and the city allocates some portion of the "savings" to cover these types of costs.

In the history of the City all of the money allocated from savings has never been spent. In the last three years NONE of the money was spent. In fact, last year almost $80,000 LESS was spent than budgeted so that the City's "savings" INCREASED another $79,000 - with out touching reserves.

This year the City is allocating $361,000 of "savings" for use in the coming budget. Last year this number was approximately $250,000 (and none of it was touched). With revenues down (from sales tax, property tax, etc.) the City is expecting, for the first time, to actually have to spend some of the savings on operating expenses. Something that is being planned for and budgeted for. It is estimated that only about $60,000 of the $361,000 will be used for the operating of the City. The rest of the money is for things that "might happen". If any of the reserves needed to be spent the City Manager would need to make the Commission aware and in most cases secure the Commissions approval.

We have $1,100,000 in "savings" and have established a minimum need of $632,000 for the coming year. If all of the worst-case scenarios come true this coming year and the City spent every dime that has been allocated (including the $361,000 in the reserve) we would still have $107,000 in our "savings".

Why has the City continued to save and build reserves if not for the purpose of dipping into them during down economic times? We established a minimum Reserve Level how about establishing a "maximum"? How bad a gloom and doom situation are we saving for? How bad does it need to be to justify spending 5% of the savings ($60,000 of the $1.1 Million)?

The realistic facts for someone reading the Independent Audit and looking at the performance of the City's Finance Department and Staff indicates High Springs is on solid ground and making good decisions.

Of course, there is always another angle to the story... All of this "responsible spending" and saving comes at a cost. The City of High Springs is NOT spending money on Capital Projects - including some routine maintenance. As a City Commissioner I will be an advocate for responsible savings but also the reinvestment of tax dollars to maintain the City's property and infrastructure.

As a Commissioner, I'd also advocate looking at creative ways to use the CASH on hand the City has to reduce or eliminate some of the interest being paid on loans (police cars, fire trucks, light poles, etc.).