Rainy-day fund to run dry

 

Rainy-day fund to run dry

 

Date: April 30, 2009
by: Robin Roy | City Editor

 
 

A special fund the city created in July to make up for lost revenue during the economic downtown was intended to last two-and-a-half years, but an unexpected decline in several revenue sources may completely tap the fund a year early.

City Finance Director Chris Lyons said he anticipated using $1.3 million from the $2.9 million Budget Stabilization Fund this fiscal year. He revealed last week that the city might need to use double that amount to shore up a shortfall in four revenue streams: half-cent sales tax, state revenue sharing, investment earnings and electric franchise fee (see box).

“It’s not possible that the $2.9 million will last two-and-a-half years,” Lyons said.

City Manager Bob Bartolotta anticipates the stabilization fund will run out of money by January 2010.

“We’ll be without a safety net then,” Bartolotta said.

But Lyons said he’s not worried about the financial situation when the fund runs dry, because the city maintains a $15 million balance in its general fund reserves, which go to such things as payroll and utilities.

“It’s not that risky,” Lyons said. “We still have a pretty sizable (general) fund balance.”

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