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Council debates fund balance

 


At last Monday’s workshop meeting, a proposed change to the city’s fund balance reserve policy from one month to two months sparked debate.

Four council members expressed preference for using the funds for projects for public safety, such as police, fire and sidewalks.

Jan Schuette, Debora Nelson, Jesica Stickles and Chris Raezer all expressed concern, based on a discussion three years ago that one month reserve is adequate.

Schuette expressed her preference for supporting police and fire “before stockpiling money.”

Raezer expressed concern about investing all extra money in police and fire.

“We need quality of life stuff, too,” Raezer said.

Nelson noted the city’s need for safe streets and crosswalks, another aspect of public safety.

Nelson asked what projects would be put on hold to accommodate the savings.

Stickles acknowledged that the city had already met its 10 year plan in three years, due to economic growth.

Due to retail sales tax growth in recent years, the city already has six weeks in reserve.

Finance Director Kristin Garcia explained that it takes 90 days to adjust to a cash shortfall.

City Administrator Paul Ellis explained that the current “windfall” is not likely to continue.

Council members Mike Hobson and Sue Weiss agreed that two months reserve would be required to survive a crash of the economy, but Weiss wondered why the concern about funding police and fire when it was “not high on the agenda last fall.”

In the considerable discussion, they discussed the long-distance goal for accomplishing the two-month reserve might be appropriate, to ensure stable service delivery and protect against financial instability.

The proposed update sets the goal of Dec. 31, 2022 for the change, but council discussed setting it at 2025.

One month reserve amounts to $1.3 million in the general fund month ending balance and two months would be $2.6 million, Garcia said.

Another controversial issue that attracted more than 10 residents to the workshop meeting last Monday, council discussed two amendments to the city’s comprehensive growth plan. A rezone from residential moderate density to residential high density requested by AVS Communities for a development north of the Stillaguamish Senior Center drew no debate, but a similar rezone at Highland Drive and Stillaguamish Avenue did not settle so well.

While staff recommended both rezones to meet future population goals, the rezone requested by Greg Stewart for a 2-acre lot at 606 E Highland Drive, drew concern about adding more traffic to Highland Drive and changing the nature of old town. The land south of the 2-acre lot is already zoned high density.

 

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