Last week the City of Oakley mentioned in their weekly outreach email that they had an excess of 30% reserve but they failed to state exactly what that numbers are or what it meant to City residents. It turns out the reserve is actually at 35% which is nearly $2 million higher than required per city policy.
This reserve is unhealthy because its too high and the council should begin at looking how to reinvest the peoples money back into the community which benefits everyone in the community.
Here is what last weeks email said:
While Oakley has experienced the effects of the recession like other cities, its conservative financial management approach has allowed it to navigate the difficult times making the necessary short ‐ term adjustments without having to ask its residents for new taxes and still maintaining a strong fund balance (savings account) that represents a reserve of over 30%.
This is all only accomplished with strong and prudent leadership from the current and previous City Councils, a lean and dedicated staff, and a community that works well together and doesn’t demand a level of service that can’t be afforded. Home values are up, crime is down, the Downtown and other neighborhoods are revitalizing ‐ we are embarking on a growth phase and Oakley’s best years are certainly ahead of us.
I asked the City Manager Bryan Montgomery to clarify what “more than 30%” means, he sent me a 178-page document and said the best place to look was within their financial documents. Mayor Kevin Romick was a bit more kind in sending the same document but stating the answer was on page 5.
According to the document provided by both Oakley City Manager Bryan Montgomery and Mayor Kevin Romick , the city has a General Fund Budget that is $13,237,311 in estimated revenue and $13,200,058 in proposed expenditures—so at least we are not losing money.
As for the available fund balance (reserve), it’s expected to be just over $4.6 million—or 35%. By June 2014, it’s expected to exceed $4.8 million. The problem with this is the City has a goal of just 20% which means there is nearly $2 million more in the reserve fund than needs to be.
Mayor Romick explained this was higher than required just in case they had to pay back any redevelopment agency money used on the Downtown from the state should they request it back. Councilwoman Diane Burgis gave a similar explanation.
Sounds valid, but the truth is the State may not even sue Oakley for the money and if they did, the City of Oakley could also workout a low interest payment plan.
While I am certainly not going to advocate for reckless spending or “just because” spending, there certainly needs to be discussion by the Oakley City Council of how the City can begin spending down some of the reserve to help improve Oakley in a variety of ways–starting with our local businesses and bringing more folks to Oakley.
By investing in our local business community such as increased signage, tenant improvements, marketing/outreach to the community, an increase of traffic would also help bring in new businesses and equate to an increase in sales tax which only benefits the City of Oakley and refills the general fund and reserve.
It would be prudent to also look at new ways to expand youth programs, revamp our city recreation department, improve senior offerings, further invest in our police department, horticulture programs, and further improve city beautification on “problem areas” around town.
By holding onto the “peoples money”, the council is not being responsible to the folks who elected them to office as the reserve is too high when an economy is already improving.
The council should considering getting to work on behalf of the people instead of the protecting Oakleys’ bank account. By investing back into the community, everyone wins at every level.
By Michael Burkholder