City Council Votes for Stabilization Funds, Solidifies City's Financial Future
Today, in a 7-0 vote, Cincinnati City Council approved the Administration’s recommended policy for the management of the unrestricted fund balance, otherwise known as the “Stabilization Funds” policy.
City Manager Harry Black applauded Mayor John Cranley and City Council for their strong support of the proposal.
“Because of the actions of the Mayor and Council, we will continue the progress we have made over the past year to improve Cincinnati’s long-term financial footing,” Black added. “And we do so with fewer fears and apprehensions about the “what-ifs” and unknowns.”
Black, who has extensive experience in municipal finance believes, “these funds are essential to helping the City Government maintain adequate levels of fund balance to mitigate current and future risks.
This action, in conjunction with the other steps we have taken such as pension reform, increased fleet and infrastructure spending, and the second structurally balanced budget in a row places us on more solid ground financially. We are moving beyond a sustainable structurally balanced budget and unlocking additional potential. This means we can be more resilient and strategic in how we invest in our city.”
Approval of the Fund Stabilization Policy means:
- The City will keep two months of estimated revenues in the unrestricted fund balance, or about 16.7 percent of the general operating budget.
- The City’s rainy day fund, known as the Working Capital Reserve, will be increased to 8 percent of general operating revenues by the end of Fiscal Year 2017.
- 1.25 percent of estimated general operating revenues will be transferred to the General Fund Contingent account for bad weather events and other one-time events by the end of Fiscal year 2020.
- Part of the Stabilization Fund includes the Emergency Reserve account, which is funded at 0.66 percent of estimated general operating revenues. Money in this account will go toward helping the City recover from major and unforeseen disasters.