Tonight the council members, city staff and mayor met from 5pm - 6:30pm to discuss upcoming funding priorities for the City's Capital Improvement Plan, or CIP. These are all the "one time" projects the city is considering, like purchasing of major equipment (like a new $500K fire truck) or building new parks or reconstructing roadways. I really enjoyed the philosophical aspect of the discussion, and the council members all had some great points, even when I didn't agree with them.
One of the most interesting takeways (ie. points to ponder) is the question of whether or not tax revenue should be kept in reserve for emergencies. The city has a Flood Reserve Fund, which is recently been changed to the Emergency Reserve Fund. Having a background in disaster response and recovery, I believe there's merit in keeping a certain level of money in reserve for catastrophic events...enough to cover the cost of a major disaster in the absense of outside reimbursement. FEMA has provided reimbursements in the past, but I'm not confident -- given the increasing numbers of major disasters nationwide -- that we can expect that same level of support for our own floods.
Other council members said that we shouldn't be keeping this money in reserve; they believe we should use this money to fund CIP projects, because these projects are an investment in our city's quality of life, and will attract new residents and economic development. I can see their point...these capital improvements aren't just an "expense", they're meant to make our city better.
I'm going to come at this by looking at taxpayer money the same way I do my own money. In my family, we've saved up enough to cover six months of my salary if our own disaster strikes. I know we could put that money to use in lots of other ways, but I feel a whole lot better knowing it's there. It's just a given that it's there if we really need it. I know that other people don't have that "luxury", just like other cities don't have reserve funds either. But I believe it's the discipline to have and maintain a reserve (both personally, and municipally) that matters -- and, I'll admit, more than a bit of luck.
I'd be really interested to know your thoughts on this -- should the city keep an emergency reserve to cover the cost of a disaster (city staff is recommending $2.7M)? Or should we expect our disaster costs to be covered by FEMA or other entities, and instead use these funds on city projects?