Janesville City Council debates use of reserve money for budget
July 22, 2013
Council members ranged across the spectrum in discussing the amount of reserve funds to be used in writing the budget.
Acting City Manager Jay Winzenz had asked for some direction from the council.
The 2013 budget used $926,435 in reserve money. The city typically returns money to that fund.
Applying reserves to the budget is a common practice, Winzenz said, and Janesville has done it since 1986.
State levy limits cap increases to new construction. In Janesville, net new construction is estimated at about half a percent for a maximum levy increase of $141,000.
Councilmen Matt Kealy and Duane Severson asked that Winzenz use new reserves in writing the proposed 2014 budget.
“If you have a household income of $50,000, you budget $50,000, not $55,000,” Kealy said, adding he wants to see what that budget looks like.
“We've been told they would not be pretty decisions,” Kealy said. “Are they? We may find some of the programs out there that have little value to the city, and it is an easy line item to eliminate. We may find that certain programs can be enhanced that are revenue generators that are not properly utilized.
“I myself am ready to roll my sleeves up and get into the budget.”
Kealy said he would consider using reserves to pay for capital projects, such as street maintenance, rather than borrowing.
On the other end of the spectrum was Councilman Sam Liebert, who favored increasing the levy to the maximum.
Using no reserves is “pie-in-the-sky fantasy world,” Liebert said, predicting services would be cut.
“At the end of the day, the city is not a business. We're here to provide services and to make lives better,” he said.
Liebert warned that he would vote against any budget that cuts police and fire.
Winzenz said using some reserve money makes sense from a budgeting perspective, but so does decreasing some of the amount the city plans to use.
To get to zero in one year, though, would be “painful for this organization. If the goal is to do that just to see what that looks like, along the way we're going to … create a lot of uncertainty and a lot of turmoil,” he said.
Councilman Brian Fitzgerald said it's difficult for him to settle on a number without looking at expenses.
“A review (of current services) is good,” he said. “Our economy is not good and hasn't been for years.”
Councilmen Jim Farrell and Douglas Marklein fell in the middle of the road, with Farrell advising against padding the budget and Marklein suggesting the city reduce the amount taken from reserves over several years.
Winzenz said that based on the conversation, he is considering using about $500,000 in reserves as a good starting point.