Lean reserve bodes ill for city

“There is no pot of discretionary money that’s being wildly and irresponsibly spent. That does not exist. And if it ever existed, it hasn’t existed in many, many years.”

Columbus Mayor Teresa Tomlinson

There have been both positive and negative economic indicators in the news lately. The Columbus Consolidated Government’s current fund balance is definitely among the latter.

This municipal “credit rating” line in the budgetary sand has been a point of concern and contention more than a few times before now, and before the current mayor, council and manager were in office. But except for a brief upward blip two years ago, it has steadily declined over the last decade. To say this is not good for the city’s prospects of affordable bond financing of future projects is to understate the obvious.

Tuesday night, city Finance Director Angelica Alexander reported to the mayor and council that the city’s reserve fund — the amount of money on hand to keep the city running in the hypothetical absence of all other funding — is the lowest it has been since 2014, when it bottomed out at 55.2 days of operating funds after the Great Recession. It rebounded to 56.1 days last fiscal year, but this year has dropped back down to 54.5 days — more than five days below the operating reserve threshold of 60 days. (In 2007, right before the national economic nosedive, the Columbus fund balance stood at 132 days, more than twice the threshold and at that time a high not seen since the flush economies of the 1990s.)

Alexander offered council several ideas for cutting costs and increasing revenues, foremost among them sticking to department budgets and using salary savings only for other personnel costs instead of capital expenditures.

The impossible-to-ignore pachyderm in the room is the litigation against the Consolidated Government, and the possibility of Sheriff John Darr’s lawsuit being rendered moot by his recent defeat at the hands of challenger Donna Tompkins, who has pledged to stay within the department’s budget. The costs of that suit to the city — which has had to pay not only its own legal fees but those of the sheriff, a constitutional officer, as well — combined with millions of dollars in department cost overruns year after year, have surely taken their toll on Columbus coffers.

But even if that suit “dies on the vine,” as the city attorney has predicted will happen, relief from that expense alone, as heavy as it has been, will not restore the fund balance to the 60-day threshold, much less give the city a more comfortable cushion.

Alexander reported about $3 million in salary savings — or about a week’s worth of fund reserve — in November, due to attrition or positions left vacant. That’s a start, but not a fix. There is not, as Tomlinson said, “going to be a quick and easy fix.”

If anybody knows where in the city the aforementioned pot of wildly spent money might be found, please let our officials in on it.

This story was originally published December 8, 2016 at 1:08 PM with the headline "Lean reserve bodes ill for city."