Council sets up fund for disaster recovery|Resolution calls for reserve fund totaling $2 million

Published 4:22 am Saturday, November 14, 2009

Contributing Editor

Washington’s City Council, during its meeting Monday, formalized its practice of setting aside a reserve fund to help pay for recovery from natural disasters such as hurricanes.
The council unanimously adopted a resolution that establishes a $2 million reserve fund for disaster recovery.
City Manager James C. Smith said the council’s action establishing the reserve fund “doesn’t prevent the council from reversing it in the future.”
Councilman Doug Mercer said all the resolution does is “formalize a $2 million pot” of money for disaster recovery.
The state’s Local Government Commission, which oversees the finances of county and municipal governments in the state, recommends that a local government maintain a minimum of two months’ operating expenses in its undesignated and unreserved general-fund balance. Because Washington is in a hurricane-prone region, city officials wanted to establish the $2 million reserve in the general-fund balance to help restore city services and operations until federal and state relief funds are received in the wake of a natural disaster.
Local governments are entitled to be reimbursed for some of their expenditures related to recovery efforts after natural disasters, but sometimes those reimbursements are slow to arrive, city officials said. Having reserve funds that would allow the city to begin recovery operations in the wake of a storm as it waits on federal and/or state assistance funds, city officials said.
The resolution includes the following provisions:
• That excess funds are not restricted for a specific purpose and are available for general appropriation.
• The City Council may use the unreserved fund balance in the absence or delay of federal and/or state assistance during emergency situations such as those that may arise as a result of the city’s susceptibility to environmental hazards such as hurricanes and floods and Washington’s designation as a municipality governed by the Coastal Area Management Act.
• The City Council recognizes that the unreserved/undesignated general-fund balance exceeds the two-month operating reserve recommendation provided by the Local Government Commission for similar-sized local governments by an additional $2 million for natural-disaster recovery.
Because Washington Electric Utilities’ wide service area includes customers inside and outside Washington’s city limits, it’s important the city have money on hand to immediately begin repair work on the WEU electric system after a disaster, city officials said.