Council disagrees over funds
Buckhannon City Council members battled amongst themselves over what should be done with $140,000 that had yet to be appropriated in the current budget.
The recommendation made by City Administrator Michael Doss during last week’s council meeting was to put the money into a rainy day fund. Money in the rainy day fund could help the city in the event of an unforeseen disaster or large expense. The money set aside in the rainy day fund for municipalities cannot exceed $800,000. The transfer of the money in question would bring the current rainy day fund up to about $500,000.
Councilmen Dave Thomas and Ron Pugh had other ideas for using that excess revenue. They said they would rather see those funds pay off some of the higher interest debt from past vehicle and other purchases.
“It’s a no-brainer to me,” Pugh said. “You pay off the debt you have now and pick up the savings, putting some aside too every month.”
Thomas said paying off the debts “makes more sense financially. We have to look at the incremental difference.”
Their idea would not prevent the money from eventually going into the rainy day fund. Instead of placing the funds directly into a rainy day line item, the money saved from the monthly debt payments could progressively be put toward the rainy fund each month. Paying off debts earlier also could save the city money that would be charged through interest rates over time, Pugh and Thomas said.
“It’s a wasted resource not to do it, and that’s my opinion,” Thomas said, adding that he still strongly agrees with the city’s goal to increase its stabilization fund. Both ideas could still have the same result, but the immediacy of that result differs, he said.
“We’re not paying for cruisers and interest rates out of the rainy day fund right now,” Pugh said.
Mayor Kenneth Davidson said that if an emergency occurred while the city tried to pay off the debts, the city council may not have the money to place in reserve. He said he was in favor of immediately setting the money aside.
Doss reviewed some of the city’s debts and discovered that the city could save about $10,000 to $12,000 over a varied number of years due to differing loan terms. He said there has been no difficulty paying the required monthly bills for those debts.
Thomas and Pugh were outvoted when they voted against a motion to transfer the money to the rainy day fund. Recorder Rich Clemens reminded council that 2012 yielded two major storms, and Buckhannon is still recovering from Superstorm Sandy despite the early warnings.
“We don’t know what tomorrow is going to bring,” Clemens said.
Even at the maximum amount, the rainy day fund could only support the daily functions of the city for three months.
“We’re not in a doomsday scenario,” Thomas said. “Maybe we will be four or five years from now, but we’re not facing that right this minute.”
Most council members agreed that it was more important to build the rainy day fund than to pay off the debts at this time.
“I am not comfortable with not having a respectable reserve,” Davidson said.
City Council also approved its upcoming fiscal year budget during the meeting. At a previous meeting Doss said that the budget for the upcoming fiscal year did not include money that could be available for the rainy day fund.