The city should use the Reserve, or budget surplus

The City currently carries a contingency, or reserve, in the General Fund budget. This reserve is to be used, in the City’s own words:

 “The contingency is necessary because Pleasant Hill is so dependant on sales tax, 33% of the General Fund revenues. If there were a recession, or the city were to suffer the loss of one or more of the major retailers, Pleasant Hill’s financial position would be significantly affected.” – from the Budget Document (emphasis ours)

 
We agree with this strategy and applaud the City for having it in place. Now that we are in a recession, we believe it is time to utilize the reserve, as it is intended.

 The Council has stated its desire to maintain a minimum of $8.3 million in the reserve fund. The balance currently shown for fiscal year 2010/11 is $10,258,695, a surplus of $1.9 million above its desired minimum. If the City were to apply reserve funds to balance the budget for 2010, they would reduce the reserve by $600,000, and still have $1.3 million ABOVE their targeted minimum. Apply reserve funds to next years (2011) budget shortfall of $300,000 and the reserve fund would still have $1.0 million  over and above its targeted minimum. Go one step further and apply reserve funds to the budget shortfall in 2012 of $800,000, and the reserve fund would still be $200,000 ABOVE the Council’s desired minimum of $8.3 million!

SO WHY ARE THEY ASKING FOR A PERMANENT TAX INCREASE?