Manteca is going to keep squirreling away money for reserves but it is going to do so in a manner that will provide a cushion against rising pension costs as well as provide elected officials with a significant discretionary pool of money that could address a wide variety of community issues as they arise throughout the year.
In short, it would allow the council — and therefore the city — to be more flexible and responsive to community issues that pop up that require spending money beyond what has been budgeted. Based on this year’s budget, if the policy changes had been in place it would have created an unassigned pool of funds of $1.4 million as opposed to $170,882.
The fine tuning of the city’s general fund reserve policy is part of the first municipal budget being developed on City Manager Tim Ogden’s watch. The council earlier this month indicated they favored the changes during a budget workshop that is the precursor to rolling out a preliminary spending plan on May 7 for the 2018-2019 fiscal year that starts July 1.
If implemented, it would pump up the unassigned reserve that the City Council could tap into for discretionary projects. In the past there have been undesignated reserves per se but that they were generally in the low six figures and were the first tapped when budget adjustments have to be made for spending concerns driven by needs identified by staff for day-to-day operations.
For at least the last 28 years, the City Council basically had a “once-a-year” window to add what could be described as community quality of life expenditures. That was at budget time. While they could adjust spending within the budget, adding any other initiatives such as fast tracking downtown alley work, funding a park project that neighborhood groups may push for or other one-time expenses to address relatively small scale community needs and wants essentially could only move forward during the formal budget process.
Ogden was able to propose the reserve policy change by shifting away from a position the council adopted three years ago on the advice of then City Manager Karen McLaughlin to funnel the residual property tax from the redevelopment agency property taxes into a reserve she recommended creating that was dubbed the “economic revitalization” reserve.
The money is the city’s share of property tax that would have gone to the RDA. Without the RDA that money would have continued to flow to the general fund between the mid-1980s when the agency was formed and until it was disbanded several years ago by the state.
McLaughlin viewed this as “new money” that could replace the economic stimulus function of the shuttered RDA after noting “we got along fine without the money” for years. It is money, if the city had access to it instead of it being diverted to the RDA that would have paid for day-to-day government services such as police, fire and streets. Some residents took a dim view of that stance arguing that Manteca wasn’t getting along fine as it could easily have covered the salaries of four to six additional police officers of have funded street work.
When the economic revitalization fund was created three years ago, the annual RDA residual was $800,000 a year. It is now at $1.2 million a year and will continue to grow as property values increase on impacted properties that were once part of the RDA.
If the new reserve policy as outlined by Ogden were retroactively applied to the current budget, the council would have an unassigned fund of $1,471,135 to draw upon as opposed to $170, 882.
There also would be $1,908,245 for pension stability. That would provide a source of funding to cover pension costs for a year should the economy take a dive or allow the council to seize opportunities to “buy down” future interest costs associated with pension payments.
Overall general fund reserves would still be at $26,044,281.
Instead of having a fund of 25 percent of the operating expenditures (the overall general fund budget is $38 million) for fiscal stability, cash flow, and contingencies as well as a fund of 10 percent of operating expenditures for economic emergencies, the economic emergencies fund would be eliminated and the fiscal stability fund increased to 30 percent.
Ogden told the council at the workshop that the two funds are essentially the same.
Going forward caps would be placed on the economic revitalization fund at $3 million, on the capital facilities fund at $1.5 million and the technology reserve at $1.5 million.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com