The Everett City Council Committee on Ways and Means met on Monday night to consider, among other things, three requests from Mayor Carlo DeMaria’s administration to earmark approximately 50-percent of the city’s recently certified “free cash,” or unexpended fund balance, to three accounts the recently established Other Post-Employment Benefits Liability Trust Fund, the Capital Improvements Stabilization Fund and the city’s general Stabilization Fund.
Each of the OPEB Trust and Stabilization Fund requests are equal to about 15-percent of the city’s $5.4 million certified free cash amount, or $815,320. The Capital Improvement Stabilization Fund would stand to gain 20-percent, or $1,087,093.
The three requests, though potentially controversial among Councilors, are in keeping with the city’s policies for dedicating percentages of free cash to accounts that can ensure the city’s financial solvency.
During his two year tenure in Everett, City Auditor Richard Viscay has repeatedly requested that the council dedicate funds to such accounts as part of an overall approach to managing free cash and ensuring the city’s financial stability. Viscay was scheduled to appear before the Ways and Means Committee on Monday evening about the three requests.
Of the three accounts, the Stabilization Fund and Capital Improvements Stabilization Fund are the two most familiar to the Council. The Stabilization Fund is designed to give the city an emergency reserve for unforeseen expenses or to deal with shortfalls in anticipated revenues, such as the state’s cuts to municipal aid cuts a few years ago. When the city has a healthy reserve in its stabilization fund, it is better able to withstand changes in the economy.
The Capital Improvement Stabilization Fund is a similar fund that is designed specifically to deal with unforeseen expenses in capital expenses, such as a need to replace a piece of equipment, make a major repair to a building or replace a vehicle.
The OPEB Liability Trust Fund is an account established by the Council last year, to deal primarily with the future expense of rising health care costs for the city’s retired employees.