On Thursday night, the La Crosse Common Council approved a resolution to reduce the amount of money in the city reserve fund.
The reserve fund will now hold 20 percent of the annual operating budget instead of 25 percent. What does this change mean for taxpayers? The five percent translates into nearly $5 million that will pay for other city projects.
It was a historic moment when the council members approved the reserve fund reduction in a 9-3 vote.
"That 25 percent policy has been in place for many, many years," said La Crosse Mayor Tim Kabat.
The previous policy required 25 percent of the operating budget to be put aside to use in an emergency.
"We had $22 million dollars in the reserve going forward," said Andrea Richmond, Council Member for District 1.
The new policy will lower the reserve threshold to 20 percent of the budget, freeing money to be allocated for other uses.
"I think taking a good hard look at the amount of money that we keep in the bank for a rainy day fund is important," said Martin Gaul, Council President and Member for District 11. "We have to make use of those funds if it's judicious for us to do so, and that's what we're doing."
A number of big projects have been brought to the Council's attention as possible uses for the extra money including the much needed road repairs, maintenance of the current fire stations and addition of a fifth station, moving forward with Memorial Pool, and updating city parks.
"Using these funds for projects that are in front of us keeps them out of the operating budget," Gaul said. "I think it's an important component of us going forward in an efficient fashion."
"If we have a disaster of some sort--whether it's Bliss Road or a tornado like we had one in 2011--we need those funds desperately," Richmond said.
Richmond opposed the resolution believing the risks to be greater than the benefits.
"We want to protect our AA Bond rating, and when they come in and take a look at our spending, they'll say, 'What was all of this money used for?'" she said.
"Everything we do has an impact on the city," said Gaul. "However, the recommended level is about two months from the Government Finance Officers Association. At the previous level of 25 percent, we were 50 percent over, and frankly, I don't think we could leave that much money laying on the table."
City officials on both sides of the issue believe it comes down to doing right by the taxpayers.
"We need to tighten our belt, and we just kind of have to take a look at every item that goes forward through the Council," Richmond said.
"I am pleased that it is moving forward," Kabat said. "I do believe we have a very strong financial system in place. We take that responsibility very seriously to make sure that we are only levying what we need to provide our programs and services."
A two-thirds vote will be needed by the Council to officially reallocate any funds.
Council members also approved combining some city departments in Thursday's meeting. The Assessors Department will merge with the Planning Department, and the Human Resources Department will join the Finance Department.
The reorganization will save taxpayers an estimated $200,000 in the next year.