Board of Aldermen — 9/26/17 Page 9
estimating health care use by a group of thousands of employees. It’s not like they are doing
anything intentionally. They are trying to come up with the best estimate they can. They are trying to
be reasonable. They don’t want to over appropriate but because we were under, the estimates were
low two years running, 17 more than 16, we increased the appropriation by $3.6 million. In terms of
the Cap that could have equaled the whole Cap. It’s alot of money. But it just didn’t seem
responsible to continue to draw down on the reserve.
Alderman Deane
The amounts that were given to you by those who looked at working rates and what our sum total
estimate was going to be, were those followed? Have you followed?
Mayor Donchess
Yes.
Alderman Deane
| wonder if they were followed previously because you end up having a problem that escalates.
Mayor Donchess
They were.
Alderman Deane
Instead of budgeting, you draw out of reserves to make up the difference so you can maintain these
2.1 percent tax rate increases and a small reduction on fund balance to cover the cost. Down the
road somebody has to be responsible and say we can’t continue to underfund this area and rely
solely on reserves. If you do run into a catastrophic issue and you have no reserves, you have a big
problem.
| think the Mayor has done a great job with all of this. You can only fool yourself by continuing to fund
out of reserves. | am a strong supporter of unassigned fund balance. | know there are a lot of people
in this room that hate bonding. They don’t think it is any good. | don’t really have a problem with
making those down the road pay for a little bit. Why should we use all of today’s cash? Our
unassigned fund balance and the way we have operated has returned dividends on the interest rates
that we pay when we sell our notes. Having the kind of money sitting in the bank and having the
fiscal responsibility that this Board has and the Mayor has has paid dividends. It saves us millions of
dollars in interest, and we're getting a lot of projects done.
Alderman Schoneman
| appreciate the research that Mr. Teeboom did and the Mayor’s answers. | think they both make sense. |
understand some of the shortfall information may have been that Mr. Teeboom had. | understand this is how
we’ve done it before, but the Mayor suggested that we have legal take a look at it. | hope we can do that just
to make sure that we are in compliance with whatever the rule says. | support this, but going forward if that
could be done, | think that would be valuable to the city.
