Explanation
Background: The City of Columbus established the Economic Stabilization Fund (or "Rainy Day Fund") in 1988 to provide for the continuation of basic services during times of economic recession or unexpected revenue loss. The fund was first utilized in 2003. During the period from 2003-2009, over $91 million was transferred into the general fund in order to avoid drastic reductions to city services in those years.
In 2009, the city made a commitment to the residents of Columbus to restore the fund balance of the Rainy Day Fund to $50 million by 2014, via resolution 0178X-2009. Having achieved that goal, City Council and the Mayor set a new goal in 2013, via resolution 0013X-2013, of achieving a fund balance of $75 million by the end of 2018, a goal which the city will surpass.
As responsible stewards of public funds, the city has an obligation to plan for the economic uncertainty that results from recessions, natural disasters, or catastrophes, and to sustain basic city services in the face of such challenges. Through the adoption of this resolution, both the Mayor and City Council reaffirm the goals, purposes and objectives of establishing, maintaining and protecting the Economic Stabilization ("Rainy Day") Fund.
In addition, this resolution conveys the intent of the City to establish the goal to achieve a balance of $80 million in the fund by the end of 2020.
Title
To reaffirm the role of the Economic Stabilization Fund ("Rainy Day Fund") in allowing the City to maintain and continue basic services during an economic downturn, natural disaster, or catastrophe and to establish as a goal a balance of $80 million in the fund by the end of 2020.
Body
WHEREAS, the City of Columbus established the Economic Stabilization Fund (or "Rainy Day Fund") in 1988 (Ordinance 0860-1988, passed April 11, 1988) to provide for the continuation of basic services during times of economic recession or unexpected revenue loss; and
WHEREAS, at different times since its establishment these funds have been utilized due to continuing deteriorating national, state or local economic conditions; and
WHEREAS, the city has met and surpassed the commitments made in 2009 and 2013 to restore funding to the Rainy Day Fund, and now intends to achieve a greater fund balance; and
WHEREAS, in keeping with sound financial practices, and consistent with the need to protect city finances during extended economic downturns or times of extreme emergency created by unexpected events, it is important that the City budget and plan for the possibility of future fiscal challenges; and
WHEREAS, in recognition of the city’s strong fiscal management, the City of Columbus has consistently maintained the highest bond ratings from the three major bond rating agencies; and
WHEREAS, the maintenance of adequate general fund reserves is a key factor used by these rating agencies in determining the overall credit worthiness of a city; now therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the cash balance of the Economic Stabilization Fund shall reach $80 million by the end of 2020.
SECTION 2. That this resolution is shall take effect and be in force from the earliest date allowable by law.