WEB EXCLUSIVE: Metro has $97 million in rainy day fund
Mayor Jerry Abramson has been saying Louisville Metro government has $65 million in its “rainy day” fund, money he does not want to tap into during this economic crisis. But in fact, the city has more than $97 million it its emergency fund.
After criticizing the mayor earlier this week for not giving Metro Council a larger role in fixing the city’s the $20 million budget shortfall, Council Republicans were dismayed to learn the full amount of the city’s rainy day fund is $32 million more than previously reported.
According to the city’s annual Comprehensive Annual Financial Report, Metro’s unreserved fund balance is $97.2 million. Since the budget shortfall was announced, the mayor’s office had said the rainy day fund was $65.4 million, which is about 13 percent of the city’s general fund budget.
“They won’t tell you what it’s designated for,” says Councilman Kelly Downard, R-19, referring to the additional $32 million. “Ostensibly it’s for lawsuits and other potential liabilities they know are going to be there. But they won’t tell us what it is.”
Downard says the mayor should trust the Budget Committee enough to have a closed hearing to disclose why $32 million of the rainy day fund is restricted, adding that it is misleading to say Metro government only has $65 million.
On Thursday, LEO Weekly filed an open records request with the mayor’s office to find out what the extra $32 million has been earmarked for, and to determine the exact amount of the reserve fund.
In response, Chris Poynter, a spokesman in the mayor’s office, said in an e-mail that the $32 million in restricted funds includes the Metro Council’s Neighborhood Development funds, dollars to match state and federal grants, and money reserved to pay for ongoing construction projects. He also said that using these funds for the shortfall would not be a responsible approach and, in some cases, would violate laws and contracts.
“The Mayor believes we should first reduce government spending to address the shortfall before tapping into the fund, which is intended for use in catastrophic times to pay salaries and operating expenses and avoid plunging the city into bankruptcy,” says Poynter.
Meanwhile, leaders of the police, fire and corrections unions — joined by businessman and Republican contributor Larry Bisig — held a press conference asking the mayor’s office to hold off on budget cuts to allow a full review of the city’s financial books.
“We’re convinced that full disclosure and transparency is the only way to ensure our citizens can trust the process,” Bisig says. “Therefore, we respectfully ask the mayor’s office for a 30-day moratorium on implementing budget cuts.”
Volunteering as a “peacemaker” in negotiations with the mayor’s office, Bisig says there is an acute distrust between public safety employees and the mayor.
“I think it’s important for the community to understand that our men and women in uniform have become dismayed and disillusioned over the past several years,” he says. “There is a prevailing feeling that our public safety servants are the first to be asked to sacrifice when they already sacrifice so much including their lives every day for us.”
During last year’s $13 million budget shortfall, however, the mayor exempted police and fire from budget cuts.
Since announcing the city’s $20 million shortfall, Abramson has made a number of quick unilateral decisions — a hiring freeze, spending restrictions, three days of unpaid furloughs and pay cuts for his highest-salaried personnel — to squeeze Metro government for any loose change. He has since announced cuts to numerous services, and more are expected.
In response to the proposed moratorium, Abramson released the following statement this afternoon: “I’m deeply disappointed that the police and firefighters unions continue to refuse to acknowledge the economic problems that are gripping this nation. I’m baffled by their unwillingness to join with other employees and citizens to be part of the solution to the most serious financial challenge to our city in decades. I’ll meet with Chief White and Chief Frederick soon to discuss our next steps.”