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Council tables reserve-policy increase but approves $5 million fire apparatus replacement fund seed
Summary
City staff proposed increasing the general fund minimum reserve from 10% to 15%, but the council voted to table that ordinance for 30 days. The council approved an ordinance allocating $5 million from fund balance to start a dedicated fire apparatus replacement program.
City financial staff told the Longview City Council on Oct. 9 that the city’s projected general fund balance is about $23.6 million and asked the council to consider raising the formal minimum unassigned fund balance from 10% to 15% of annual operating expenses.
Finance Director Ronald McPhee (presenting) said increasing the minimum reserve is a conservative step to protect the city’s credit rating and provide a financial safety net; he also described a $5 million proposal to seed a dedicated fire apparatus replacement fund to provide predictable replacement of life‑safety equipment. “Increasing the required minimum is a strategic fiscal decision and conservative action to protect the city's financial position,” McPhee said.
Council discussion centered on timing and grant certainty. Several councilmembers expressed concern about raising the formal policy before state grant outcomes — including a $3 million state reimbursement and a pending Cotton Street grant — were confirmed. After discussion, Councilmember Mark (moved/seconded) moved to table the ordinance to increase the minimum unassigned fund balance to 15% for 30 days; the motion passed.
Separately, the council considered an ordinance to amend the 2025–26 budget to allocate $5,000,000 of fund balance to establish a fire apparatus replacement fund. Councilmembers discussed alternatives and financing details; staff said the $5 million seed would allow planned replacement on a schedule and avoid large unfunded spikes in future budgets. The council voted to approve the ordinance to allocate $5,000,000 to the fire apparatus replacement fund.
City staff described that the city had saved approximately $4.5 million relative to prior estimates on recent projects (partly due to a $3 million state reimbursement) and that, even after the $5 million allocation and the proposed 15% reserve level, the city would retain a multi‑million‑dollar cushion for one‑time needs under current projections. Staff said Cotton Street and other pending grants could further change the projection but recommended moving forward with the fire fund seed while the council considered the reserve policy.
Action summary: Council tabled the ordinance to raise the minimum reserve to 15% for 30 days and approved the $5 million allocation to create a fire apparatus replacement fund. Staff will continue to pursue related state grants and return with further information.
