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Longview council weighs raising minimum general‑fund reserve to 15%
Summary
Finance staff told council that a 15% reserve target aligns with GFOA guidance and supports the city's AA rating; staff said Longview’s current fund balance would meet the target and leave several million above the minimum.
Finance staff told the Longview City Council on Thursday that raising the city’s minimum general‑fund reserve to 15% would align with recommended practice and help protect the city’s credit rating.
Angela Cohen, the city’s director of finance, said the Government Finance Officers Association recommends holding cash to protect against revenue declines and emergencies and that credit rating agencies consider reserves when assessing debt costs. "Currently, with Standard and Poor's, the city maintains a AA stable credit rating," Cohen said, noting that Longview had maintained reserves above 10% historically.
Cohen provided a snapshot of the numbers the administration used: an estimated full‑year fund balance of approximately $23.6 million and a 15% reserve requirement equal to roughly $15,000,000, which would leave about $8.6 million above the proposed minimum under current estimates. Council members noted recent and incoming capital items — including a lower bid on a pool project and a $3 million Texas Parks and Wildlife Department grant — that would affect near‑term cash flows and said they wanted to schedule a vote soon.
Councilmember comments reiterated that setting a 15% minimum is a conservative approach that could protect the city's credit standing and help smooth costs for expensive, intermittent capital needs such as fire engine replacements. Staff said they would bring the reserve‑minimum change back for formal consideration at a future meeting.
No formal action was taken Thursday; staff said they expect to return with an ordinance or resolution for council consideration.
