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Tahlequah council debates reserve-fund rewrite that would cap stabilization fund at 15% and set 23% total reserve cap
Summary
City staff presented a proposed amendment to the reserve funds ordinance that would combine operating reserves, cap the net stabilization fund at 15% and set a total reserve cap of 23% of expenditures; councilors asked for clarifying language and took no final action.
City Administrator Taylor presented a first reading of an ordinance amendment on May 5 that would rewrite how Tahlequah manages general-fund reserves and a separate net stabilization fund.
Taylor said the existing 2016 ordinance designates a 5% operating reserve and a 3% emergency reserve in the general fund, plus a net stabilization fund of 4%–7% (for a combined 12%–15%). The city’s proposal would consolidate the two general-fund line items into an 8% operating reserve and cap the net stabilization fund at 15%, producing a combined cap of 23% of budgeted expenditures.
Taylor and Finance staff Michelle told councilors how year-end proceeds would be allocated under the proposal: after funding the 8% operating reserve, remaining excess revenue would go toward the net stabilization fund until it reached 15% of expenditures; the policy in the draft sets a rule that 50% of remaining year-end revenues would be directed to the stabilization fund during the buildup phase. Taylor said the staff expects the 15% stabilization amount would be roughly $2 million and that a projected carryover of about $2.7 million—if realized—would meet the target when shared per the draft formula.
Council discussion covered liquidity and permissible uses. Councilors and staff agreed the draft needs clearer triggering language describing when reserves can be spent and the repayment terms if funds are used; staff said the last sentence in the draft requires revision. Councilors also recommended calculating the reserve percentages on noncapital expenditures for clarity.
No final vote was taken on the ordinance; staff asked for council guidance and permission to refine the language to remove ambiguity about triggers, repayment, and the calculation base.
Key numeric clarifications from staff: current funded reserves total roughly 1.7 million (staff estimate), the proposal’s 15% stabilization target would be about $2.0 million, and the combined reserve cap would be 23% of budgeted expenditures. Staff recommended returning with cleaned-up wording and an implementation schedule tied to the city’s fiscal-year reconciliation.
