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City finance explains 90-day reserve and $24M liquid balance as association presses $107K ask beyond council-funded 5%
Summary
Association negotiators questioned why the city holds a large unassigned fund balance and asked whether more could be allocated to police pay; city finance staff explained a 90-day liquid reserve practice (~$24M) and that roughly $918,000 was allocated by council to fund a 5% across-the-board raise, while some reported fund-balance items are non-liquid and require reconciliation.
Association negotiators pressed city staff on the size and availability of San Angelo’s unassigned fund balance after the city facilitator proposed extending the agreement with a 5% raise funded by council. A negotiator cited an audited unassigned fund balance of about $49.7 million and asked why much of that money was not being committed to police compensation.
Finance staff explained that audited GAAP figures include non-liquid items such as receivables and capital assets, and emphasized the distinction between GAAP-reported fund balance and the city’s budget-basis, liquid fund balance. "We keep a 90 day fund balance in our reserves," a city finance representative said, describing the 90-day reserve as the city’s liquid fund to cover temporary revenue interruptions and to preserve bond ratings. Staff said that after a recent budget amendment, about $24 million equates to the 90-day, liquid amount available for discretionary use; the remainder of the reported figure includes non-liquid items that are not immediately available without reconciliation.
City staff also repeated that the council allocated roughly $918,000 to fund a 5% across-the-board raise. Association negotiators asked whether a midyear adjustment or a request to voters might be required if the pay-and-classification study suggests larger increases. City staff said that if study results indicate a need for substantial increases, seeking voter approval may be necessary under state constraints discussed during the meeting.
Both sides agreed to reconcile the numbers: finance will run the numbers and city and association representatives will meet to reconcile the $918,000 figure, clarify which positions (assistant chiefs, chiefs, civil-service vs. appointed) were included, and determine what portion of fund balance is reasonably available for one-time or recurring compensation adjustments.
