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Finance director defends 15% charter reserve floor, outlines borrowing limits and hurricane exposure
Summary
Finance Director Bridget Bass told the committee the charter’s 15% reserve requirement should remain a minimum while staff maintains higher practical reserves (about 30–40% across funds); she reviewed charter borrowing language, state statutes and recent storm costs that affect fiscal planning.
Bridget Bass, Finance Director for the City of Edgewater, presented the committee with the city’s property tax mix and a review of charter language on borrowing and reserves. Using the property appraiser data, she said the tax base is roughly 72.1% residential, 8.8% commercial and 7.2% industrial.
On borrowing, Bass said section 3.08 of the charter currently bars the city from incurring additional debt of more than 0.75% of net taxable value during any rolling five‑year period unless approved by referendum. She recommended leaving charter language tied to existing Florida statutes rather than adopting new local restrictions that could create conflicts with state law.
On reserves, Bass said the charter requires a minimum reserve equal to 15% of operating funds. She noted industry guidance ranges from about 16% to 35% and that the Government Finance Officers Association suggests roughly 17% as a minimum benchmark. "We're not saying that 15% is adequate," Bass said. "We're saying that's the absolute base; on a typical year we attempt to maintain closer to 32% which gives you nearly four months of coverage." She urged using policy (a fund‑balance policy approved by council) for higher or changing targets rather than making the higher number sacrosanct in the charter.
Bass described the city’s recent storm finance experience: more than $8 million in storm damages and expenditures over the last decade, with Hurricane Matthew’s recovery only recently closed after nine years. She reported $718,000 in expenditures denied by FEMA and about $923,000 in outstanding FEMA claims related to Irma, Ian, Nicole and Milton, and said such long timelines and denials justify a conservative approach to reserves.
Committee members asked about the consequences of dipping below the charter minimum and the interaction with bond covenants. Bass said using reserves requires a council plan to replenish that amount (typically over five years) and that credit analysts consider reserve levels when pricing municipal debt. She also confirmed that bond covenant requirements and reserve set‑asides are tracked separately from the charter minimum.
A member asked whether mayor and council pay could be removed from the charter and placed under a policy administered by finance; Bass said many cities keep elected‑official pay in the charter but that a council‑approved policy could coordinate pay setting if the committee chose to change that approach.
Why it matters: the committee is reviewing whether to change charter provisions that affect long‑term fiscal flexibility, debt capacity and the city’s ability to respond to recurring storm costs. Bass recommended retaining the 15% charter floor and using council policy for higher reserve targets so the city maintains flexibility while meeting statutory and bond obligations.
