Seldovia council reviews draft cash-flow plan setting $350k–$500k operating target and reserve options

Heidi, a city staff member leading the financial presentation, walked the Seldovia City Council through a draft cash flow management policy during the Feb. 23 work session and solicited council feedback ahead of the FY27 budget process.

Heidi said the draft sets an operating checking-account target of "$350 to $500,000" and recommends that whenever checking exceeds $500,000 the finance officer move the excess into an AMLIP operating cash account so funds remain insured and interest-bearing but remain retrievable. "The target is from 350 to 500,000," she said, noting the FDIC insurance limit of $500,000 as a principal rationale for the approach.

The presentation described the municipal fund structure: a general fund for core services (administration, public works, library, fire/EMS, VPSO-supported police services) and a set of special revenue funds (water, sewer, harbor, boat haul-out, senior meals, and others). Heidi also reviewed a permanent-fund/AMLIP bundle that currently holds several accounts and provided figures from the packet: projected FY26 AMLIP balances totaling $781,804.64 across subaccounts, including a major maintenance and repair fund at $290,749 and a harbor capital fund at $217,667 (with $140,000 already committed to the Jackloff project).

On reserve targets, Heidi presented options: a full-year operating reserve using the East Solutions Bureau template (roughly $1.7 million for the city, representing one year of operating cost) or a lower combined target such as 1.2 years, with the recognition that reaching the full target could take many years. The draft policy would allow annual deposits into MMRF and vehicle-replacement funds and would formalize automatic transfers from checking into AMLIP when thresholds are reached.

Council member Peyton recommended that routine transfers to AMLIP be recorded in the mayoral or finance report so the movement is visible in council minutes; Heidi confirmed such transfers are reported in the city manager’s report and tracked in the audit. Council discussed vehicle-replacement planning and amortization, and Heidi provided concrete replacement estimates for major equipment: a new backhoe at roughly $199,000 and a motor grader under $300,000 (contract pricing), and indicated many light vehicles can be procured used to limit cost.

The council also discussed a public-safety reserve fund established in FY25 (initially about $50,000) intended to support reestablishing a Seldovia police department if needed. Members asked whether that fund should remain earmarked for reestablishment or be broadened to cover public-safety equipment such as dispatch radios. Heidi said council could expand the fund’s stated purpose to include equipment or capital projects at council’s discretion.

On dispatch radios, Heidi said the city previously submitted a grant for a full radio package that was not awarded and estimated a full replacement at around $100,000; the department had purchased a repeater for about $16,000 which has not worked reliably, and a loaner repeater stopped working during troubleshooting.

Heidi also gave an overview of grant activity: the city has 17 active state and federal grants totaling $11,573,340 awarded with $341,435 in committed local match. She said grant details would be part of the capital projects conversation later in the budget cycle.

Because this was a work session, no policy or resolution was adopted. Council asked for more detail and flagged the cash-flow draft for continued review during the regular budget process.

The manager and council agreed to keep refining the draft and to return to the capital-projects discussion during upcoming meetings.