Disagreement and contention reigned in the Erlanger City Council this week as members debated the ideal use for $5 million in capital reserve funds following the first reading of an ordinance on June 6, which would codify when and how the city could spend the money.
Disagreement arose within the council on how to best use the funds and how restricted they should be, with some council members in favor of specific restrictions on the money and others in favor of more flexible use of the money.
Called the “Gary Meyer Emergency Fund” after the former council member who proposed the idea of reallocating funds in July of 2022, the money had been removed from the unrestricted reserves in the city’s general fund at the end of last year and moved into the capital fund. This change restricted the use of the money for investment into essential public goods, like emergency vehicles and infrastructure repair.
Council Member Tyson Hermes brought the funds up again at the beginning of the year, expressing a desire to create a discrete budget line item and specific triggers for the use of the funds, such that they wouldn’t be spent erroneously or inadvertently.
“I’m not concerned about this council, and the people that are sitting in this room,” Hermes said at the council meeting on May 13. “I’m talking about 30 years from now. I hope this fund is still sitting there, and I want people to understand what that money is to be used for 30 or 50 years from now.”
Discussion on the topic waxed and waned through the first half of the year, but several council members, such as Jennifer Jasper-Lucas, Tom Cahill and Rebecca Reckers, explicitly came out against additional restrictions.
“Right now, I don’t have an appetite for any new legislation regarding the $5 million other than it just sitting there,” Jasper-Lucas said on May 13. “I don’t think we need to put any additional parameters on it at this time.”
The council completed a first reading of the proposed restrictions on June 6. The new ordinance added two triggering mechanisms limiting the use of the money to responding to either “a natural disaster or act of God that significantly impacts city assets and utilizing money from this fund is the only way to avoid a significant reduction in city services” or a majority vote of the city council. It would also separate the funds off into their own line item on the budget so that it could be easier to track.
The tension around the fund came to a head at the caucus meeting on Tuesday.
“I’m not sure if legislation is even really needed,” Reckers said on June 20.
Reckers felt that the new ordinance’s language was redundant and unnecessary. She also made the case that adding the “act of God” phrasing would actually increase the likelihood of the money getting spent.
“I’m not sure if memorializing that in additional legislation in conjunction with an act of God is even necessary,” Reckers said.
Council Member Cahill agreed and buttressed his point by referencing an incident in the city’s Cherry Hill neighborhood in which a semi-truck had damaged an overpass. He asked if an incident like that would fall under the new criteria for use of the money and made the case that leaving trigger mechanisms off of the ordinance would be more beneficial.
“Going to that capital fund allows us to have that ability to be flexible on how that money is utilized,” Cahill said.
Hermes accused Reckers of “talking out of both sides of her mouth,” and Mayor Jessica Fette expressed confusion about Reckers and Cahill’s reasoning.
“I guess that is the clarification that we’re looking for,” Fette said. “What was the intent? What was the original intent moving [the money]? Just to save it for a rainy day or what?”
Cahill said that the original reasoning behind moving the money was to avoid the depletion of unrestricted reserve funds, which, he argued, were demonstrated as likely to occur in budget projections for the future. Keeping them unreserved would more easily enable the council to use the money for replacing essential assets.
Discussion continued with the crux of the disagreement centering on if the money should be used for emergencies or a rainy day or for long-term projects and investments.
“What is the intent of the money, the $5 million?” Fette said. “Is it to utilize it as part of the capital fund for next fiscal year? Or is it to stay as 5 million for eternity until there is some type of issue?”
“I feel like we’re talking in circles,” Fette added.
“I don’t want to see the funds wound down anytime soon,” Reckers said, “because taking on any sort of municipal debt obligation in this current climate for any reason, whether it’s a 10-year bond for a park, etc. The rates are astronomical right now, whereas three years ago, that was not the case. So when we’re paying for things in cash, we need to hedge.”
“I think calling something a rainy day fund is an intent to spend,” Reckers added.
“Okay, then let’s articulate when we use it,” Hermes replied.
Cahill and Reckers both expressed a desire for something like a cohesive strategic plan for the city, rather than individual bits of legislation, to direct where money should go.
Erlanger has several master plans for different aspects of operating the city, like parks and facilities, but there was confusion among council members if there was a singular, cohesive document. LINK nky was not able to obtain such a document from the city by the time this article was published.
In any case, Fette took issue with Cahill and Recker’s stance that the city might be imprecise with its spending.
“We don’t just arbitrarily spend money,” Fette said. “We are very strategic and intentional and focused on how we spend our money.”
City Attorney Jack Gatlin stepped in to offer his interpretation of the ordinance. He said that the way it was written would allow the council, or future councils, to use the money freely, so long as it was approved through the normal legislative process. He said that the way the new ordinance was written didn’t, in fact, restrict the money further.
“Without being offensive to anybody, it’s kind of a useless ordinance as it sits,” Gatlin said.
“I think there needs to be additions to the ordinance to restrict it,” Fette said.
Hermes then called upon other council members to share their views on the funds.
Council Member Don Skidmore said, “I like it the way it is.” He went on to say that the money should be left alone.
“What’s the purpose of it?” Fette asked.
“What’s the purpose of not messing with it?” Mr. Skidmore said.
“We’ve taken $5 million from the taxpayers,” Fette said, “and it’s our obligation to make sure we set an expectation of what it’s going to be utilized for. And if it’s not going to be used and it’s going to be restricted, then what is it actually restricted for?”
“I’m sure the tax payers would be happy to see money saved,” Mr. Skidmore replied.
“But we’re not a bank,” Fette said.
“We’ve got over $15 million sitting,” Fette added.
“Then put more with it,” Mr. Skidmore said. “Save some more.”
Fette then called on Council Member Renee Skidmore to share her thoughts.
“I get tired of coming up here every month, talking about the same thing,” Ms. Skidmore said. “There’s an expression that says you’re beating a dead horse. It’s almost like you’re treating us like we’re little kids, and you’re going to give us one more chance to agree with what you’re saying.”
Ms. Skidmore turned off her microphone and didn’t say anything else.
Reckers reasserted her desire for a single, cohesive strategic plan for the city. Hermes claimed that there was a strategic plan, which he said he had sent to Council Member Jasper-Lucas but never heard back. Jasper-Lucas did not attend the meeting on June 20.
Reckers stated that she would like to examine the strategic plan in detail before casting a vote.
Finally, Hermes agreed, saying that would also not be comfortable voting on the ordinance if it came up for a second reading, although he said that ideally, the council would need to determine what to do with money by the end of the calendar year, as this would be when the city began planning for fiscal year 2025’s budget.
The next Erlanger City Council meeting will take place on July 11 at 7 p.m. at the Erlanger City Building on Commonwealth Avenue.
CORRECTION: The original version of this story misstated that Gary Meyer had suggested the idea of capital re-appropriations in August of 2022. This was not accurate. The relevant line has been corrected.