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Zero Waste chair fearful rainy day fund too low

Wednesday, August 16, 2017 by Lisa Dreher

Last Wednesday, Austin Resource Recovery presented its proposed budget for Fiscal Year 2017-18 to the Zero Waste Advisory Commission. Commission Chair Gerard Acuna worried it lacked reserve funds in case of emergencies. Acuna was displeased that there is a program requirement that one-twelfth of the operating budget is set aside for reserve funds, and said “back in the old days” the department had at least three months’ worth of reserved funds. “If you’re in the private sector and you run a company or whatever, you want to make sure there’s money in the bank,” Acuna told the Austin Monitor after the meeting. Austin Resource Recovery finance division manager Jessica Frazier told the Monitor that because the proposed budget is only an estimate, it is possible that the department has more or less reserve funds at the end of the fiscal year than the policy requires. Frazier said during the meeting the requirement has been in place for as long as she has worked for the department, which is about a decade, and that saving up too much goes against city policy. “We did have a point in time where we had excess reserves, which is actually in violation of some rules,” Frazier said. “We’re not allowed to just have banks and banks of money sitting around if we’re not using them for something.” Frazier said that the proposed operational budget is $69.7 million and the overall proposed budget is $95.9 million for the 2018 fiscal year, but usually emergency situations affect the operational budget because it includes expenses for things such as personnel and safety equipment for the department, which are used for emergencies such as a severe storm requiring cleanup by the city. Frazier told the Monitor if everything is budgeted correctly with revenue and expenses calculated, the reserve fund is expected to be $6.3 million for the next fiscal year, which is money that would be accumulated from past leftover savings. “Let’s say you have a thousand dollars and have $500 left of bills, and then the month ends and you don’t have any bills to pay so you have $500 left over,” Frazier said. “That $500 goes over to the next month, that’s kind of what our reserve is.” Acuna had expressed more concern over potential emergencies where the department scrambles for funds, such as when it considered selling some land in South Austin to match a million-dollar grant to build a [re]Manufacturing Hub, a city industrial park for companies making products out of recycled materials. “Instead of having money in the bank to receive a million dollars, we were considering selling an asset and praying that we could get the million dollars,” Acuna said. “I would love to see money in the bank so those kind of opportunities, when they do present themselves, we can readily approach them and perhaps jump on them.” Acuna said he understands the one-twelfth rule is policy, and Frazier told the Monitor there is nothing currently in the environment that would cause the department to change its policy.

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