In good times and bad, we must provide for future generations and protect our most vulnerable populations. Because of the national elections, the risk of drastic cuts to federal programs and the importance of a strong reserve to protect them cannot be overestimated. Strong reserves offer that protection.
Tuesday, December 13, the City Manager and the City Auditor's office are calling for the new Mayor and City Council to make a courageous leap forward in protecting the City's future. I ask for support to help Council do the right thing by voting yes on the new General Fund Reserve Policy, Action Item 34, to fully implement our February 23 audit recommendations from "General Fund Reserve Policy Fails to Convey that Maintaining the Reserve is a Priority". Please contact the Mayor and Council with your support for our audit by sending an email.
Like Aesop's industrious ant, prudent fiscal planning will help the City weather the volatility and uncertainty that is sure to come under the country's newly elected president.
Reserves enable us to weather extreme events without having to immediately eliminate our housing and mental health programs. According to Berkeleyside, Berkeley receives around $11.5 million in federal funding, chiefly to help the City's most vulnerable, including spending on housing, supportive care, emergency shelter and health services.
The City Manager's proposed new General Fund Reserve Policy is well developed, clear, concise, and easy to understand. As we recommended, it sets the minimum reserve level at 16.7% and increases it to align with best practices given Berkeley's strengths and risks. The Council is asked to vote on a policy to take steps towards a 30% reserve. At the same time, the policy allows for the use of excess equity on other needs, at Council's discretion.
Thank you so much for continuing to support the work that we do on your behalf as independent performance auditors. With your support, we will continue to help make Berkeley better!
Sincerely,
Ann-Marie Hogan, Auditor City of Berkeley Auditor's Office