$56 Million in Reserves As Budget Planning Begins
Updated on February 7, 2021
Our city’s two-year budget planning process has begun with $56 million in our contingency reserve for unanticipated expenditures. There were different schools of thought from our City Council on what to do with these funds during the pandemic.
Residents will have an opportunity to participate in future community budget neighborhood meetings. To learn more about Irvine’s budget planning process, here is a fun two-minute video released last year (please disregard the dates).
Councilmember Larry Agran proposed drawing down $10 million per fiscal year for the next two years, from our reserves to assist with COVID-19 related essential services for businesses, workers, and schools. He also suggested earmarking $2 million to hire full-time school nurses for all the public schools in Irvine.
Interim City Manager Mariana Marysheva did not support the idea of drawing from our reserves, stating the city is working hard to balance the budget and cautioning that a single lawsuit could deplete the entire reserve. $8 million is needed for our current fiscal year to avoid layoffs and services and $3 million for our building and safety fund, leaving approximately $50 million in our reserves.
Councilmember Agran then responded,
“Let me just be blunt about it — I think it’s morally irresponsible to try to maintain a $50 million rainy day contingency reserve without drawing it down or expecting to draw it down through a once in a hundred years pandemic that is so devastating. I take no heart or pride in maintaining our reserves at a $50 million dollar level without deploying them to get through the pain and suffering experienced by so many people now. I think it’s very important to consider that, as a philosophical matter if nothing else. It’s just a way of looking at things. Focusing on the role of the reserves in getting through all of this would be very helpful.”
Mayor Farrah Khan’s comments concluded the discussion before hearing public comments. Mayor Khan sought to maintain our reserves at their current level due to the uncertainties of the pandemic, how long it will last, and the unexpected needs of our growing city.
“We have a lot more of a population to serve, lot more landscape to cover in our city as we’ve grown, and so we have to look at the budget with today’s eyes, with what we’re facing today. It’s very important for us to not only look at the budget as it is today for what our needs are but also in the future… This pandemic we are hoping we are going to get over it this year but we don’t know… we don’t want to be in a place where something else shows up at our door next year and we’re sitting here empty handed.”
Should our city be using our contingency reserves during this pandemic or would it be preferable to maintain the funds around $50 million? Residents are an important part of the budget planning process. As the budget planning process makes its stops starting with input from key stakeholders, the Finance Commission, then Irvine residents, we hope you will make your voice heard along the way!