Ward 1 Candidate Question of the Week: Reserve Funds

Voters will head to the polls March 13 to decide who will represent them as Gulfport City Council member for Wards 1 and 3.

To help inform the community, Patch will publish a City Council candidate Question of the Week for both wards.

Below, you will find the answers for the Ward 1 Candidates: David Hastings and Dan Liedtke.

Gulfport Patch Question of the Week: "Where do you stand on using General Fund Reserves to balance the City’s Operating Budget?"

David Hastings

"I do not agree with using General Reserve funds to balance the budget. The City Council passed Resolution 2003-11 in 2003 requiring the City to maintain an amount in the General Fund Reserves equal to 25% of the previous years budget. That 25% reserve can only be used for an emergency as authorized by sections 310 and 311 of the City Charter. In 2003 we had over $7 million in reserves with an operating budget of some $8 million. Ever since 2003 our budgeted expenses have exceeded our budgeted income and the previous councils have used the reserves as one component to help offset the deficits. As a result today we stand with only $4.5 million dollars in reserves on a $10 million dollar budget or 44% which is still above the 25% mandated by Resolution 2003-11 but $3.5 million less than it was in 2003.  

A 25% reserve or three months of operating expenses is well below what lenders require when seeking loans either on a personal or business basis. Many lenders require up to twelve months operating cash on hand. Why then would government be different especially when the monthly expenses we would incur after an emergency event would most likely greatly exceed those of a typical month. I believe it critical that we maintain a minimum of six months operating cash on hand. I believe we need to re-think the methodology by which we calculate the reserve and insure that it is in line with the best practices of other government entities as well as those of lenders and risk evaluation firms."

For more information about David Hastings view his website.

Dan Liedtke

Updated: Dan Liedtke has refused to answer the question on this forum and is asking readers to view his answer in the FAQ section of his website.

Updated Feb. 22, 9:29 a.m.: Based on information from the candidate's website, here is a synopsis of his views on whether to use General Fund Reserves to meet the needs of the Operations Budget for running the city.

Liedtke stated that because of the economic downturn, he supports tapping "excess reserve funds," instead of cutting "police services" and "raising property taxes." The excess Liedtke refers to are the dollars above the goal of putting aside 25 percent of the previous year's general fund budget.

Liedtke states on his website that the city has at least $2 million more than what is required under the City Charter. Given the tough economic times, Liedtke believes leaders should consider using some of the reserves to address "immediate financial challenges."

Liedtke declined this week to respond in writing to Patch's "Question of the Week" posed to City Council candidates, referring this reporter to his website. Liedtke wrote on Monday in an email to Local Editor Cherlene Willis "due to so much negativity in the comments section," he does not want participate in the forum.

The next "Question of the Week" will run Monday or Tuesday.