City Emergency Fund
As the campaign for city council and Mayor gets underway we are hearing candidates say the city needs a larger emergency fund for “when the next hurricane comes.” Unfortunately no one is saying how large the fund should be.
Should it be large enough to cover city operations for a year? For fiscal year 2018 the city budget is a little over $11 million. That is quite a bit of money to park in an interest bearing account that currently pays very little due to historically low interest rates. Because this is emergency money that may be needed tomorrow it cannot be invested more aggressively.
The more important point is this is your money! Shouldn’t it be under your control to use as you best see fit for you and your family? Besides, we may not need this money for 10, 20, even 40 years. Who knows? By then you may no longer live here. In that case why should you be paying for the rebuilding of some place you no longer live? Let the people who live here pay for the lifestyle they have chosen.
There are currently 4300 dwellings on the island. Should the city need to raise the entire budget from within the island (and it is unlikely this would ever be the case) it would need about $2600 from each dwelling. This is a good chunk of money, but not an amount that would financially destroy most who live or invest here.
Yes, in an emergency each of us will need money to repair our properties. Unless you are rich enough to be “self insured” you need homeowners, flood and wind and hail insurance. If you live here and don’t have it and you are not rich you are a damn fool. But hey, I believe people should be permitted to make foolish choices.
So, if someone tells you we need a larger emergency fund, please ask them how large it needs to be and why the city should be holding your money instead of you. As for me, I think a 2-3 large is plenty of money. Let each of us keep the rest. We are responsible people and we know how to manage our own finances with plans in place for future emergencies.