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City Reserves: A Bit of Back Story

Comparing city reserve funds is not necessarily an easy task: every city has its own way of divvying up the dollars, so there's a risk of comparing apples and oranges.

But it struck me as worthwhile to get a ballpark figure of what each city has in the bank: the savings account generated from revenues that pay for things like police, fire, libraries and parks.

It was interesting to talk to the city finance folk. They are, after all, real people! 


Christopher from La mesa
February 10, 2009 at 11:43 PM
Thank you for bringing these facts to your listeners attention. You hit the nail on the head by pointing out the fact that financial rating agencies use reserves in determining the health of a public agency. Without a strong rating by them then borrowing becomes problematic and a drain on operating expenditures, not to mention the ability to begin capital projects. Rather than spending time digging through budget documents and interviewing managers to assess their fiscal soundness, consider asking them when they were last rated by one of the major rating agencies and what rating they received. The length of time since their last rating and the grade they received will provide a snapshot of an agencies fiscal health, how well they are managed and how they perform relative to their peirs.

Cardiffer from Cardiff
March 21, 2009 at 12:19 AM
Sorry Chris. The rating agencies have a real bad record AND they rate the likelihood that the city won't pay back their loans. They don't rate the wisdom of the pension benefit system of a city.