NC City Council approves establishing equipment reserve fund
Future Nebraska City City Councils may have an easier time replacing expensive equipment, thanks to the city’s new equipment reserve fund.
As the city began its 2021-2022 fiscal year, it had about $732,000 in additional revenues, and the council approved setting some of the money aside for future equipment purchases.
Council members also set the city’s cash reserve limit at 35 percent, which would cover city expenses for about 3 months in a financial emergency, and the council and city staff continue to fine-tune the exact amount of the surplus that will go toward the equipment reserve fund.
State law allows a city to create an equipment reserve fund for those purchases of $5,000 or more with a shelf life of three years or longer, said Nebraska City City Administrator Lou Leone. The state also restricts the amount a city can have in its unlimited cash reserve to 50 percent of the previous year’s operating costs, he said.
Leone has had equipment reserve funds in his budgetary toolkit at some of his previous jobs, and he thinks Nebraska City will find the fund “very helpful in the future.”
Leone said the goal of budgeting every year is to be “net zero,” with revenues and expenditures matching exactly. He said he tries to be conservative when forecasting revenue while encouraging department heads to be liberal in their spending plans for the budget year.
This year’s additional revenue came in part from online sales tax revenues, said Leone, and he complimented city department heads on their continued responsible spending as another part of why the city had a surplus at the end of the fiscal year.
Leone plans to establish equipment reserve funds for each city department and grow them. In the meantime, he will continue to encourage department heads to be on the lookout for deals and to pursue grants and donations as appropriate.
“The city will see a lot of relief in the budget in the future once the equipment reserve fund is healthy enough to get used,” he said.