We all should be as fortunate as the city of Fort Wayne, with a cash cushion of more than $36 million available in its Legacy Fund. Without additional spending, the nest egg could grow to $101 million by the time I&M makes its final payment for the city’s old electric utility in 2025.
The fund, established in 2011 from a trust account created by the lease and eventual sale of the utility, continues to grow with investment earnings and additional payments by I&M. As other Indiana cities struggle with tax-capped revenue, Fort Wayne has the luxury of knowing a huge and unexpected expense won’t topple its carefully balanced budget.
That said, City Council was wise to reject City Controller Pat Roller’s proposal to tap Legacy dollars for emergency expenses. In the short time it’s been available, Fort Wayne residents seem to have developed a pride and sense of responsibility for the Legacy Fund. They rightly expect council to weigh in when any of the money is spent or even borrowed.
Council members voted 7-2 to reject Roller’s proposal. Councilman Tom Smith, R-1st, was particularly adamant that spending decisions should not be placed in the hands of one person. The controller wanted permission to borrow Legacy money with a written request to the fund’s trustees, not to the council. She proposed a loan fund from which the administration could borrow up to $5 million at zero percent interest. If declining revenue resulted in an inability to repay it, according to proposal, the loan could even be forgiven.
Damage from a violent windstorm two years ago and budget-busting snow removal bills from this year’s never-ending winter are good examples of the unexpected costs the city faces from time to time. Thanks to the Legacy Fund, however, the money is there if the unimaginable occurs, and earning the council’s approval to spend it requires only a little more effort.
We understand Roller’s concern that the current city budget left a cash reserve too small for her comfort, but it’s less of a concern because the Legacy Fund exists. It’s both reasonable and responsible for City Council members to expect some oversight.
The administration benefits, in fact, from seeking council approval each time it might need to borrow from the fund because it reinforces how sparse the city’s budget is. If emergencies arise – and let’s hope they don’t – we’ll look to the administration and council to look for the best source of cash. If it’s the Legacy Fund, we’ll congratulate them and ourselves for the wisdom of establishing and preserving it.