Unlike Pemiscot, Cape Co. has plenty in reserve

Tuesday, April 11, 2006

Officials here have set aside 50 percent of the annual operating budget.

Pemiscot County had no reserves in its county coffers when a tornado struck April 3 and destroyed half of Caruthersville, Mo.

State law didn't require Pemiscot, a third-class county according to Missouri's classification system, to set aside part of its budget into an emergency reserve, Associate Commissioner David Wilkerson said.

"We didn't have any type of emergency funding," Wilkerson said. "I'm sure it will certainly be something we discuss doing in the future."

In Cape Girardeau County, that's not the story.

Not only does its first-class status mean that it must put aside 3 percent of its operating budget into a reserve fund, but Cape Girardeau County officials have set aside far more than required by law.

The county has $5 million set aside in emergency reserve. That's almost 50 percent of the county's total operating 2006 budget of $11.68 million. By law, the county is only required to carry approximately $350,000 in an emergency fund.

The decision to keep such a large reserve balance has drawn some criticism. Many county residents still living on gravel roads have suggested that $5 million would fund many miles of blacktop. But officials say the savings is more important than immediate needs, particularly in the wake of the lessons learned after Hurricane Katrina.

"Our emergency reserve is set aside so we can maintain the county for awhile without having to rely on the federal government," said county Auditor David Ludwig.

Cape Girardeau County's emergency reserve fund started in 1994, when additional sales tax was invested into long- and short-term bonds, said Presiding Commissioner Gerald Jones. The county added funding to the reserve until it reached $5 million in 1997.

The county hasn't been able to afford to place any extra funding into the emergency reserve in recent years, officials say. But none is coming out, either.

"We're not going to touch that money, and we act like it's not even there. That's for a very big emergency," Jones said.

Jones said the $5 million emergency reserve isn't enough, especially if Cape Girardeau County is rocked by a major earthquake.

"But it's better than nothing," he said. "If all the buildings crumbled in Cape County, and we didn't have sales tax revenue coming from any of the businesses, that emergency funding will help out."

Tom Finnigan, spokesperson for Citizens Against Government Waste, a not-for-profit organization that examines unnecessary expenses in the government, said Cape Girardeau County officials should be commended for setting aside such a large portion for emergencies.

"An emergency reserve fund will keep the county government operating when it is most needed and will help avert the abuses that often accompany disaster relief funding," Finnigan said. "Local and state officials often overestimate the capacities of the federal government. Although the federal government plays an important role, emergency planning and response remains primarily a local and state responsibility."

Finnigan said more counties should follow Cape Girardeau County's example of investing money into an emergency reserve.

"It would lessen the need for congressional emergency supplement bills, which have become a convenient excuse for waste and excess of the worst kind," he said. "It is a miracle when any politician overcomes the temptation to spend every cent at his or her disposal."

Taney County in southwest Missouri has a surplus of $14 million in its general operations fund but has plans to build a new county jail with the funds.

"We have a pretty good surplus, but we do run tight budgets," said Auditor Rick Findley.

Missouri first class counties Greene and Buchannan auditors say their counties keep the required 3 percent emergency funds but no more.

"We spend every dime we get," said Susan Montee, Buchannan treasurer.

Cape Girardeau County had $10 million in surplus at the end of the 2005. Five million was held in the emergency fund. The other five million was earmarked for particular projects or departments such as 911 and election equipment upgrades, and could not be used for general operations.


335-6611, extension 246

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