Inflation, rising costs lead Sandy Springs to increase its reserve fund

Sandy Springs City Council reached a consensus at its special budget meeting on May 21 to put $800,000 in undesignated funds into its reserve rather than commit it to any projects.

“Every contract we get seems to be higher than the last contract and every expense we get,” Councilmember Tibby DeJulio said.

DeJulio said he was concerned that inflation would increase again and interest rates would remain high. He said it would be fiscally irresponsible for the city council to not add the $800,000 into the city’s reserve funds. The fund balance reserve (calculated as 25 percent of expenditures) was proposed at $31.2 million in the RY 2025 budget.

DeJulio said he hopes he’ll be proven wrong about needing more revenue in the reserve fund when the city does its mid-year financial review.

“If it turns out that we have surpluses and we have better collections than we anticipate and interest rates come down more than I anticipate them to come down,” he said, “then we can go ahead and look for other alternatives on it.”

Most of the council members agreed with DeJulio, creating a consensus opinion that the staff can adjust the city’s proposed budget at its next meeting. The first public hearing on the city budget will be on June 4, with the second and final public hearing scheduled for June 18. After the second hearing, the city council is expected to approve the budget with any revisions made after the public hearings.

Mayor Rusty Paul said the city’s policy from its beginning was to keep up to 25 percent of the annual budget in a reserve fund.

“It’s an insurance policy when some catastrophic event occurs that the city needs millions of dollars that we have to be able to spend,” he said.

The budget proposal designated $37.9 million for its operating budget; City Manager Eden Freeman told the city council. That includes a 5 percent cost of living adjustment for city employees for a projected to cost $2.4 million.

The capital budget assumptions were for $28.2 million, plus another $590,000 from the Tree Fund.

She said General Fund revenues were projected to be 5.26 percent lower at $124,750,020. General Fund expenditures were estimated to be 8.27 percent higher in FY 2025, at $155,116,994.

More details about the city’s annual operating and capital improvement budget can be found online on the city’s website .

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