Emergency fund reserve key in handling unexpected expenditures in Hampton

Tuesday, February 11, 2020 | 12:01 AM


For unexpected projects requiring emergency repairs, such as the current stabilization work on Clearview Road, Hampton Township Council periodically draws on an emergency fund reserve.

Jerry Speakman, who serves as controller for the township, explained the purpose of the fund and some history on recent actions regarding this reserve.

“Over the last couple of years, there have been several major downpours which have caused flooding events and contributed to erosion issues. The storm in July 2019 had a major impact within the township, causing a state of emergency to be declared by council President Mike Peters. Only under such a declaration can funds be expended from the emergency reserve for repairs,” Speakman said.

Peters said a previous township council made the decision that money from the emergency reserve fund could be spent only when a state of emergency is declared by the council president.

“This enabled township staff the ability to access the emergency reserve fund in order to repair the damage caused by the storm,” Peters said. “The projects ranged from clearing downed trees from roads and creek beds to repairing sewer and stormwater lines.”

Peters said projects that draw on the emergency reserve fund are direct results of extreme weather events or natural disasters.

The estimate of damages from last summer’s major storm is $776,000, which is $121,000 more than the fund balance at the time of the event, said Speakman. He said these repairs and expenditures are continuing in 2020.

Speakman said for last year’s emergency expenses, council authorized a year-end transfer of $300,000 from the 2019 operating budget surplus, which was expected to leave an estimated $200,000 balance at the end of 2020. As in previous years, Speakman said, attention will be given this year to further replenish the fund.

It’s ideal for the emergency fund to have at least $500,000 but not exceed 5% of the budget, Speakman said. Excess money from the operating budget can be transferred to the emergency fund.

Additional transfers from the operating budget are made when surplus funds are available. Such a transfer — of $100,000 — was made in 2018, bringing the balance going into 2019 to $655,620. Such transfers were made in 2013 and 2014, too, Speakman said.

Since 2008, the lowest balance in the emergency fund has been about $270,000; that low point was attributed to major expenses in the wake of flooding caused by storms linked to Hurricane Ivan in 2004. Some expenditures from the fund were reimbursed by the Federal Emergency Management Agency following that federally declared disaster. Other funds are occasionally used for projects focused on flooding/disaster avoidance, such as the water retention basin at Route 8 and Duncan Avenue, Speakman said.

The emergency reserve cannot be used for other general operating, special project or capital purposes, he said. Technically, council can approve transfers from the emergency reserve in a public meeting, but it would require an exceptionally unusual need, Speakman said.

An example of a project that would not qualify for emergency reserve funding is the bridge replacement on Clearview Road at Route 8. This project will be funded through the capital improvement fund, Peters said.