Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.
Is Arlington’s cash surplus too large?
It’s a $200 million question in search of persuasive answers.
In an important letter published in the Arlington Sun Gazette last week, Arlington civic activist David North explained why he believes that Arlington’s cash surplus is way too large. David makes a good case that in a relatively prosperous county like ours, a cash surplus, general contingency fund in the range of no more than $100 million is about right. $100 million represents about 10 percent of Arlington’s current total operating budget.
However, in the earlier Sun Gazette story that prompted David’s letter, it was revealed that Arlington’s actual cash surplus is about $300 million.
A decade ago, Arlington’s then-$70 million cash surplus was in line with David’s rule of thumb. That $70 million cash surplus represented about 10% of Arlington’s FY 2004 total operating budget.
But today, Arlington’s $300 million cash surplus is about 30 percent of Arlington’s FY 2014 total operating budget.
Are there persuasive reasons that Arlington’s cash surplus needs to be $200 million more than the $100 million general contingency fund that David North recommends? Maybe, but Arlington County has not provided such reasons.
Theoretically, Arlington might be able to justify laying aside the extra $200 million if it could explain persuasively that none of the extra $200 million is part of a general contingency fund at all. Instead, Arlington theoretically might be able to convince reasonable people that:
- all of the extra $200 million is earmarked for specific worthwhile projects or other uses that the Board has approved, and
- it is necessary to accumulate in advance all or part of what it is going to cost to pay for those projects or uses.
But, if Arlington cannot provide a persuasive explanation for the need to retain the extra $200 million in cash, it ought to proceed to redirect these funds into alternative uses. Finally, Arlington needs to reassure the public that at least $100 million of the $300 million actually is set aside in a general contingency fund.
What Arlington is doing fairly could be described as unilateral layaway financing. Desi Arnaz, a 1950s comedian, would have known what to say in this situation, “Arlington, you’ve got some ‘splainin’ to do.”
Peter Rousselot is a former member of the Central Committee of the Democratic Party of Virginia and former chair of the Arlington County Democratic Committee.