City votes to place a ‘rainy day’ cap of 3.5% on its permanent fund

The City of Delta Junction returned to some unfinished business at its Tuesday, September 1 meeting to discuss the city’s permanent fund sustainable contribution rate.  

“The permanent fund was started back in the 1980s when we had lots of land to sell,” explained Council Member Mary Leith. “The income from land sales was always put in there. Rules in the ordinance for it says that to pull money out, we have to have a vote of the people. It was always meant to be money that keeps earning, just like the state’s Permanent Fund. 

“When we became a city in 1960, some land went with it,” she continued. “We got the last 20 acres the state owed us when we got the land for the River Walk Park.”

Discussion Tuesday night was whether a cap should be put on the city’s permanent fund for funds to be available to the city if needed.

Pete Hallgren objected to the idea, stating that he recalls the City was eventually broke when he arrived.

“The City Council worked hard to save money,” he stated. “Trying to spend less than we bring in. I’d like to take the most responsible way – don’t take out money we don’t need.”  

Hallgren stated the City is in a good position now and he would like to keep it that way. 

“The fund will grow faster if we don’t draw on it. My feeling is, if we don't need to distribute it, leave it in and watch it grow.”

Leith agreed but stated the council is just trying to determine how much it could take out if it was absolutely needed.

“We are currently standing at about $2.6 million,” said Leith. “It would behoove us to have a limited amount to draw on if needed.”

Mayor Igor Zaremba said he would be comfortable with a 3.5 percent cap, having that amount available for a rainy day.

“I’m not saying the city is intending to touch the money, but putting a barrier in case we do need to draw,” he explained. 

The measure passed, placing a 3.5 percent limit on withdrawing money from the City’s permanent fund.

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