Bill 4-9 Reserve fund

The city shall move 1 month's tier in USD to a separate line item (reserve account), and make those funds unavailable for other use.

Funds in the account shall be disbursed at the discretion of the RA to pay recurring expenses in the event of a sudden and unexpected drop in $USD income.

The city shall augment this account as funds are available until it contains enough funds to pay all recurring city expenses for a period of three months absent other income.

Excellent.

We may want to set a target amount (a cap), tho. There's no point in having too much in such a fund, unless it's income generating and thus a part of our revenues. Either a dollar amount, or a percent of annual revenues, or perhaps simply "x" months operating expenses.


Sudane

I was thinking x month's tier or x month's operating expenses, FWIW.

If it is a "reserve fund" that is to be "unavailable for other use," what CAN it be used for? My understanding of a reserve is that it is a reserve for some contingency, so that when that contingency occurs, the money can be used. The bill seems to propose a permanent status of limbo for these funds.

And on what justification will it be later increased, as the proponent suggests? On what grounds would someone put money forever out of use?

Why is the proposal different than one of burying a box of money in concrete beneath Giants Stadium in New Jersey? I can understand entombing evidence, but not cash.

Frank, you're taking a simple and reasonable concept to the point... what's the Latin expression... "ad absurdum"? ... to the point of the ridiculous.

The conecpt of the reserve, and I have not discussed this at all with Claude, so his feelings may differ, is that if the City is faced with an "existence-threatening" financial situation (i.e. some turn of events causes there to be insufficient funds for the monthly LL fee), the reserve would be tapped.

Since it's a "reserve", it's understood that it's not spent in the normal course of things. Should the "event" happen, the RA or whoever is designated by the Constitution with ultimate financial decision making authority (not a very clear issue) decides whether to use it.

A reserve is a normal and reasonable thing for every financial entity, life being what it is. Non-profits, such as the City, will routinely do such "set-asides". For-profits also will have something of the sort if they are well established, but they probably won't call it a "reserve".

The concept is reasonable, and a natural extension of a cautious way of operating. Your post makes it seem ridiculous, which it is not.


Sudane

My intent is that, in the event of some significant interruption in city income (people stop making land payments/the in world payment system stops working/ the $L totally crashes) we know there will be US dollars "in the bank" to keep the city running for at least a month. while things get put back together. We have sufficient funds to implement the reserve. It's a matter of imposing the discipline to do so.

So, in answer to your question , "for what purpose?", I would say the fund exists to pay recurring expenses in the event of a sudden and unexpected drop in $USD income. How big it needs to be depends on the answer to the following question.

In a "worst case scenario" where the city dropped down to four or five active citizens, as happened around the transition to the private sim, how many months does the city need to reassemble itself?

I am quite familiar with the concept of financial reserves, and with the pitfalls in the phrasing of legislation. I'm also painfully familiar with the adverse consequences of later generations trying to discern legislative intent from inartfully drafted but well-intentioned legislation that relies upon inference to convey that intent. My question points out a problem not with the concept, but with the way in which the legislation attempts to articulate it.

If the purpose of the reserve is to be held until such time as the RA votes to release it in order to pay for unexpected costs, then perhaps the legislation should say so. Or is it intended that it remain as a permanent addition to capital that cannot be invaded, regardless of consequences, as protection for creditors in the event of insolvency and liquidation?

As presently drafted, there is no provision for its release. In fact, as presently drafted, the legislative proposal bars any release of the reserve for any purpose. This leaves it expressing an outcome contrary to your expressed intent.

Language contrary to the expressed intent of the drafter is vulnerable to the other legislators' misunderstanding the results of their voting in favor of it. For that reason, legislators sometime have been known to deliberately make bills ambiguous, so that they can later maneuver them to purposes other than those for which they were thought intended when passed.

I agree that the proposed legislative language is absurd as drafted. Illustrating its absurdity is the point of my question. I'm suggesting that the language should be amended to more clearly express its intent.

Has any member of the RA a proposed amendment that would address my question, or do you prefer to allow the legislative history to stand as it now is?

Frank-- two things

1)An amendment can't happen until an actual meeting (today at 3 pm SLT, BTW) Your point about the ambiguity of the bill as I originally posted it is well taken. I will probably modify the bill prior to its official consideration this afternoon.

2)I don't particularly appreciate your description of my efforts as 'absurd'. I'll acknowledge they were vague and hurried. Often when I throw a bill out, it does not spring fully formed, as it were. This is quite intentional. I want the whole RA to shape the legislation as it goes through the process. Often , putting a bill, however textually incomplete, into consideration is the most effective way to get an issue (say, "Shall we have designated reserves? How much and for what purpose?" onto the table. For the bill to be absurd, you must assume that it was my intent that the bill become law as is, which it wasn't.

One could also make the argument that since the initial value of the account was expressed in terms of tier for a set time period, there was at least an implicit intent for the reserve account to be used to pay tier costs.

I was not characterizing your efforts. What I said was: "I agree that the proposed legislative language is absurd as drafted. Illustrating its absurdity is the point of my question." (emphasis added). I was characterizing the language of the bill, not your efforts.

I was also agreeing with Sudane's comment that "Frank, you're taking a simple and reasonable concept to the point... what's the Latin expression... "ad absurdum"? ... to the point of the ridiculous." Sudane is exactly correct. I was utilizing an ancient logician's tool, described as follows in Wolfram Research's MathWorld resource (among many other places) as follows:

If you try to focus more on the language of the bill, and less on those individuals who are offering constructive criticism, I suggest you'll be more likely to bring forth a clear statute.

*puts mod hat on*

Chill, people.


Claude, Frank is correct insofar that your amendment is nonsensical as stated, although your intent is clear and I agree with it. Frank, please try to use more precise language in the future.