City Council is poised to exceed its policy goal for saving taxpayer dollars.

The result makes it likely that council will lock up millions of extra dollars in the city’s rainy day fund that could be used for improving services.

That includes city youth and adult recreation programs that a recent internal city report shows are virtually on a starvation diet compared with the robust spending on such programs in Alexandria, Hampton, Norfolk and other peer cities in Virginia.

A Free Press review of council’s plans for a projected $13.5 million surplus from fiscal 2018 that ended June 30 shows that the governing body is planning to move at least $5 million more into virtually untouchable “rainy day” accounts.

That would boost the city’s savings fund to at least $122.7 million or about $556 for each city resident, according to financial reports. And there is a prospect that City Council could push the savings total to $124.4 million, or about $565 per city resident, the reports indicate.

However, the policy goal that council approved in 2017 in concert with Mayor Levar M. Stoney’s financial staff would permit less money to be accumulated in savings balances: $115 million for fiscal 2018 when $690.7 million was budgeted in the general fund and $120 million for fiscal 2019, the current budget year that began July 1 and which provides for $719.9 million in the general fund.

The council goal calls for the city to have the equivalent of 16.67 percent of the general fund budget in savings, 3 percent in a contingency fund and 13.67 percent in the so-called unassigned fund balance.

Currently, there is $10 million in the contingency fund and $107.7 million in the unassigned fund balance the mayor controls.

Before the policy was changed, the city would have been required to maintain only about $92 million in the combined rainy day fund.

One proposal City Council is considering would boost the contingency fund to $14.5 million and the unassigned fund balance to $108.2 million. A second proposal also would increase the unassigned fund balance by $500,000, but increase the contingency fund to $16.25 million.

The extra money would boost the total savings to at least 17 percent for fiscal 2019, a small but significant difference when more than $100 million is involved.

The balances in the savings accounts do not appear in budget documents and only show up in the annual audit.

Still, the money now in savings represents one of the city’s biggest uses of taxpayer dollars, eclipsed only by the expenditures for public safety and public education.

The totals in savings also represent five times the tax dollars the city spends on parks, recreation and culture and four times the amount spent on public works to clean, repair and pave streets, grade alleys, prune trees and pick up trash.

Councilman Parker C. Agelasto, 5th District, was the only member of the governing body to respond to a Free Press request for comment on the pending decision to overfill the savings accounts. He said that council can save more than the policy goals require. He also acknowledged that none of the money in the rainy day fund is being invested. He said that council has yet to set a policy to ensure that the saved money generates interest income, reducing the pressure on the council to set aside surplus dollars.

Finance Director John B. Wack confirmed the current policy is to avoid putting any of the savings “at risk.”

He said that the city has relied on the savings during the year to pay expenses while waiting for the inflow of fresh dollars as taxpayers begin to pay property tax bills, beginning in the early winter and continuing into the summer.

By having the savings, Mr. Wack said the city no longer has to pay expensive interest to borrow money to carry it through the lean period before new tax payments begin flowing into the city’s coffers. The city stopped issuing revenue anticipation notes in 2011.

However, with the city’s population and property values rising, the city is borrowing much less from savings to keep going during the lean period.

According to a city financial report, nearly $100 million of the rainy day savings sat in non-interest bearing accounts in fiscal 2018, meaning it was not needed to temporarily cover expenses.

Those saved dollars could have generated between $450,000 and $2.5 million if the money had been in an interest-bearing account or a blue chip investment.