County Lawmakers Come Full Circle On Fund Balance Policy, Plan to Stick With Policy in Place
After nearly six months of discussion Cortland County lawmakers have reached a consensus on a policy for how much cash the county should try to have on hand, the decision is to stick with the current policy that has been in place since 2004.
Lawmakers have been debating exactly how much money the county should have in fund balance, the account is like the county's savings account. The money can be used to cover unexpected expenses, help reduce taxes, or fund new projects and initiatives. The fund balance is generated when the county stays under budget or receives more revenue than expected in any given year.
Since the end of last year legislators have been debating exactly how much money should be in the account and what the money should be used for. Back in 2004 lawmakers passed a policy back that requires the county to have 10% of it's operating budget in the cash reserve. The idea at the time was to create a cushion to pay for unexpected expenses and avoid raising taxes.
At the start of this year the county had just under $13 million in the account, which was about a million dollars more than what the policy calls for. Some lawmakers argued that having 10% of the total budget was excessive and that the county was hoarding taxpayer dollars instead of funding needed programs and services or reducing the property tax burden. Other legislators felt that a little extra in the fund was prudent given the rising costs of mandates and the laundry list of capita improvement projects facing the county.
Yesterday legislators heard from John Shehadi with Syracuse based Fiscal Managers, the firm guides the county when it borrows money for major capital projects.
Shehadi informed lawmakers that the county's bond rating which is used to determine what interest rate the county pays on borrowed money is tied to the fund balance. Shehadi says the current policy of 10% of the total budget is a reasonable figure, he suggested the county could even increase the percentage if it were looking to improve its bond rating.
Following the discussion lawmakers opted to end the debate and continue with the current policy in place.
Budget and Finance Chair Kevin Whitney says he's glad the committee went through the process of reviewing the policy, he feels confident the county is prepared to respond to its financial commitments without overburdening taxpayers.
Right now the county has $11.3 million in the fund after committing funds for new 9-1-1 dispatch software and some other projects.