Eye on the county’s reserve fund

By Susan Gibbs

At the candidates’ forum held for Greene County Board of Supervisors candidates held last fall Michelle Flynn, now supervisor-elect for the Ruckersville District, called for a common, simple language for the county’s reserve fund.

Greene County Administrator John Barkley

Greene County Administrator John Barkley

Greene County Administrator John Barkley has provided Eye on Greene with the simplicity, and Eye on Greene is taking the liberty of establishing the common language.

“Our policy is to carry 15 percent of the total budget in reserve, plus one month’s worth of expenses,” explains Barkley. “For example, if you look at a snapshot at the end of Fiscal Year 2014 our total budget was $55,586,527. Fifteen percent of that is $8,337,979, and equivalent monthly expenses are $4,632,210.

Added together, these two numbers bring the reserve fund minimum to $12,970,189.”

So all one has to do to understand it is to compare it to a household budget, based on an annual income of $55,586,527. At least 15 percent of that income, plus the cost of one month’s bills, is placed in a savings account, or in the county’s language, a reserve fund.

The county finished last year with more than $2 million above the minimum in “savings” or, in the reserve fund.

“At the end of the last fiscal year we had a reserve fund balance of $15,730,964, which was $2,760,775 over our minimum reserve. We are awaiting the final report on FY 2015,” Barkley says.

He also explains the county’s biggest challenge right now is to balance its structural deficit to allow for the water and sewer system—including reservoir-related expenses and debt service payments for infrastructure and facility expansion—to be financed by the users, as opposed to the burden being placed on county tax payers, which has been the case for many years.

“We are making some headway into creating a better balance and we fully expect that to be reflected in the FY 2015 audit report,” Barkley says. “I will be introducing a discussion with the new Board of Supervisors about this during the upcoming budget development process.

“Since such a large portion of our total budget is made up of state and federal dollars, should the county be carrying reserves on their behalf, based on the entire $56 million?” Barkley will be asking our supervisors.  “In other words, shouldn’t the base used to calculate our reserve be more along the lines of $36 million rather than $56 million.  If that were the case, it would translate to our reserve fund balance being more like 43 percent of the ‘local budget.’

“It’s also important to remember that our reserve fund balance is a one-time look, at June 30 of each year, and fluctuates throughout the year depending on cash flow demands.” Barkley concludes.

In a nutshell, it fluctuates, just like a household savings account.

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