By: Michael Campbell | Twitter: @itsthesoup
Posted: Feb. 5, 2018 | 7:10 p.m.
PRINCE GEORGE – Roughly four months after the Prince George Board of Supervisors was unable to take action on returning the county’s fund balance policy back to its previously approved levels, the board, now with two new faces is slated to discuss the matter during their upcoming budget work session to start the month of February.
During their second meeting to close out the month of January, Supervisor T.J. Webb took the lead in asking that the matter be placed on the last week’s meeting agenda to allow for further discussion of the topic now that the board’s two new members, Supervisors Floyd Brown, Jr. and Marlene Waymack are seated and able to provide their input on a topic that has been discussed a number of times over the course of the 2018 financial year.
At the heart of the matter, Supervisor Webb said he has struggled to provide answers to constituents about what exactly is the reason why the county has yet to return to the previous unassigned fund balance policy after initially reducing the rate from 15 percent to 12.5 percent in May of 2014 in an effort to, according to county documents, “accommodate [the] completion of certain capital projects” at the time.
Documents from the time explained, “If the County were to drop the minimum fund balance policy from 15% to 12.5%, that would free up an estimated $2,500,000” that went toward a series of capital projects proposed by County Administrator Percy Ashcraft that were to be paid out of fund balance in the amount of $1.97 million.
Prince George County’s financial policy guidelines define the county’s unassigned fund balance as the “total fund balance in the general fund in excess of nonspendable, restricted, committed, and assigned fund balances.” Currently, the unassigned fund balances at the close of each fiscal year “should be at least 12.5 percent of the total annual general fund expenditures net of [inter-fund] transfers and inclusive of the Prince George County School Board’s expenditures.”
When the matter was discussed previously in September, the then-Board Chairman Bill Robertson said, at the time when the percentage was reduced to 12.5 percent, a commitment was made by the sitting board to return the percentage back to 15 percent within three years, which would have been during 2017.
Entering 2018, Webb said he wonders why the move hasn’t been made to return to the county’s previous minimum fund balance target.
“I am of the mindset that the previous Board before me made a commitment and has not been able to repay it but, now we are in a position to refund it,” he said.
According to documents from the Prince George Finance Department, the fund balance at the end of the 2016 financial year on June 30, 2016, was nearly $19.5 million, or 19.8 percent of General, Debt, and School Fund Expenditures. In a September 2017 memo to supervisors when the matter was brought before supervisors, finance director Betsy Drewry reported that both FY2017 and FY2018 Fund Balance levels “are expected to exceed 15 percent of operating and debt expenditures” with conservative projections of $16.9 million, or 15.8 percent for FY2017 and $17.4 million, or 15.9 percent in FY2018.
Following the county’s annual audit, the county’s unreserved General Fund Balance as of June 30, 2017, was $24,972,020.
With actual and projected fund balance numbers showing percentages well above the current minimum, Webb believes now is the time to allow the county to begin saving more.
“I think saving is always a good thing,” he remarked. “It would never hurt the county to better position itself for things like borrowing or anything else.”
His comments echoed his sentiments in September when both he and former supervisor Robertson sought to raise the minimum back to at least 14 percent. At that time, Robertson explained that having the fund balance back up to either 14 or 15 percent would help the county maintain its bond rating, an AA+ rating from Fitch as a number of projects loom ahead of the county that will require some form of borrowing, such as the proposal to build two new elementary schools in the county.
In September, a motion was made to return the fund balance to 14 percent by a majority vote, but the measure failed to get a second and no action was taken on the matter. A few months later as Webb brings the matter back to the board, he said he wants to revisit the issue with the county’s newest representatives on board, who both stated their support for discussing the matter next month.
“That board made the commitment to replenish it within three years,” Webb said of the decision in May of 2014 to reduce the fund balance. “There have been several events over the last few years that we have opted not to restore it. The citizens have asked me, ‘Say as you do, do as you say,’ and that we have the money, what is the issue? Go ahead and refund it.”
Supervisors will hear from Drewry and others as they gather in the county boardroom on Tuesday, February 6 at 6 p.m. for their first budget work session. The meeting is open to the public.