Greene Board Carefully Considering Next Step on Reserve Fund

By Pauline Hovey, Greene County Field Officer

Not surprisingly, despite significant discussion, there’s no decision yet from the Greene County Board of Supervisors on establishing reserve fund policies.

At a board workshop on Tuesday, Robert Huff, CPA, with Robinson, Farmer, Cox Associates presented the latest guidelines recommended for reserve funds: retain 15 percent of general fund expenditures—a much smaller percentage than the 26 percent of total budget the county currently has on hand.

Huff also recommended the board have a cash management policy separate from the reserve fund, suggesting the county reinvests any “leftover money” for capital projects. With Greene County facing increasing growth and pressure for impending capital projects, Huff’s third recommendation seemed especially timely: review the Capital Improvement Plan (CIP), identify priorities within the plan, and ensure the board is retaining enough money to handle the CIP.

Between water impoundment, new school buildings and expansions, fire and rescue services, and other growing needs as the county continues to develop, the board will not have a dearth of projects on which to spend any “leftover” funds.

In their paper, Benchmarking and Municipal Reserve Funds: Theory Versus Practice, The University of South Carolina’s Michael Shelton and Charlie Tyer wrote of the tightrope localities face regarding the proper balance in a reserve fund:

… there are many sound reasons for a government to maintain an adequate fund balance. At the same time, it is also possible for a governmental entity to accumulate an excessively large fund balance. An excessively large fund balance would be one beyond the contingency and cash flow needs of the community in the short term, and which lacks any planned use for other longer term projects or expenditures. In such a case, taxpayers are either paying unnecessarily high taxes or other charges, or they are not receiving an adequate return on their tax dollars in services and facilities.

Hence, the need for city policy makers to engage in some type of planning, but also to have some yardstick to use to set a general fund balance policy.

Discussion ensued among the members of this mainly conservative board, ranging from recommendations to set a policy of 15 percent of the total budget to as much as 25 percent of the budget. The end result? A commitment to review the CIP and a request for Deputy County Administrator and Finance Director Tracy Morris to draw up a draft policy with her recommendations for review at the next board meeting. Supervisors are tackling this issue slowly, carefully considering their options, since whatever policy they set will determine the county’s financial future.

As for increasing traffic in Greene, the board received an update during its quarterly meeting with the Virginia Department of Transportation (VDOT) on the possibility of adding/widening turn lanes from Rte. 29 North onto Rte. 33 West—a congested intersection causing traffic flow problems now that the Super Wal-Mart has opened. VDOT reported that the project will take a little longer than suspected because of the amount of engineering involved. Apparently, VDOT discovered a drainage problem due to the difference in elevation between the two roadways. The added cost of engineering may mean the turn lanes will get designed, but when the turn lanes will actually be constructed is anyone’s guess due to the limited funding available.

Pauline Hovey is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  If you find this report helpful, please consider supporting the Free Enterprise Forum.  To learn more visit


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