By. Brent Wilson, Greene County Field Officer
At their July 10th meeting the Greene County Board of Supervisors endorsed a financial reserve fund policy to set a minimum balance in the County coffers. The proposal, which had been discussed at four different meetings over the last three years, passes 4-1 (Frydl – No)
The policy sets a 15% (of the annual budget) basic reserve plus an additional amount to cover one month’s average county cash flow. The 15% minimum had been proposed by auditor Robinson, Farmer, Cox and Associates at their October 11, 2005 meeting.
Working on the back of the envelope, the new policy equates to roughly $6 million and $4.5 million, respectively, for a total of $10.5 million. This is nearly 3 months of operating funds. To calculate the latter amount, the BOS used the gross outflow of funds even though the county pays less than 2/3rds of this amount with local taxpayer funds. These absolute amounts will fluctuate as the budget is reset each year.
This begs the obvious question – what will the Board of Supervisors choose to do with the excess Reserve Fund of approximately $5.5 million? And one layer deeper is the question, why wasn’t the policy set sooner – before the reserve fund became overfunded by over 50%?
Supervisor Jim Frydl agreed that taxpayers have been “overtaxed to build the fund” given the new policy. This is money that the taxpayers in Greene worked hard for and now it is determined that they have paid too much.
So rather than act to return the excess revenue, the BOS elected to assign these extra funds to three capital projects: additional School Funding, Water and Sewer and Water Impoundment.
The Free Enterprise Forum is not convinced that the reserve fund policy is a simple as it could be but we applaud the Greene County Board for enacting a policy after years of discussion.
In a perfect world, government would only tax exactly the amount needed for operation of governmental functions. We recognize that we do not live in such a perfect world and appreciate efforts to utilize “excess” funding on one time capital costs rather than raiding the windfall cookie jar for operating expenditures. It is important to note the school expenditure is for operating expenditures.
The largest lesson in this multiple year saga is the need for increased transparency and Board understanding of Greene County’s financial documents. While it should not require a CPA to be a member of the Board of Supervisors, each and every member has a fiscal responsibility to understand how the government finances work.
Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.
The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you. To support this important work please donate online at www.freeenterpriseforum.org