What to do with $2 million?
Years of coming in under budget adds up to millions.
By Patrick Yost
The Morgan County Board of Commissioners have about $2 million to spend.
For more than 20 years, as far back as county data shows, the board has consistently added a one percent to three percent contingency fund to its annual general fund balance.
That fund has grown, according to County Manager Michael Lamar, to more than $5.5 million. That number represents an approximate 40 percent fund balance in relation to the county’s total 2007 $11 million general fund budget. Auditors would like to see the fund balance hover between 15 to 25 percent, or roughly $3.5 million.
So where will the money go?
Lamar said Friday that he would urge the commissioners to pay off the $1 million loan the board agreed to in order to purchase the creamery building, which now houses most county offices.
He said he would also begin to review capitol improvement requests submitted by department heads for the 2009 budget year to determine if the county could use the remaining money to purchase $1 million in capitol items ahead, a move that Lamar contends would save taxpayers money in the long–term.
The county’s fund balance has slowly been created over years of adding contingency collection to property taxes. Lamar said the county adds the one to three
percent contingency line item into the budget to protect the county against unexpected expenses.
“The reason you have a fund balance is because it’s a rainy day fund and cash flow,” said Dwayne Schlereth, a CPA with the Bates & Carter firm.
And lately, there has been little rain.
Lamar said as far back as 2002 the county has kept its fund balance near 39 percent. Following last year’s property revaluation where county property owners saw values jump more than $1 billion, from a county–wide valuation of $2.2 billion to $3.3 billion, commissioners reduced the county tax rate from 10.7 mills to 8.43 mills. However, even with the reduced tax rate, the revaluation and added inventory to the county’s property tax rolls, like the new Chik Fil A and Starbucks restaurants, the county is projected to collect more than $200,000 in property taxes in fiscal year 2008 compared to fiscal year 2007.
Lamar said the board has consistently come under budget for decades, a fact that created the fund balance and has led the county to a A+ bond rating. “We were told that for a government that didn’t have a track record for a bond rating that was the highest (a bond representative) had seen.
“It’s good fiscal stewardship to come under budget for 20 years,’ Lamar said.