“We cannot continue to drain our fund balance.”
– County manager Heidi York
Alamance County’s manager Heidi York has insisted that the dose of tough love she recommends for the county’s departments and agencies is meant to relieve a very real affliction threatening the county’s financial health.
In her presentation on Monday, York implied that the board of commissioners has become increasingly bold in its use of the financial reserve, or “fund balance,” that’s attached to the county’s general fund.
In any given year, the county’s leaders may pencil in some of the unencumbered cash in this fund to cover their predicted expenses, although in most cases, these savings remain undiminished, or may even be augmented, as revenues beat expectations and expenditures come in lower than anticipated. York nevertheless told the commissioners that have siphoned an increasing amount of cash from this rainy-day fund. She recalled, for example, that the county’s current budget calls for an unprecedented $11 million in “unassigned” savings to cover a shortfall in the general fund’s outlays.
“That is the largest amount in the history of Alamance County,” she added during her presentation on Monday. “We must now consider rebuilding. We cannot continue to drain our fund balance.”
York went on to inform the commissioners that, as things currently stand, the general fund’s unassigned savings will fall to 15.1 percent of its yearly expenditures. She observed that this figure is far below 20 percent threshold that the commissioners had previously set as their goal for these savings. As a result, the county no longer has the spare cash that it has previously funneled into capital improvements.
York also warned of a potential backlash from the county’s bond rating agencies should its leaders continue in their cavalier attitude toward the general fund’s savings.
“Why does this matter?” she inquired rhetorically. “It’s because the ratings that we have actually save taxpayers money by keeping our borrowing costs low.”
