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At a budget workshop meeting earlier this month, county administrator Rebecca Dickson recommended the Board of Supervisors adopt a series of financial guidelines that would provide parameters for budget planning, establish capital budget policies, debt planning and reserve policies.

Dickson’s office surveyed eight localities to comprise a set of best practices that should enhance long term financial stability.

In a handout provided to the board, Dickson listed the stated goals of the financial policy. They are:
• State guidelines and goals that will influence and guide financial management practices.
• Enhance short term and long term financial stability.
• Promote long term financial stability.
• Provide framework for measuring the fiscal impact of government services.

Regarding the budget process, Dickson recommended the county move toward a biennial budget including two year projections for revenues and expenditures. This would allow the county to consider four years of information when planning for future needs.

Capital budget items would be listed on a five year plan, reviewed and updated each year, that would identify priorities for upcoming years, and the county would have to identify costs and funding mechanisms regarding each project.

“You’re already doing many of these practices,” Dickson said.

Regarding debt policies, Dickson recommended that the “county utilize a balanced approach to capital funding utilizing debt financing, drawing on capital reserves and/or fund balances in excess of policy targets, and pay as you go appropriations.”

Net debt should not exceed 2 percent of the county’s taxable property values. The county’s net debt as of June 30 2008 was 1.8 percent. This year’s rate is yet to be determined.

Also, the ratio of debt service to general fund expenditures should not exceed 12 percent in a given year.

Reserve funds at the end of each fiscal year should amount to at least 20 percent of the annual adopted budget total. If the county dips into these funds resulting in a less than 20 percent balance, the funds must be restored within 36 months.

The board took an informal vote and decided to formally consider the guidelines at a future regular meeting.