Join Club

Peter’s Take: The Arlington County Surplus — Spend, Reserve Or ‘Refund’?

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

In September, I explained why county government should temporarily defer until the following spring allocating any annual close-out surplus.

Here’s that column’s most up-voted comment (24 up votes):

Spend a $17.8M surplus one year, then raise taxes the next year by $11.1M. I don’t care who you are…this single fact should make smoke spurt out of your ears.

Today, I pose a related question: does County government commit or earmark too much surplus revenue for spending rather than beefing up reserves or offsetting tax or fee increases? (The final 2017 close out report was not available when this column was submitted.)

An October 3 Arlington County Civic Federation report (drafted by former Deputy Arlington County Treasurer John Tuohy) analyzes the County’s FY 2016 General Fund (GF) Fund Balance, an account that receives surplus close-out funds (collected revenues minus budgeted expenditures) at the end of the June 30 fiscal year.

Below, you can see how money in the GF Fund Balance is allocated:

What Portion of the Fund Balance Is Reserves?

Of this $191,243,859 in the GF Fund Balance, the County Board sets aside a “no-touch” operating reserve of $59,885,262 — or about 5.16% of budgeted revenues — for the County AND Arlington Public Schools. Board policy restricts use of these reserves to unforeseen emergencies (e.g., natural disasters, economic emergencies).

There is an additional $5 million self-insurance reserve and a small, separate “economic stabilization” contingency reserve within the GF Fund Balance.

Experts, including bond rating agencies, set 5 percent as the minimum operating reserve, but many recommend reserve levels as high as 10 percent of operating expenses. (Even when the percentage remains constant, the bigger the budget, the more you must set aside for reserves.)

Committed Vs. Assigned

By County Board action or policy, the rest — $131,358,597 — is committed or assigned (earmarked) for spending. Committed funds (approved by Board action) cannot be reallocated without a new Board action. Assigned funds (earmarked by the County Manager based on Board policy) can be reallocated.

Allocating Unallocated Close-Out Funds

During the close-out process, the Manager has historically identified a modest amount of surplus funds that are not yet allocated for spending or reserves:

Using County Board policy guidelines, the County Manager recommends how these unallocated surplus funds could be allocated.

Conclusion

By policy and practice, the County Manager does not recommend allocating a portion of the unallocated close-out surplus to offset increases in taxes or fees for the coming fiscal year. (Each 1-cent increase in the real estate tax rate currently generates roughly $7.4 million in ongoing revenue.)

Should the County Board take a different approach next month? Should the county allocate less for spending and more for reserves or to offset tax/fee increases?

I will discuss these questions further in next week’s column.

Recent Stories

Morning Notes

Planning for New DCA Projects — “It passed below the radar screens of the traveling public, but the Metropolitan Washington Airports Authority on March 20 moved a major step forward…

Good Thursday evening, Arlington. Let’s take a look back at today’s stories and a look forward to tomorrow’s event calendar. 🕗 News recap The following articles were published earlier today…

Last year, an attempt to broaden the Arlington police auditor’s access to police records quietly fizzled before reaching the public for discussion.

George Mason University’s new Fuse at Mason Square in Arlington, is poised to become a 345,000-square-foot collaborative and digital innovation space in the heart of the Rosslyn-Ballston Corridor. “As Mason expands in…

Award-winning drag queen Tara Hoot is bringing her Family Fun Story Time Brunch to Arlington at Freddie’s Beach Bar! Saturday April 6 at noon! Join Tara for songs, stories, puppets, bubbles and joy! It’s not just stories, it’s a SHOW that’s perfect for kids and kids at heart–fun for everyone! Plus a tasty brunch at Freddie’s! Click the link and make your reservations now! ❤️ 🫧 🌈

Submit your own Announcement here.

The Summer 2024 STEAM (Science/Technology/Engineering/Arts/Math) Fellowship application is now open! Apply by April 15 to be considered!

The STEAM Workforce Development Teacher Fellowship provides Arlington Public Schools (APS) high school, middle school, and elementary school teachers with opportunities to learn about workplace needs in STEAM-related fields and for them to use the experience to enhance student learning to match workplace expectations in a selected industry. STEAM Fellows participate in a three-week summer fellowship, receiving a $4,000 stipend upon completion.

Applicants planning to pursue a fellowship in the arts must demonstrate how they will build connections between the arts and science, technology, engineering, or mathematics.

Click the button to learn more, share, apply, and see the variety of fellowships completed in previous years.

Read More

Submit your own Announcement here.

Free Right-Sizing Workshop – How to Get Rid of Your…

Cody Chance and Dick Nathan of Long & Foster are hosting a free workshop at our office on Cherry Hill Rd. (formerly Lee Highway) on the topic of “down-sizing” Thursday, March 28 from 5:30-7:30. We have created a workbook with

Portofino Italian Wine Dinner, April 6, 6:30pm

Four course Italian dinner, paired with 2 wines each. The wines will be served “blind” and notes on each wine will be discussed. The event is coordinated with Elite Wine Importers and The Portofino Restaurant. The dinner is on Saturday,

×

Subscribe to our mailing list