In two columns last fall, I asked: Does County government commit too much surplus revenue for spending?
Progress on unallocated closeout surplus
In his proposed FY 2019 budget, County Manager Mark Schwartz notes that he has whittled down the level of surplus funds available at closeout.
“[T]he amount of funds that are ‘discretionary’ for allocation at closeout have been reduced annually ($11.1 million in FY 2017, compared to $17.8 million in FY 2016 and $21.8 million in FY 2015). Of those closeout funds that have been made available, immediate spending has been limited to commitments already made by the Board or for emergency needs,” the budget wrote.
This is a positive step.
More budget reforms
However, of these closeout funds, the majority remaining after allocating the APS revenue-sharing portion is automatically allocated to “commitments already made by the Board.” Missing is a clear, written policy explaining how, when and why these other “commitments” were made.
The County Board essentially has allowed the manager to allocate/spend the remaining closeout funds without adequate opportunities for residents to weigh in on millions of dollars of spending.
The Civic Federation has asked that a fair and reasonable portion of surplus funds be plowed back into the coming-fiscal-year budget to reduce the need for a tax-rate increase. County officials, however, claim that best practices dictate that surplus funds be used only for “one-time” purposes since the county cannot rely on future surpluses to meet ongoing needs.
But there is no written, publicly available policy clearly defining what a “one-time” expenditure is, and this “one-time” money is often spent on recurring needs.
What experts say
At a County Board work session last spring, Public Financial Management, Inc. (PFM) described how other jurisdictions manage their fund balance accounts.
PFM noted that Fairfax, Loudoun and Prince William counties have a 10 percent operating/contingency reserve, twice Arlington’s level.
PFM also observed that:
- Arlington’s General Fund reserve policy levels are below the median level and among the lowest in the triple-A group (Arlington’s bond-rating peer group).
- FY 2016 is the second consecutive year of decline in the General Fund balance ratio, and this could begin to concern Moody’s, if it becomes a trend.
More County Board oversight
Too often, committed and allocated funds are established in the fund balance with substantial cash accumulating over time, apparently with little or no monitoring of the reasonableness of the balances. New York State’s Local Government Management Guide on Reserve Funds warns against this.
“Reserve funds should not be merely a ‘parking lot’ for excess cash or fund balances,” the guide wrote.
The County Board should answer questions like these:
- Has the financial purpose served by each reserve fund been identified and published?
- Has a written reserve fund policy been developed and published?
- Has the Board reviewed all reserve funds currently established, and determined if the balances in each are reasonable?
The County Board should draft and present to the community for resident comment written policies governing how, when and why the Board commits and allocates:
- Funds to the General Fund’s fund balance
- Surplus funds, including closeout funds
A portion of closeout funds could be committed to increase the operating reserve or contingency funding, until the total of such funds reaches 10 percent of the General Fund. Another portion could be committed to the coming year’s budget to build in more flexibility.
The week started as summer and is ending, unmistakably, as fall. On the plus side, we have a stretch of crisp, sunny days ahead, with the exception of some rain…
A 5 BD/2 BA home with a light-filled den and screened back porch is included in Open Houses.
Early voting got off to a muted start today (Thursday) at the Arlington County government headquarters in Courthouse. “We had a line of five voters when we opened at 8…
Wakefield High School and Claremont Elementary School were secured today in response to reports of gunfire in nearby Bailey’s Crossroads.
Now you can have fun with your family and friends when deciding where to eat!
Just hop aboard The Lunch Train and set the destination for: breakfast, brunch, lunch, dinner, or nightlife!
– No app necessary. Simply go to the website if you’d like!
– No account necessary
– Use your current location or a desired location
– Add restaurants you’re interested in, invite your friends, and play the game!
Lyon Park & Ashton Heights’ biennial home & garden biennial tour is back. The tour will include contemporary custom homes, older historic bungalows as well as renovated properties. One of the stunning homes on the tour is pictured above. In addition to beautiful & unique homes, the Villa & Vistas ’22 event will conclude with a festive reception at the Lyon Park Community Center at 414 N Fillmore Street, Arlington VA 22201. What could be better right?
All proceeds from this event will go to the Lyon Park Citizens Association (LPCA) towards our neighborhood jewel & hub, the Lyon Park Community Center (LPCC).
When: Sunday, October 2nd, Noon – 4 PM.
Where: Meet to get your tickets and the tour map at the Lyon Park Community Center (414 N Fillmore Street) We will have a table with information outside.
Are you ready to jump into homeownership or started considering it but don’t know where to start? Financial preparation is key when thinking about purchasing your first home and the first step to getting pre-approved. Join ACFCU for our Homebuying