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County finance director Leo Hunt’s warning to the county commissioners at Friday’s jail tour meeting raised a few eyebrows. “You need an additional $6 million to bring the fund balance to what it should be,” Hunt said. To do that would require more than a 25-cent tax increase.
The N.C. Local Government Commission recently sent a letter to the county recommending they bring the fund balance up to the fund balance of comparable counties, 26 percent. At the end of the fiscal year, the cash available in the general fund will be near the bare minimum 8 percent recommended by the state.
Granted, the county will be repaid the $2.5 million it is owed to get Water District V up and running, but Hunt’s announcement still speaks to the seriousness of continuing to rely on general fund savings when there is a cash crunch.
There have been unforeseen challenges, such as the additional money needed to complete the jail construction, the $2.5 million contribution to the Williams Township School reconstruction and the General Assembly’s continued insistence that counties help pay for Medicaid expenses, but these issues didn’t occur overnight.
The fund balance has been declining for several years while expenditures have increased.
Yet, money needs to be available for more infrastructure that will promote development and revenue. That’s hard to do when you’re playing catch-up all the time.
It will be interesting to see what the new budget looks like because the county can’t continue on its present path. Raiding the fund balance is no longer an option because there is little fund balance to raid.