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2 <br /> 1 • Use for natural disasters and emergencies <br /> 2 • Cash Balance cushion <br /> 3 <br /> 4 S&P Scorecard (graph) <br /> 5 <br /> 6 Moody's Scorecard (graph) <br /> 7 <br /> 8 The Ten `AAA' Rated Counties of North Carolina (graph) <br /> 9 <br /> 10 General Obligation Bond Rating Scale (graph) <br /> 11 <br /> 12 Audited Unassigned Fund Balance as a Percent of Expenditures—General Fund (graph) <br /> 13 <br /> 14 Commissioner Dorosin asked if these numbers are considered by the rating agencies <br /> 15 when rating the County. <br /> 16 Gary Donaldson said yes. <br /> 17 Commissioner Dorosin asked if the rating agencies consider the County's policy or the <br /> 18 funds that the County actually has available, when conducting its review, and rating the County. <br /> 19 Gary Donaldson said the agencies look at what is actually available; for example, if the <br /> 20 policy is 17%, but the County exceeds it and has 18.5%, then the rating agency would consider <br /> 21 the higher of the two numbers. <br /> 22 Commissioner Price asked if the rating is conducted at a particular time of year. <br /> 23 Gary Donaldson said the County is required to provide disclosures to the rating agency <br /> 24 at the end of the fiscal year. He said a full review is done when a county issues bonds. <br /> 25 Commissioner Jacobs asked if Gary Donaldson could identify the last time the County <br /> 26 did not have an overage in its fund balance. <br /> 27 Gary Donaldson said probably during the past recession. He resumed the presentation: <br /> 28 <br /> 29 Best Practice Unassigned Fund Balance <br /> 30 > In Summary <br /> 31 • GFOA Recommends Unassigned Fund Balance at 2 Months of Expenditures or <br /> 32 16.7% <br /> 33 • North Carolina AAA Rated County Peers Maintain at Least 2 Months; one <br /> 34 exception <br /> 35 • Strong Fund Balance provides Financial Bridge in Recession and Emergencies <br /> 36 <br /> 37 General Fund Cash flow (chart) <br /> 38 <br /> 39 Gary Donaldson said the low period for fund cash flow is usually during tax receipt <br /> 40 timeframes. <br /> 41 Commissioner Jacobs asked if there is a level of fluctuation in the fund balance that <br /> 42 would cause the rating agencies to take action. <br /> 43 Gary Donaldson said changes that are 2% or lower, and could be explained, would likely <br /> 44 not result in action being taken. <br /> 45 Commissioner Dorosin said Moody looks at a 5-year window. <br /> 46 Gary Donaldson said when considering the broader picture, the County is looking to <br /> 47 develop a 5-year plan, which the rating agencies favor. <br /> 48 Commissioner Rich asked if the rating agencies prefer counties to have a fund balance <br /> 49 policy. <br />