Agenda - 10-04-2016 - 6-a - Minutes

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17 1 Gary Donaldson said when the audit results are received, and a 5-year financial plan 2 created, it will be easier to determine what the fund balance should be. He said a draft 5-year 3 plan will be completed by January 2017. 4 Bonnie Hammersley said the rating agencies want policies and 5-year financial 5 forecasts, but it is up to the elected officials to determine the policies. She said the 6 organization must be sustainable, which is dependent on economic, environmental and social 7 factors. She said no one knows the magic number, but if there are policies in place and the 8 County is sustainable, then the number is what the elected officials want it to be. 9 Commissioner Jacobs said the decision to be fiscally conservative was made to 10 navigate the recession years ago, but there have been surpluses every year since. He said 11 there has to be a relationship to interest rates. He said it does seem reasonable to change the 12 fund balance amount now. 13 Commissioner Jacobs said he would not want this to be a floating target, and having 14 enough for two months expenditures is a starting point for a discussion. 15 Commissioner Burroughs said it does not take a large change to get some revenue. 16 Commissioner Dorosin said when people are being taxed, and there is an annual 17 surplus, it is unfair. He said there are additional needs, for which the funds could be used. 18 Commissioner Burroughs said the Manager and staff have worked hard to tighten the 19 budget, and there is still an overage. 20 Bonnie Hammersley said, over the last two budgets, she has been able to use some of 21 the surplus for the betterment of the County. She said she adjusts the budget to what is 22 available, and there are controls in place to follow the policy. She said the policy sets a rule to 23 follow. 24 Commissioner Dorosin suggested lowering the fund balance to 16.2%. 25 Chair McKee said he would not oppose going to this rate, but he sees two issues: the 26 fund balance, and the excess fund balance that exists each year. He said it is a question of 27 spending it on the front end, or spending on the back end, as the fund balance always seems to 28 get fed back in to the next budget. He said if the balance is moved to 16.2%, then next year 29 there will be $1 million to reduce taxes or spend. He asked if there is a million dollars savings 30 in the first year only, or every year going forward. 31 Gary Donaldson said the fund balance is appropriated. 32 Chair McKee clarified that the fund balance is only appropriated down to 17%. 33 Bonnie Hammersley said yes. 34 Gary Donalson said after the fund balance is appropriated, a projection is done in terms 35 of how that metric aligns with the policy. He said this exercise happens each year. 36 Chair McKee said he still does not understand an answer to his original question as to 37 whether there will be savings every year. 38 Gary Donaldson said there will be revenues and expenditures every year, and there has 39 always been an appropriation of some level of fund balance. He said there is a target 40 percentage that will be adhered to, and there will be a continuing savings every year. 41 Commissioner Pelissier said the $1 million will not seem like a lot going forward, and it 42 will not stretch as far in the years to come. She said there will always be more requests and 43 additional monies needed. 44 Chair McKee said his reservation is simple: he fears that the Board is doing the 45 standard government tactic of grasping for more money to spend. 46 Commissioner Burroughs said it will be a million more dollars of services that the Board 47 will be able to provide, and that is the Board's job. She said there are needs for which more 48 money must be grasped. 49 Commissioner Rich said the excess money will be worked into the new budget, and the 50 Board will spend the money up front rather than at the end of the budget.