Agenda - 05-09-2017 - 2. Financial Policies Discussion (General Fund Balance and Debt Management)

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ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 9, 2017 Action Agenda Item No. 2 SUBJECT: Financial Policies Discussion (General Fund Balance and Debt Management) DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: 1. Fund Balance Policy Gary Donaldson, 919-245-2453 2. Debt Management Policy 3. PowerPoint Presentation (To be provided under a separate cover at the meeting) PURPOSE: To provide update on the status of the County's Financial Policies. BACKGROUND: On April 5, 2011 the BOCC adopted a series of financial policies including: General Fund Balance Policy: • The County will strive to maintain an unassigned fund balance in the General Fund of 17% percent of budgeted general fund operating expenditures each fiscal year. The amount of unassigned fund balance maintained during each fiscal year should not fall below 8% percent of budgeted general fund operating expenditures, as recommended by the North Carolina Local Government Commission. Debt Management Policies: • The County will maintain its net bonded debt at a level not to exceed 3% of the assessed valuation of taxable property within the County. • The County will strive to maintain its annual debt service costs at a level no greater than 15% of general fund revenues, including installment purchase debt. This is a recommended "best practice"from the Government Finance Officers Association. It is a recommended practice to provide regular updates to the BOCC regarding the County's Financial Policies as a means to communicate the County's financial status. FINANCIAL IMPACT: There is no financial impact from this work session presentation. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal Impact associated with discussion of this item. RECOMMENDATION(S): The Manager recommends that the Board accept this work session presentation.