Minutes-05-23-2023-Budget Work Session

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18 Chair Bedford asked what the percentage was calculated from. Travis Myren said general fund expenditures. Chair Bedford asked if what they have been doing is waiting to get the audit back and then they see the actuals to budget, if the county gives 47% to the school and then they get to decide what to do with the rest. Travis Myren said when there is a surplus that goes to fund balance. He said they have been taking any fund balance above 16% and then deciding how to allocate that. He said that the proposal is now that they allow up to 20% but no less than 16%to be allocated to the fund balance. Bonnie Hammersley said they have always had over 16%. Chair Bedford asked if that means we need to be doing better budgeting, or the other side is to save it for a rainy day. She said she has no problem with the range but asked what the bond agencies want. Travis Myren said 15% would be the lowest actual and that Mecklenburg has an 8% goal but ended the year with 22%. Chair Bedford asked if the goal was to have a couple of month's operating expenses. Bonnie Hammersley said they aim for two months of operating expenses, but the measure is management of finances. She said that in her nine years they have never ended with a deficit in her tenure. She said they have always had a surplus and always come forward with an abstract with a recommendation for use. She said this would mean that if it is between 16% and 20%, it stays in the unassigned fund balance. She said that the state requires 8%. She said for a AAA Bond rating, there are many elements that are reviewed and evaluated. She said they look at strong financial management of the county. She said they are projecting a 4% increase in sales tax, but that is a volatile revenue. She said that the rating agency would see counting on that as not fiscally strong. She said that rather than making a decision every year, it dedicates money to OPEB when the ceiling of unassigned fund balance is surpassed. She said it is a plan. She said they never go over the 16% and said that it is a written policy rather than a practice. Vice-Chair McKee said there have been attempts to reduce the fund balance requirement below 16% before and they were unsuccessful. Chair Bedford said OPEB has gone down over the past couple of years and that when interest rates go up,their obligation to OPEB goes down. She said that she likes the idea of having a plan but maybe it should be that they were going to put$100,000 every year regardless of where they are on fund balance. She said that for the first year, she would still like it to come to the Board to see how much they are over and how it is used. She said she is fine with providing flexibility with the range. Commissioner Fowler said one benefit of keeping a range is serving the need for OPEB, but it provides flexibility for other things as well. Chair Bedford asked what 16% is of the current budget. Bonnie Hammersley said $46 million. She said this is in the recommended budget, so it would need to be an amendment to change it. She said that a decision is not required this evening but without an amendment, the way it is recommended will become policy. Commissioner Richards said there is so much need, so she would rather keep it at 16%, with a plan for any excess amount for the OPEB obligation but she is concerned to up the amount when there is so much need. She said the OPEB liability is disturbing. Vice-Chair McKee said it has been high for so long it has fallen into the background. Chair Bedford said they allocated $500,000 this year for that. Commissioner Hamilton said if there were a policy change, she would like to see the document as written and to take time to go over OPEB and then talk about different ways to address it. She said that with policy change she wants to see the whole policy. Kirk Vaughn said the current policy is written out on page 299 of the recommended budget. Commissioner Portie-Ascott asked when they will discuss this.