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3 <br />Based on preliminary estimates, the County's General Fund available fund balance at the end of <br />FY 2007-08 is projected to be approximately 14.4% of expenditures or $24.7 million. If this plan <br />is implemented, based on conservative projections, the projected available fund balance at the <br />end of FY 2008-09 could be approximately 12% of expenditures or $21.85 million. The <br />appropriation of $2.391 in FY 2009-10 would decrease the fund balance to 11.1 % or $21.64 <br />million. While this percentage amount is higher than the Local Government Commission <br />recommendation of a minimum 8 percent of expenditures, it is well below the County's informal <br />target of 15 percent of expenditures. <br />Staff will bring budget amendments to the Board to implement the recommended action if <br />approved by the Board. Additionally, budget amendments will be brought to the Board in those <br />cases where project expenditures have exceed the project budgets and where appropriation of <br />other identified sources, such as the transfer of the remaining School Capital Reserve Funds, is <br />necessary. <br />As best practice, local governments should only appropriate fund balance for non-recurring <br />purposes such as capital. While it is preferable to be able to achieve the fund balance goal in <br />order to meet needs in time of fiscal stress the use of the fund balance to meet non-recurring <br />priorities is understandable. It would be prudent to not let the fund balance fall below 11 % in <br />order to provide for cash flow as well as maintaining the County's excellent bond rating. Once <br />funding the shortfall is completed it will be necessary to take steps to rebuild the fund balance of <br />the General Fund. <br />As a point of reference, North Carolina counties with populations of 100,000 and above had an <br />average available fund balance of more than 19 percent at the end of FY 2006-07. Another <br />benchmark to consider is that the average fund balance for all North Carolina counties at the <br />end of FY 2006-07 was in excess of 21 percent. <br />FINANCIAL IMPACT: The financial impact of the recommended action is the projected <br />reduction of the fund balance of the General Fund to as low as 11.1 % of projected FY 2009-10 <br />expenditures. <br />RECOMMENDATION(S): The County Manager recommends the Board discuss and provide <br />direction to staff for the November 6th BOCC regular meeting. <br />