Reserve Fund Not A Factor To Ease Shortfall

BERLIN – Millions of dollars from Worcester County taxpayers sit, essentially untouchable, in the Worcester County reserve fund, a stash that some citizens say should be used to plug holes in the current and next county budget.

Tapping the reserve fund is not an option, said President of the County Commissioners Louise Gulyas.

The reserve monies are not a rainy day fund, said Commissioner Virgil Shockley.

The reserve fund, which stands at $18.9 million this year, or 10 percent of the county budget, is meant for emergencies like natural disasters.

The commissioners would go to the reserve fund to handle hurricane damage or the effects of a major fire or flood.

The reserve fund was designed to provide several million quickly accessible dollars in the event of such an emergency.

“It really is not an emergency yet. We don’t know what next year will bring,” Gulyas said. 

By county law, expended reserve monies must be paid back into the reserve fund within two years.

“Is it really an emergency? Is a budget really an emergency? No it is not,” said Shockley. “The county’s going to balance their budget.”

The county did have a rainy day fund at one point, established in 2002.

That money was folded into the reserve fund several years ago, after elected officials were advised by their bond counsel that Worcester’s bond rating would be better if the reserve fund stood at 10 percent, increased from 7 percent.

“Back then, nobody dreamed we’d be in this situation,’” Shockley said. “If you’re a farmer, you know how quickly things can go to hell.”

The county can use a predicted reduction in the reserve fund to pay off part of the expected current year budget shortfall.

If the fiscal year 2010 budget drops by a predicted $11.2 million, the reserve fund can be reduced accordingly, providing about $1.1 million to cover a fiscal year 2009 gap.

Those funds would not be enough to cover the shortfall as predicted, however.

There is no easy fix for the county’s budget woes, Shockley said.

Fiscal year 2011 could be worse than the current budget year the county is planning for, Gulyas warned.

“God knows what it will be next year. We’ll have to cut more, to the bare bones,” she said.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

HTML tags are not allowed.