SNOW HILL – Worcester County will boost its reserves following an increase in fund balance.
The Worcester County Commissioners last week voted unanimously to move forward with adjusting the county’s reserve fund from 12% of budgeted general fund expenditures to 15%. The jump was made possible with a $9.6 million increase in fund balance in FY 2023.
Budget Officer Kim Reynolds told the commissioners last Tuesday that the annual audit was underway and in order to finalize the financial statements, the use and assignment of fund balance had to be determined. The county ended FY 2023 with a fund balance of $47.5 million, an increase of $9.6 million.
She said that while assigned fund balance amounts were meant to show the commissioners’ intent, the funds weren’t technically restricted.
“Although we assign funds to a particular project, these are not restricted unless done so by resolution,” she said.
Reynolds said the county was fortunate to see a $9.6 million increase in fund balance in FY 2023. Of that $9.6 million, $1.2 million was previously designated for reserve while $326,445 was set aside for prepaid expenses.
“It is important to point out that the surplus is primarily attributable to a strong labor market and the related income tax revenues as well as a better than expected return on investments,” Reynolds wrote in her report to the commissioners. “Staff would like to consider an opportunity to increase reserve this fiscal year to invest in the future and our long-term financial stability.”
Staff recommended increasing the reserve fund from 12% of budgeted general fund expenditures to 15%. The fund was last increased in 2021, when it went from 10% to 12%.
“This would require a one-time investment of $7 million,” Reynolds said of the increase to 15%.
The commissioners voted unanimously to approve the list of projects Reynolds presented, totaling $47.5 million, and to move forward with increasing the reserve fund to 15%.
