County reserves continue to grow
Jefferson County raised taxes by $7.2 million from 2005 to 2009, building up the county's bank accounts as well as its expenses.
In the last five years, the fund balance has grown by $11.6 million. About $17.9 million was added to the fund, but some was spent.
"You do have to put money aside for items you have to be concerned about," said Board of Legislators Chairman Kenneth D. Blankenbush, R-Black River. "You've got to worry about ice storms, emergencies, so we're setting aside money to the point where you're not asking for a huge increase in taxes."
He said the county knows it has retirements, software purchases and unfunded mandates from state and county government to pay for and should save accordingly.
But not all legislators said they believe the amount of savings is prudent.
"Good management is if we didn't raise the levy and we worked hard to get expenses in line to put money away," said Scott A. Gray, R-Watertown, Finance and Rules Committee chairman. "We're increasing the levy and banking it."
Every year, the legislators plan to spend some money from fund balance — for 2009, the number was $5.5 million. But instead of depleting some of the fund balance, the county ended up adding $3.7 million to the unspent money fund.
That was mainly because the county collected an unexpected $3 million credit for the Federal Medical Assistance Percentage, a reimbursement program for Medicaid.
"It's a good position to be in as opposed to many counties that spent that," County Administrator Robert F. Hagemann III said. "They have, by definition, a gap. Had we not been in the black with fund balance, we would be in a serious problem."
The 2010 budget included a tax levy of $47,662,838, which is $1.3 million or 2.76 percent higher than 2009's $46,384,040 levy.
"We raise the levy because we can, not because it's hard," Mr. Gray said. "We're rolling over in money."
Mr. Blankenbush countered that the county has cut the tax rate every year for the last six.
In preparing for each year's budget process, county legislators are given an analysis of the fund balance that includes the unreserved and undesignated fund balance.
It leaves out the reserve accounts, which had $4.2 million, according to the county audit, and the $19.3 million in management-designated money.
"This is money that's parked and moved around whenever necessary," Mr. Gray said. "$1 million for property remediation? I don't know what property we have to remediate."
The state comptroller's office said there is no rule for how large a municipality's reserves can be; they must be "reasonable" under the law.
And the office said management-designated funds are "typical designations that appear in financial statements."
It is prudent for the county to have the money to have a good credit rating for outside bonding agencies, Treasurer Nancy D. Brown said.
"People can see the county recognizes the commitments and we're being responsible," she said.
The largest designation is a result of a change in accounting standards for governments planning for retirees' health insurance costs. Instead of a pay-as-you-go situation, the governments are supposed to set aside what they would need to pay all of the health care costs for its retirees, Mrs. Brown said.
That money cannot be put in a reserve account by state law.
For workers' compensation, risk retention and contractual liabilities, the county set aside money "based on experience of what is our likely exposure," Mr. Hagemann said.
He said the state revenue contingency was made in case the state award for a building project at the airport didn't come through.
"We had a vision with very specific grants we were looking to," he said.
Now state funding issues are much broader concerns.
The software purchase fund saves money for the possibility of new accounting software.
"There are other major improvements to our information technology," Mr. Hagemann said. "There are more things on the punch list than money."
The county has designated $2.1 million to pay for compensated absences, which are the vacation days owed people when they leave the job, for example, through retirement.
Some fund balance money is set aside in the designations at the end of the year.
"We're giving a decision on the dollar amount and the treasurer assigns the fund," Mr. Hagemann said.
To spend the money, it must be approved by the Legislature and plugged into a specific account number. For reserve accounts, the board has to set the money aside in a special account.
Mr. Blankenbush cited the county's external auditor, who said Tuesday night that the county had a comfortable margin.
"What is too much is a discussion we have at budget time," he said. "Then there's the decision exactly where you're going to give tax breaks to."
Mr. Gray said the county is keeping too much money back.
"I'm not a proponent of using fund balance for the day-to-day operations because that's a downward spiral," Mr. Gray said. "But I'm not in favor of taxing people just to bank it."
A BIG SAVINGS ACCOUNT
Jefferson County management-designated fund balance items:
■ Post-employment health insurance: $7.92 million
/ Workers' compensation: $3.25 million
/ Compensated absences: $2.10 million
/ Risk retention — loss contingencies: $2 million
/ Future software acquisition: $1.50 million
/ State revenue contingency: $1 million
/ Potential property remediation: $1 million
/ Provision for contractual liabilities: $500,000
