HomeMy WebLinkAbout2021-034 - Res. Amending Res. 72-19 Establishing Financial Reserve and Contingency Policy RESOLUTION NO. ZI-01A
AMENDING RESOLUTION 72-19
IN THE MATTER OF ESTABLISHING A FINANCIAL RESERVE AND CONTINGENCY POLICY FOR
MASON COUNTY,WASHINGTON
WHEREAS, the Mason County Board of County Commissioners, as the county
legislative authority and the Mason County Finance Committee deem it to be fiscally
responsible to maintain cash flow reserves in the County Funds and to provide sufficient
reserve funds as required by law to cover bond covenants, the smooth running of the County
and pay current obligations;
NOW THEREFORE BE IT RESOLVED by the Mason County Board of County
Commissioners that the Financial Reserve and Contingency Policy be adopted as part of the
County Budget process to achieve the goals outlined. These goals were established by the
Mason County Board of County Commissioners beginning in 2018 over a five year period
for all reserves except the Contingency Reserve which was established beginning in 2019
over the successive next five years.
A. General Policy
The County shall maintain reserves required by law, ordinance and/or bond covenants. All
expenditures drawn from reserve accounts shall require prior Board approval unless
previously authorized by the Board for expenditure within the County's annual budget.
The County Finance Committee will review annually the required reserve levels necessary
to meet the reserves established herein. If it is determined that the reserves should be
adjusted, the County Finance Committee shall propose an amendment to these policies.
If reserves and/or fund balances fall below required levels as set by this policy, the County
shall include within its annual budget a plan to restore reserves and/or fund balance to the
required levels.
The County's annual general fund budget will be adopted in the positive with expenditures
not exceeding revenues, excluding beginning and ending fund balances unless any of the
following conditions exist: the Mason County Board of County Commissioners develop a
plan to restore the shortfall to the reserve balances within one calendar year; the offset of
expenditures over revenue is due to "one-time" expenditures, or; the offset is due to
conservative budgeting and the net revenue over expenditures for the previous calendar year
is at least equal to the amount of the excess in expenditures over revenues in the current
budget year.
The County will allocate any funds from unanticipated excess revenues and/or unexpended
budget authority in the year following the actual recognition of these funds first to funding
reserves as set out in this policy then to other unanticipated expenditures.
All reserves will be presented in the County's annual budget.
1
B. General Fund Operating Reserves
The County will maintain a General Fund Operating Reserve to provide for adequate cash
flow, budget contingencies, and insurance reserves. Under this policy, General Operating
Reserves will be budgeted in the range of 15% - 25% of the prior year's actual expenditures,
excluding beginning and ending fund balances.
C. General Fund Contingency Reserve
The County will maintain a Contingency Fund and shall maintain a reserve equal to
$1,000,000 to provide a financial cushion to cover revenue shortfalls resulting from
unexpected economic changes or recessionary periods or to provide funds in the event of
major unplanned expenditures the County could face.
D. General Fund Technology Replacement Reserves
The County will maintain a Technology Replacement Reserve for replacement of costs
entity wide to cover computer hardware, software, or telephone equipment identified in the
County's Technology Replacement listing. The required level of reserve will equal each
year's scheduled costs. For example, if the 2019 equipment costs are budgeted at $100,000
the fund reserve balance must equal or exceed $100,000. Contributions will be made
through assessments to the using funds and departments and maintained on a per asset basis.
E. General Fund Equipment and Vehicle Replacement Reserves
The County will maintain a General Fund reserve for the replacement of vehicles and
equipment identified on the County's equipment replacement listing. The required level of
reserves will equal each year's scheduled replacement costs. For example, if the 2019
equipment replacement costs are budgeted at $100,000, the fund reserve balance must equal
or exceed $100,000. Contributions will be made through assessments to the using funds and
departments and maintained on a per asset basis.
F. General Fund Accrued Leave Reserve
The County will maintain an Accrued Leave Reserve to cover the cost of the liability in its
Accrued Leave Account. The reserve will be at least sufficient to cover one years estimated
accrued leave payout as well as any accrued leave payouts known and required to be paid
out in future years.
G. Sales and Use Tax Fund Reserve
The County will maintain a Sales and Use Tax Fund Reserve equal to 15% to 25% of the
prior year's actual expenditures, excluding beginning and ending fund balances.
H. County Road Fund Operating Reserves
The County will maintain a County Road Fund Operating Reserve to provide for adequate
cash flow. Under this policy, General Operating Reserves will be budgeted in the range of
15% - 25% of the prior year's actual expenditures, excluding beginning and ending fund
balances.
2
I. County Road New Road Projects Fund Reserve
The County will maintain a County Road New Road Projects Fund Reserve equal to
$4,000,000, or other amount set by the Board and adopted during the annual budget process.
J. REET 2 Fund Reserve
The County will maintain a REET 2 Fund Reserve to provide for future debt payments
within the Belfair Wastewater& Water Reclamation Fund. The reserve will increase each
year, economic conditions permitting, by up to one-half of the scheduled transfer amount
from the REET 2 Fund into the Belfair Sewer Fund until the reserve is equal to $3,000,000,
or other amount set by the Board and adopted during the annual budget process.
K. Equipment Rental & Revolving Fund Reserve
The County will maintain an Equipment Rental & Revolving Fund Balance Reserve equal
to 15% - 25% of the prior year's actual expenditures, excluding beginning and ending fund
balances.
Approved this V day of ,2021.
Mason County Board of Commissioners
Ran Neatherlin,Chair
Kevin Shutty, ommissioner
Sharon Trask, Commissioner
Approved thisU�day of 2021.
r
Mason County Finance Committee
isa F azier,M ounty Treasurer, Chair
Paddy McG ire, ason County Auditor, Secretary
Rand eatherlin,Mason County
Commissioner Attest:
m A
McKenzie Qfith
Clerk of the Board
Approved as to form:
Zim �te
Chief Deputy Prosecuting Attorney
3