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HomeMy WebLinkAbout2025-067 - Res. Amending Res. 2022-052 MC Code Chapter 2.161RESOLUTION NO. a0R6- Clor1 AMENDING RESOLUTION 2022-052, ATTACHMENT A TO ORDINANCE 2024-080, AND MASON COUNTY CODE CHAPTER 2.161 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. 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 shall be adopted in the positive, with expenditures not exceeding revenues, excluding beginning and ending fund balances, unless one or more of the following conditions exist: 1. The Board of Mason County Commissioners develop a plan to restore the shortfall to the reserve balances within one calendar year; 2. The offset of expenditures over revenue is due to "one-time" expenditures; 3. 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; 4. The County's available cash balance exceeds established reserve targets in the General Fund Operating Reserves. 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. 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 Fron hV s o Coup itA 0 [Rill Printed from Mason County OMS be budgeted in the range of 15% - 25% of the prior calendar year's actual expenditures, excluding beginning and ending fund balances. C. General Fund Contingency Reserve The County will maintain a Contingency Reserve equal to $1,000,000 to provide a financial cushion in the event of unexpected economic downturns, major unplanned expenditures, or other fiscal emergencies. D. 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 2026 equipment replacement costs are budgeted at $1,000,000, the fund reserve balance must equal or exceed $1,000,000. E. 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. F. General Fund Capital Facilities Reserve The County will maintain a Capital Facilities Reserve equal to $5,000,000, or other amount set by the Board and adopted during the annual budget process. The purpose of the reserve is to pay for capital costs or future debt payments included in the Capital Facilities Plan. G. General Fund Restricted Fund Balance Reserves The County will maintain a Reserve account in the annual budget to reflect the approximate cash balance amounts for those General Fund departments and programs that contain restricted funds which must be carried forward from year to year to accurately track cash balances. The departments currently included are: • No. 125 — Community Development • No. 126 — Historical Preservation • No. 205.290 — Sheriff Jail Commissary • No. 205.295 — Sheriff Donations H. 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 calendar year's actual expenditures, excluding beginning and ending fund balances. I. 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 calendar year's actual expenditures, excluding beginning and ending fund balances. J. 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. K. Lodging Tax Fund Reserve The County shall maintain a Reserve account, as recommended by the Lodging Tax Committee, to provide r nted From Cason County OPAS Printed from Mason County OMS for future tourism -related expenditures when funds are available to reserve. The Board of County Commissioners retains the authority to modify or eliminate the reserve amount at any time. The reserve amount may be adopted as part of the County's annual budget. L. 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. M. Information Technology Fund Reserve The County will maintain an Information Technology Fund Reserve equal to $100,000, or other amount set by the Board and adopted during the annual budget process. The purpose of the reserve is to pay for unexpected countywide information technology related expenditures. N. Equipment Rental & Revolving Fund Reserve The County will maintain an Equipment Rental & Revolving Fund Balance Reserve equal to 15% - 25% of the prior calendar year's actual expenditures, excluding beginning and ending fund balances. O. Utility Enterprise Fund Reserves The County will strive to establish and maintain a Utility Enterprise Fund Reserve equal to 15% - 25% of the prior calendar year's actual operating expenditures, excluding beginning and ending fund balances. When funds fall below this reserve, the county will prepare and implement a financial improvement plan. P. Utility Enterprise Fund Capital Reserves The County will strive to establish and maintain a Capital Reserve equal to the amount set by the board and adopted during the annual budget process. The purpose of the reserve is to pay for capital costs or future debt payments included in the capital facilities plan. Approved this aa_of ochw' , 2025 BOARD OF COUNTY COMMISSIONERS Sharon Ll as1,. Chair Pat Tarzwell, Commissio Rancyy Neatherlin, Commissioner FINANCE COMMITTEE CHAIR Printed From 'Mason County OMS Printed from Mason County OMS ATTEST: McKenzie Smith, Clerk of the Board APPROVED AS TO FORM: C: Accounting, Treasurer, Public Works, Budget & Finance Printed From Mason County OMS Printed from Mason County OMS