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Fund balance policy proposed to staunch county's bleeding coffers
PARIS -- Oxford County Commissioners need to consider adopting a savings policy to rebuild a diminished general fund account, according to County Treasurer Roy Gedat.
Gedat brought up the need to refill the county's depleted coffers during a presentation of the County's 2011-2012 audit by Bruce Nadeau, an accountant from Buxton-based RHR Smith and Company accounting firm.
According to the audit, the county had $393,073 in unanticipated expenses last year and used undesignated funds to cover the shortfall.
According to Nadeau, the shortfall was a combination of unanticipated costs, including work on the Oxford County Regional Airport, the installation of a new fuel system and fuel and overtime costs at the Oxford County Sheriff's Office and a drop in revenue that the county expected to receive.
On Wednesday, County Administrator Scott Cole said about two-thirds of the over-budget expenses could be attributed to costs at the airport.
Most of the items that made up the shortfall were one-time expenses, Nadeau said.
Paying for the unanticipated expenses has dropped the county's undesignated fund balance to less than half of what it was at the end of 2010.
The county's undesignated fund then had $1,143,363. By the end of 2011, it had dropped to $808,223, then to $415,150 by the end of 2012.
Ideally, the county should have an undesignated balance between $800,000 and $1.2 million, enough to cover all its expenses for a full three months, Nadeau told the Commissioners.
Maintaining a healthy fund balance ensured the vounty would have enough cash on hand to address emergencies, Nadeau said.
Paying to care for its own prisoners if the state's prison system fell through should be a particular concern, Nadeau told commissioners.
"There is a reasonable possibility that the whole (jail) partnership could implode," he warned Commissioners.
Gedat used the opportunity to again float a fund balance proposal to the commissioners.
According to a draft of the proposal, the county would maintain a minimum of 15 percent of each year's estimated operating expenses in in the unrestricted fund balance with a maximum of 20 percent of the year's total tax assessment in the unassigned fund balance.
Gedat told commissioners the county needed to implement some policy to keep the fund balance from dropping further than it has over the past two years and start refilling it. Continuing to draw down the fund was unsustainable, he warned.
On Wednesday, Cole said Gedat's proposal has been discussed by the commissioners once or twice already this year, although they have yet to take action on it.
"The elements of the proposal are fine," Cole said. "No one disagrees with that."
There were, however, only three ways the county can improve its fund balance, Cole said — taking in more money than expected, spending less money than it approved and maximizing its overlay, the amount above the minimum required to raise in property taxes.
"There are limitations," Cole said. "It can't be arbitrary; the stars have to line up right."