Audit shows improved fund balance; committee begins work on formal fund-balance policy and targets

ASHLAND, Wis. — Financial consultants told the Ashland County Finance and Economic Development Committee that the county’s 2024 audit shows improved reserves and an unassigned fund balance in a range the consultants described as healthy, prompting the committee to begin drafting a formal fund-balance policy. Steve, one of the financial consultants, said the county’s unassigned fund balance is about 19.2% of general fund expenditures and that the Government Finance Officers Association commonly recommends a target in the mid-teens; he described the county as “right in the sweet spot.” The consultants noted the county’s total fund balance and pointed to components that had shifted from “nonspendable” or receivables into unassigned as delinquent Sanborn property taxes were resolved. Committee members discussed several draft policy templates from peer counties that set either a specific minimum or a range for unassigned fund balance. Options discussed included a fixed minimum (for example, 25% of general fund operating expenditures), a range approach (15–30% or 20–30%) and a target-plus-tolerance approach (25% ±5%). Several members favored a range with a 25% target, but the committee did not adopt a final policy; staff will prepare revised language and bring it back for further discussion and a likely September county-board review. Consultants also identified other budget items relevant to the fund-balance conversation: capital project borrowing that is short-term (notes issued in November–December and paid in February), about $1.1 million of LATCF (federally sourced local assistance) funds, and a capital projects balance that reflects recent short-term borrowing. The consultants noted the county has legal capacity for much more long-term general-obligation debt — more than $92 million according to audit notes — but advised that borrowing decisions should consider rating impacts and the county’s overall fiscal strategy. Committee members asked staff and the consultants to provide revised policy text that (1) defines whether the metric is measured against operating expenditures or operating revenues, (2) clarifies a plan to reach any target if the county is below it, and (3) includes clear delegation (for example, thresholds for when finance committee approval is sufficient versus when county-board approval is required). The committee did not take a formal vote on a final fund-balance policy at the meeting.