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Committee reviews proposed working capital and fund balance policy; staff recommend plain-language 20–30% min–max
Summary
Marathon County staff presented a simplified working capital/fund balance policy that would set a recommended minimum of 20% and maximum of 30% of audited annual expenditures in reserve, allow transfers above the maximum to capital improvement funds, and keep the highway fund separate.
County administration and the finance director presented a rewrite of Marathon County’s working capital and fund balance policy during the Human Resources, Finance and Property Committee meeting, proposing a simplified, percentage-based approach and an implementation process.
The draft replaces the earlier calculation method (referenced in resolutions from 1989 and 1996) with a min–max based on audited expenditures. Under the proposed framework staff recommended a minimum target of 20% and a maximum of 30% of audited annual operating expenditures; any fund balance in excess of 30% would be transferred to the county’s capital improvement program (CIP) during the first budget year following audit completion. The highway fund would be accounted for separately from general fund working capital.
Finance Director Sam explained staff examined peer counties (72 counties where data were available), GFOA guidance and GASB practices. The packet included a county-by-county table showing wide variation: some counties have minimums as high as 35% and maximums up to 50%, while others are lower. Sam said auditors and the county’s financial advisors reviewed the draft and did not raise substantive objections. Administrator Leonard and staff emphasized a plain-language approach so both auditors and the public can interpret the policy consistently.
Supervisors asked several operational questions: how money between 20% and 30% would be treated (staff clarified that only amounts exceeding 30% would automatically roll to CIP after audit), whether the 20% minimum is adequate for emergencies, and whether the county should consider a 25% floor in light of federal funding uncertainty. Staff described the policy as a guiding framework for administration and noted the board retains discretion in the budget process to reassign funds.
Committee members also discussed the option of departmental contingency funds—a narrow policy that would allow specific departments to accrue capped internal contingencies (Chippewa County was cited as an example). Staff offered to return with an analysis if the committee wanted further exploration. The committee asked staff to return with alternative minimums (including a 25% floor option) and clearer illustrations showing how the fund balance, restrictions, and working capital buckets would appear in audited financial statements.
No formal action was taken; staff sought direction and will revise the draft policy for further consideration.
