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Chilton County commissioners consider formal reserve fund policy to cover emergencies
Summary
Commissioners discussed adopting a formal fund-balance policy that would set a general fund reserve at 25% of annual expenditures and 15% for other funds, and place reserves in FDIC- or SAFE-protected accounts.
Commissioners in Chilton County discussed a proposal to adopt a formal fund-balance policy to establish operating reserves for unexpected expenses.
Under the proposal read during the meeting, the county would hold 25% of the general fund's annual expenditure budget in reserve and 15% for other departmental funds. The proposal also says those reserve funds would be placed in investment accounts protected by the Federal Deposit Insurance Corporation and the State's SAFE (Security for Alabama Funds Enhancement) program.
The request originated from a commission member who said the county lacks a formal emergency balance and cited other counties' policies as models. "In the event something catastrophic happened, then the county would be basically out of business for a short period of time if we don't have something in a catastrophic fund," the commissioner said during remarks introducing the proposal.
County staff told commissioners the fund would likely take time to build and that the policy language includes safeguards about where the funds would be held and how they would appear in the county's financial statements. Commissioners asked no immediate follow-up questions and indicated they would consider the policy at a future meeting.
If adopted, the policy would add a formal reserve target to the county's budgeting practices and would be recorded in the county's financial statements. The proposal did not specify an implementation timetable or the initial dollar amount the county would transfer into the reserves.
Commissioners did not take a formal vote on the policy during the session; action was limited to introducing the proposal and asking staff to prepare it for future consideration.
