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Commissioners consider $5.1 million open reserve, weigh financing vs. fund-balance for $8.2M capital list
Summary
Finance staff recommended a $5.1 million budget reserve for ‘open items’ tied to uncertain state actions and presented a $8.2 million list of nonrecurring vehicle and equipment purchases that could be financed ($1.9M annual) or paid from fund balance.
St. Mary's County finance staff asked the Board of County Commissioners on March 4 to budget a $5.1 million reserve for “open items” while state and federal budget changes remain uncertain.
The reserve would cover items awaiting state action, including a possible increase in county funding of assessments and the Board of Education pension pick-up. Vanetta Van Cleef, the county chief financial officer, told commissioners the reserve “is included in the analysis” and would let the county “pivot quickly” if state decisions free up money (presentation of state timeline and open items).
Why it matters: County staff said the reserve is intended to avoid retracting commitments later if state funding materializes. The request appears intended to make the recommended budget (due April 1) flexible ahead of the county’s required June 1 adoption deadline.
On capital, finance presented $8.2 million in nonrecurring vehicle and equipment requests. Staff said financing those purchases would add about $1.9 million annually to operating costs; alternatively, the county could buy some or all of the items from fund balance to reduce recurring operating pressure. “One of the levers that we can pull . . . is the capital purchasing out of fund balance versus financing,” Van Cleef said. She added staff used a 4.2% interest-rate assumption for illustrative financing.
Commissioners discussed which capital items to prioritize. Van Cleef highlighted that emergency services equipment is a major component of the list, including a $5.1 million total related to the radio system upgrade (the “core radio system upgrade” was cited as about $2.7 million of that total). Commissioners asked staff to review individual items and to return with options rather than adopt a single package immediately.
Commissioners also heard a revenue update: staff added $345,000 to highway-user receipts and removed a prior PAYGo assumption tied to a 1.25% rate. Staff reiterated estimates of a $1.7 million negative revenue impact from state tax-structure changes, extrapolated from tax-year-2023 data.
Ending: Finance said it will return with more department-level budget reviews and that staff would keep the open reserve proposal in the recommended budget so the board could adjust after the state’s budget timeline clarifies. “If we go to May 7 and good news comes through . . . then it’s easier to pivot,” Van Cleef said.
