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Spotsylvania finance director reports $19.8 million net increase to general fund; investment returns drove large share
Summary
The county closed FY 2024 with a $19.8 million net increase to the general fund balance, driven largely by investment returns and a real‑estate tax increase; staff forecast a similar midyear surplus for FY 2025 and flagged monitoring of the federal funds rate.
Spotsylvania County finance staff reported that fiscal year 2024 closed with a net increase to the general fund balance of $19.8 million, driven mainly by strong investment returns and a real‑estate tax rate change approved in April 2024.
Becky, the county finance presenter, told the board the FY 2024 amended revenue budget totaled about $358 million and actual revenues were roughly $372 million, producing a surplus on the revenue side. Expenditures were below amended budget ($354 million actual versus $378 million amended), producing net positive results after reserves and encumbrances. Becky said investment returns accounted for about two‑thirds of the surplus and cautioned that strong returns are tied to the federal funds rate and may not persist.
Staff allocated the $19.8 million increase across categories: roughly $2 million in restricted funds (including about $1.1 million for school textbook funds), $4.4 million to the county’s fiscal‑stability reserve, $3.4 million to the OPEB reserve and amounts for health insurance and school carryover adjustments. Becky reported the fiscal‑stability reserve stood at about $66.6 million as of June 30, 2024.
On the FY 2025 midyear forecast, staff expects an overall surplus similar to FY 2024 — about $14.5 million projected at midyear — with investment returns again a significant driver (projected at $9.2 million). Becky briefed the board on inflation indicators and the Federal Reserve’s recent rate cuts and cautioned that interest‑rate changes affect investment returns, borrowing costs and the county’s revenue base.
Supervisors asked for clarifications about specific program balances. Becky said the Children's Services Act/CSA program produced savings in FY 2024 and staff plans to adjust FY 2026 recommended budgeting for that program to reflect multi‑year trends. She also explained that the finance office budgets conservatively for recurring revenues to avoid over‑projecting future receipts.
Why it matters: the fund balance allocation affects school carryover, capital project funding and the county’s credit posture. Staff signaled the county will continue conservative budgeting and monitor federal funds rate and local tax trends as work on the FY 2026 budget begins.
