Finance committee reviews large increase in fund balance; staff outlines one‑time uses and risks

Charleston County's Finance Committee heard a presentation on the county's fund balance and fiscal outlook, during which finance staff said audited results and higher interest income drove a large year‑over‑year increase in reserves.

Finance staff summarized three accounting perspectives on the county's finances and said the county's net position rose by $181,000,000 while the one‑year fund balance view increased about $80,000,000. The presentation said the General Fund's ending balance moved from an original $95,000,000 to $134,000,000 after the fiscal year 2023 audit.

The increase is the product of prior‑year audit adjustments, revenues above budget (notably interest income), and expenses that came in under budget, the presenter said. The presenter told the committee the county plans to use $16,000,000 of fund balance in fiscal 2025 for facilities projects and capital equipment and has set aside $20,000,000 for similar purposes in fiscal 2026.

Why it matters: committee members pressed staff on how much of the increase is recurring revenue versus one‑time gains. Several members warned that interest income is volatile and should not be budgeted as a long‑term revenue source.

During questions, Council member Pryor said the county should consider directing recurring funds toward affordable housing if reserves remain stable. Finance staff replied that the budget already includes $4,000,000 from the local accommodations tax for housing in fiscal 2024, and similar amounts are projected for 2025 and 2026.

Committee members also asked about undesignated fund balance. Staff estimated the undesignated amount at less than $10,000,000 and "probably closer to 5" million dollars but said the exact figure would be provided later. Staff clarified that some funds (for example, the budget stabilization elements called the two months plus rainy day) are recorded within the General Fund rather than as separate special revenue funds.

On revenue risk, committee members asked how a hypothetical statewide cut to the watercraft tax would affect the county. Finance staff said the county would lose roughly $1,400,000 annually under the numbers discussed, which they said could require an approximate 0.33 mill property tax increase to offset. The presenter also told the committee rating agencies primarily evaluate the General Fund but increasingly consider whether other funds are self‑sustaining.

Committee members and staff emphasized that the recent gains include one‑time interest income and that personnel savings seen in prior years (due largely to unfilled positions) are shrinking. Several council members asked staff to return with more specific breakdowns of undesignated balances and fund‑by‑fund details.

The presentation closed with staff noting capital plans and planned borrowings for road projects and other near‑term needs, and a reminder that special revenue funds carry restrictions that limit how those dollars can be used.