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County auditors report improved unassigned fund balance; committee debates 20'5% target and range for policy
Summary
Financial consultants presented the 2024 audit showing higher unassigned fund balance and recommended a fund balance policy range. Committee members debated a 20—0% range with 25% as a target and asked staff to return a revised policy to the committee.
The Finance and Economic Development Committee reviewed the county's 2024 audit and discussed a draft fund-balance policy after financial consultants said Ashland County's unassigned fund balance had improved.
"I think you're in the right track," Steve, a financial consultant, told the committee after showing audit figures. The audit presented a $6 million total fund balance and identified an unassigned portion that consultants calculated at roughly 19.2% of general fund expenditures, a level the consultants described as above typical minimum guidance but below some proposed targets.
Committee members discussed model policies from other counties. Dunn County's example uses a higher band (35 to 50 percent), while Waupaca County's 25 percent figure proved more readable to supervisors. Committee debate focused on whether Ashland County should adopt a range to allow flexibility; suggestions included a 20-to-30 percent range with 25 percent as the target and a +/- tolerance around the target so administrators have guardrails but not inflexible constraints. "If you set it at 20 right now and you're at 19.22, S and P or Moody's are gonna be like, well, okay. What's your plan to gain compliance?" a financial consultant said, arguing for a range and a stated plan.
Committee members also discussed how some funds the county holds (LATCF, certain capital funds and contingency) are in separate funds and may not count toward the general funds unassigned total even though they provide liquidity. Steve reported that LATCF funds currently have no spending deadline and are "retained until spent" though reporting is required; later he clarified LATCF does not have the same expiration timeline as ARPA.
Committee members agreed to continue refining the policy text for clarity (use of the term "general fund operating expenditures" rather than "operating revenues," clarify monitoring and signatures if finance director position is vacant) and to return a revised document to finance committee before county board consideration in September. Several members suggested specifying authority thresholds for using fund balance (dollar limits for finance committee v. county board). No final policy was adopted at the meeting; staff were asked to prepare revisions and bring the proposal back.
The discussion included questions about near-term capital needs (HVAC, HHS roof, jail project) and the trade-offs between holding reserves and using cash versus short-term borrowing. Financial consultants and staff agreed to provide more definitive guidance on permitted uses of LATCF funds and the effect of different policy ranges on tax levy planning.
