Marathon County committee weighs clearer working-capital rule, debates 20%–30% threshold and 25% floor option

At its April meeting, the Marathon County Resources, Finance and Property Committee discussed a proposed rewrite of the county's working-capital and fund-balance policy intended to simplify a calculation established in prior resolutions and align reserves with best practices.

Finance Director Sam (Sam) presented staff's analysis, saying the current rule, created by earlier resolutions, used a complicated formula and that staff proposes a straightforward percentage target tied to the audited year's actual expenditures. "So in this case, if we had a million dollars of expenditures, our goal would be to have a minimum of $200,000 and a maximum of $300,000," Sam told the committee, describing the 20% minimum and 30% maximum framework staff used in examples. Sam said she had discussed the rewrite with the county's auditors and financial advisors and that auditors "said that everything looked fine in there as the way it was written."

Administrator Leonard said the rewrite emphasizes plain language so that the public and auditors can reach the same interpretation. "One of the real driving forces behind the rewording of this policy was to adopt ... a plain language approach," Leonard said, adding that the updated method will still produce figures similar to historical calculations while making them easier to follow.

Committee members pressed staff on several practical points: whether the highway fund would be treated separately (staff said it would), how excess funds above the maximum would be handled (implementation text directs funds in excess of the maximum to capital improvement funds after the audit), and whether board members could still choose to use reserves during the annual budget process (staff said yes). Supervisor Poole noted the operational difference between a 20% minimum and a 25% minimum, saying, "20% is a little over two months, and 25% would be three months," and expressed greater comfort with a higher floor given federal funding uncertainty.

Staff also described an optional approach some counties use: department-level or program-specific contingency accounts that let individual departments carry forward unspent operating dollars toward an identified capital need (the packet included an example from Chippewa County). Leonard and Sam said they could return with a narrower proposal if the committee wanted to pilot departmental contingency funds rather than apply a countywide change immediately.

The committee did not adopt a final policy. Members asked staff to return with refined language and options: keep the 20% minimum/30% maximum as a baseline, and also provide a version that sets a 25% minimum; include clearer implementation text on how highway and other levy-supported funds will be recorded; and provide examples and an implementation approach for selective departmental contingency funds.

Next steps: staff will revise the draft policy to show the alternate 25% minimum and more explicit implementation language (including how the highway fund will be recorded) and will add examples and a proposed process for any departmental contingency pilot. The item will return to the committee for further direction.