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Buncombe County reports shortfall in FY25 revenues, fund balance below policy threshold
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Summary
Finance director presented unaudited FY25 fourth-quarter numbers showing general fund actuals of $466.2 million against an amended budget of $483.8 million, an available fund balance of $68.1 million (14.6%) below the county policy target of 15%, and ongoing discussions about protecting the county's AAA bond rating.
Buncombe County officials on Nov. 4 presented an unaudited fourth-quarter financial update for fiscal year 2025 that shows revenue shortfalls tied in part to recovery from Tropical Storm Helene and growing reliance on intergovernmental grants.
Melissa Moore, the county’s finance director, told the Board of Commissioners the amended general fund budget for FY25 was $483.8 million while year-to-date actual revenue totaled $466.2 million. The presentation attributed a roughly $3.1 million drop in ad valorem tax revenue and about a $1.2 million shortfall in sales tax to storm-related impacts.
Moore said intergovernmental revenue increased to reflect disaster-related grant funds, including disaster SNAP administration and Medicaid-related payments that offset some general-fund costs.
Expenditures ended the fiscal year at $464.5 million, reflecting a $17.6 million cost-reduction initiative and additional realized savings that Moore said totaled about $19.3 million. Total fund balance stood at $117.5 million, with an available fund balance of $68.1 million, or 14.6% of expenditures — just under the county policy minimum of 15% and below the benchmark associated with AAA credit rating criteria.
Moore explained that $9.8 million of restricted fund balance is set aside by state statute to stabilize Helene-related grant funding. Commissioners asked whether state no-interest loans and the fund balance treatment would protect the county’s bond rating; Moore said she would present calculations to rating agencies and defend the county’s position.
The county’s debt overview showed $366.2 million in principal outstanding, 58% of which is attributable to school debt. Moore reported a favorable debt payout ratio of 82.2%, exceeding the county policy target of 65%.
Moore also reviewed the county’s investment portfolio and noted that local government investment pools yielded more than 4% year-to-date, though interest earnings will likely decline as federal rates fall.
The board did not take new budget action during the meeting; commissioners discussed preserving fund balance and the implications of a negative outlook from the rating agencies.
