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County staff recommends $2.5M tax-stabilization contingency to keep fund-balance above policy target
Summary
Staff recommended using $2.5 million from a tax-stabilization fund to avoid falling below the county's 17% fund-balance target; staff said the fund would only be drawn if year-end results require it and replenishment would depend on future revenues.
Budget presenter (county staff) recommended lawmakers include a $2.5 million tax-stabilization contingency in the 2026 budget to remain compliant with the county's fund-balance policy. Staff said early projections indicate the county could fall below the 17% target by the end of 2026 and that the tax-stabilization fund was established to address such shortfalls.
"The tax stabilization fund was recently established a couple years ago in response to the fund balance policy," staff said, and identified the legal authority as a section of state general municipal law. Staff explained that appropriations from the stabilization fund would not actually be recorded until the year-end books close with a deficit large enough to require the draw; the recommendation is precautionary to avoid returning quickly for an emergency remedial action.
Lawmakers asked whether the $2.5 million would be replenished and staff said that would depend on future revenue sources and that the county is not currently in a financial position to promise replenishment. Staff said the fund balance currently stood at about $5.5 million and that the recommendation aims to prevent a drop below policy minimums.
