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Davenport presents recommended financial-policy guidelines; Board schedules follow-up work session
Summary
Davenport & Company recommended minimum fund-balance and debt metrics — a minimum 30% unassigned fund balance plus a 5% budget stabilization fund (35% total) and debt ratios including a 3.5% debt-to-assessed-value target — and the Board agreed to additional review in a budget work session.
Davenport & Company Vice President Ben Wilson presented a draft set of county financial policies on Dec. 10, urging the Board to adopt guidelines covering fund balance, revenue recognition, capital programming and debt limits ahead of planned borrowing for the DSS building and other projects.
Wilson said Nelson County’s unaudited 2024 unassigned fund balance was about $30 million on approximately $48 million in revenues (about 62.6%) and that the FY25 budget includes use of fund balance that would reduce that figure to about 57.7% by his calculation. Davenport’s proposals include maintaining a bare minimum of 30% unassigned fund balance and adding a 5% budget stabilization target, which together would target 35% of general fund revenues. The firm also recommended a debt-as-percent-of-assessed-value target of 3.5% and a debt-service guideline in the 10–12% range of operating expenditures.
"These policies are industry best practice and help position the County to borrow when needed," Wilson said, adding that the Board could tailor levels to be more conservative if desired.
Board members asked for peer examples and discussion of how frequent policy review would be structured; staff and Davenport suggested an annual review tied to the budget process. The Board agreed to hold another work session to consider the CIP and policy adoption as part of the FY26 budget cycle.
