Audit and Finance Committee recommends 35% assigned fund-balance target for Goochland County

The Audit and Finance Committee of the Goochland County Board of Supervisors voted in workshop to recommend that the board adopt a 30'40 percent assigned fund-balance range with a 35 percent target, the committee agreed by voice vote and will send the recommendation to the full Board of Supervisors at its March meeting.

The recommendation followed a staff presentation and extended discussion of the county's available fund-balance policy, which ties assigned balances to a share of the next fiscal year's budget. Staff explained that under the current 60 percent metric, the county would need roughly $66.6 million in available fund balance; of that amount, assigned fund balance would need to be about $37.7 million, while FY24 assigned balance totaled $25 million, leaving a shortfall staff summarized as roughly $12.7 million. "To meet our policy, we need 13,000,000 more dollars," the county's finance representative said.

Committee members cited trade-offs between maintaining large reserves to preserve credit flexibility and using reserves for capital improvement program (CIP) projects already identified as priorities. One supervisor urged caution, noting the county had funded unbudgeted CIP work and a personal-property tax-rate reduction that together reduced reserves in FY24, while another emphasized the need to keep a tool that forces prioritization. Several members proposed different targets: 45 percent was described as more immediately attainable by one member, while others advocated a 30'40 percent band with a 35 percent target as a middle ground; the committee voted to recommend the 30'40% band with 35% as the target.

Staff also presented FY25 projections that would materially improve the county's position in the near term but cautioned the gains included significant one-time items. The finance presenter projected an $8 million return to surplus in FY25 driven primarily by an expected $4 million in building-permit fees tied to an Amazon-related development and about $3 million in higher-than-budgeted personal property revenue; staff noted much of that improvement is nonrecurring and traditionally routed to CIP rather than ongoing operational spending.

The committee agreed the recommendation should include a commitment language: if the board later chose to divert from the policy level, the county would accompany any violation with a plan to return to the stated target within a specified period. The committee chair confirmed staff will include the recommendation and supporting projections in the March board packet for consideration by the full Board of Supervisors.

The committee adjourned to the Board of Supervisors meeting; the next Audit and Finance Committee meeting was scheduled for May 6, 2025, time to be determined.