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Board hears accounting risk in solar fund; staff suggest $1.1M–$1.5M professional‑services exposure
Summary
Staff warned supervisors that alternative fee agreements for large solar projects can trigger refunds of unused developer‑paid fees, reducing solar fund revenue and creating prior‑period accounting adjustments; Community Development estimates $1.1M–$1.5M of professional‑service needs tied to upcoming projects.
Community Development and finance staff walked the Board through the county’s solar fund cash position and a technical accounting risk tied to alternative fee agreements used on large projects.
Finance staff explained that several developer pre‑payments for professional services under alternative fee agreements (AFAs) must be reconciled at project close and unused balances refunded, which reduces recognized solar revenue. "Those all fee agreements... had to be paid back if it had not been used," a finance analyst said, recounting the recent audit review and the need for prior‑period adjustments. Community Development estimated $1.1M in professional services tied to multiple incoming projects and the budget team built a conservative $1.5M contingency for solar‑related professional services in FY27.
Why it matters: the solar fund was shown with an estimated beginning balance around $4.2M and projected revenues of roughly $4.0M this year. Staff flagged that several large projects are nearing payouts that will reduce net fund revenue when reconciled, and that the county’s current procedures did not fully reserve for the refund liability in its financial statements. Staff said that could lead to audit findings depending on materiality.
Board reaction and next steps: supervisors pressed for clearer accounting treatment and asked for revised cash‑flow scenarios showing the effect of potential refunds. Finance said it would rework the solar fund projections to reflect likely paybacks and recommended additional accounting support to manage invoicing and reconciliations. Staff also discussed moving away from AFAs or adjusting fee formulas to avoid large, difficult‑to‑predict liabilities in the future.
Takeaway: supervisors were alerted to a multihundred‑thousand‑dollar, possibly seven‑figure, accounting exposure in the solar fund and directed staff to return with revised projections and recommendations to reduce audit risk.
