Washington County presenters flag fund-balance shortfalls, urge policy review as health and pension costs rise

Washington County fiscal staff presented a month-end fiscal review and a one-sheet fund-balance scorecard that shows the county remains several million dollars below the fund-balance floor established in policy, and urged the board to begin budget planning now for 2027.

The presenter, identified in the meeting record as the county fiscal presenter, told the board the apparent $2 million cash increase in 2022 masked the fact that $15 million of that cash had been short-term borrowed (a TAN) to cover retirement and payroll expenses in January and February; the TAN was repaid in April, the presenter said, and the underlying unassigned unappropriated general fund balance rose to about $15.4 million at the end of 2025. The presenter cautioned that some 2023 deficits were planned uses of 2022 surplus for capital projects and therefore should not be read as unexpected operating losses.

The presenter walked the board through a new scorecard that compares each fund's actual end-of-year balance to the board's adopted fund-balance policy and assigned letter grades to aid oversight. "I gave A's and B's and C's and an actual score," the presenter said in explaining the tool, which staff described as intended for ongoing use during the 2027 budget process.

Staff highlighted several fund-level items: the carpool (fleet) fund grew from about $102,000 to $314,000 after rate adjustments, but presenters said internal rates may still undercount administrative overhead; the county road fund reached roughly $1.3 million but staff warned a previously approved $2.5 million project will require a $430,000 local share that is likely to be drawn from that fund. The presenter recommended the board consider funding that local share from the county road fund rather than general fund transfers where possible.

Health insurance and pensions were singled out as the biggest ongoing risks. The presenter said the county has experienced two recent large premium increases and a one-time $780,000 hit to the self-insured health plan, making mid-year plan changes infeasible. "We can't change anything for this year," the presenter said, and urged the board to focus on cost-containment measures and to monitor claims closely. Staff noted the county now receives drug-rebate revenue under its self-insurance arrangement and has implemented a two-card pharmacy approach intended to reduce net prescription costs.

On workers' compensation, staff described a new funding methodology that apportions fund costs to participating entities based on prior-year usage. The presenter said workers' comp showed a surplus for a second year but remains below the board's policy target and recommended periodic review of reserve thresholds rather than assuming the adopted percentages are fixed in perpetuity.

The presenter also recommended the sewer one and sewer two fund details be presented directly to the Board of Commissioners, saying those funds have issues that may be better handled at the commissioners' level.

The meeting closed with staff advising that the county is still approximately $7 million shy of the board's minimum fund-balance floor and urging earlier, iterative budget decisions in 2026 to avoid last-minute corrections in November when the 2027 budget is adopted. The board set follow-up discussions and identified August 31 as a date for continued conversations.