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Board authorizes staff to pursue formal fund‑balance policy after Davenport presentation
Summary
Davenport & Company recommended a 20% unassigned fund‑balance target and a Budget Stabilization Fund; the Board voted 5-0 to authorize staff to work with Davenport to establish a policy, with Davenport suggesting a phase‑in not to exceed three years.
Austin Sacks of Davenport & Company presented fund‑balance policy recommendations to the Northumberland County Board of Supervisors, urging the County to establish a formal policy that targets an unassigned general fund balance of roughly 20 percent of annual expenditures.
Sacks said the 20 percent threshold reflected years when the County avoided issuing short‑term revenue anticipation notes. "At the 20% level, the County was able to get from one tax season to another without needing to secure short‑term borrowing," he said. He added that other changes — such as moving to twice‑a‑year tax collection — could allow for a lower target, but recommended the Board aim to reach 20 percent within a three‑year maximum if not done in a single budget cycle.
County Administrator E. Luttrell Tadlock told supervisors the fund balance is used to "basically get from one tax season to the next tax season," and that the funds do not represent dollars owed to creditors but are unrestricted reserves the County may use for operations.
Chairman James Brann and Sacks discussed creating a Budget Stabilization Fund (BSF) as a first line of defense that would be used before drawing down the unassigned fund balance if revenues fall short. "The BSF would be the first line of defense in efforts to make sure that the fund balance is not touched," Sacks said.
After discussion, the Board voted unanimously to "authorize staff to move forward in working with Davenport & Company to begin the process of establishing a fund balance policy" (motion by James Brann; seconded by James Long). The motion carried 5‑0.
Next steps: staff will work with Davenport to draft a formal policy for Board consideration and, per the presentation, could propose a phased approach to reach the 20 percent target over up to three years if immediate achievement is impractical.
