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Finance director raises reserve-limit concerns and proposes limited one-time budget pool
Summary
Facing a new state law that will cap unassigned general fund balance at 35% of expenditures and change homestead reimbursements, Black Hawk County’s finance director proposed a draft policy allowing the board to create a limited, one-time pool for departmental budget requests when revenues exceed projections.
Black Hawk County’s finance director told supervisors on June 23 that incoming state property-tax changes and limits on reserves could constrain future budgets, and presented a draft policy to allow limited one-time budget authority from a designated pool.
The finance director told the board that fiscal 2025 unassigned fund balance was about $27.44 million (roughly 56% of expenditures) and that new state rules would likely limit unassigned balances to about 35% of expenditures beginning in the FY28 process. The changes include an elimination of the current state homestead reimbursements in favor of an exemption that could reduce taxable valuations and a 2% cap on allowable levy increases even when growth exists, the director said.
To retain operational flexibility while meeting the new reserve cap, the director proposed a board-governed, one-time fund that departments could apply to if they had an unforeseen need or a near-term, beneficial opportunity that could not wait for the next budget cycle. The draft calls for clear application requirements (purpose, outcomes, alignment with strategic objectives) and board approval for any allocation.
Board members asked for more detail on whether elected officials and autonomous boards would be eligible and asked staff to circulate the draft to department heads for comment. One supervisor said the policy should be “clear that it still has to come back to the board for approval,” and another suggested the board consider various pool sizes tied to actual year-end results.
The finance director said staff would schedule another work session, incorporate supervisory feedback and share the draft with department heads and policy-review staff for a more formal follow-up. No final policy was adopted at the June 23 meeting.
Context: The proposal is an early attempt to balance the county’s capital and equipment needs against new statutory limits on unassigned fund balances. Staff said any final approach would be conservative and would use audited numbers as the pool’s basis.
