Advisers tell Rutherford County commissioners reserve policy could target 45%–55% unassigned fund balance

Rutherford County’s financial advisers recommended the Board of Commissioners consider adopting a formal unassigned fund-balance policy after describing current practices and peer comparisons.

George Carter of DEC Associates told the board the county’s audited unassigned fund balance at the 2023 audit is “approaching $42,000,041.07” and reviewed how rating agencies weigh fund balance when assessing long‑term creditworthiness. He recommended setting an unassigned-range minimum and maximum (he discussed a common 45%–55% range), explained options for using dollars above the maximum (commonly moved to capital programs for one‑time expenditures), and described policies to restore balances that fall below the minimum over a defined period such as three years.

Commissioners asked whether a 45% floor would risk downgrades compared with a 55% target; Carter replied that ratings depend on several factors and that a single metric does not automatically determine a credit rating. When asked whether excess fund balance is ever returned to taxpayers, Carter said some jurisdictions do so but he did not have a specific county example on hand.

Carter said fund balances provide liquidity, protect against economic downturns and can help maintain high credit ratings; he also suggested a formal policy be reviewed annually as part of the budget process. Chair (speaker 1) and commissioners asked staff to return with a recommended calendar and policy language for board consideration.

The board did not adopt a policy at the meeting; the presentation closed with a staff commitment to prepare options for future agendas.