Patrick County adopts 20% fund-balance policy, new debt limits

The Patrick County Board of Supervisors on a unanimous vote adopted a package of financial policies intended to formalize reserve levels and debt limits ahead of the July 1 start of the new fiscal year.

Austin Sachs of Davenport & Company told the board his firm recommended a 20% minimum for the county's unassigned fund balance and creation of a budget-stabilization fund at 2.5% of the budget. "Unassigned fund balance, we are recommending a policy of a minimum policy of 20%," Sachs said during a slide-driven presentation that cited peer comparisons and the county's recent fiscal performance. He noted the county's FY25 unassigned fund balance was about $19,000,000.

Sachs also outlined debt-policy metrics including a not-to-exceed target of 3.25% of assessed value for outstanding debt and a debt-service cap framed as no more than 10% of the annual budget. He presented scenarios showing current annual debt service of about $2.627 million and projections that debt ratios will decline as existing principal is paid down.

Chair opened the floor for a motion after the presentation; board members moved, seconded and voted to adopt the policies as presented. The board recorded aye votes from Marshall, Kendrick, Cox, Wood and the chair. The policies are meant to provide a formal waterfall for surpluses that prioritizes refilling the 20% unassigned balance, topping up the stabilization fund and then allocating any remaining surplus to capital reserves or board-directed projects.

The action gives county staff a policy framework to guide budgeting, reserve management and future debt issuances, but it does not itself authorize new borrowing.