More budget leeway: Commissioners back off ‘rainy day’ fund increase

In a semi-unanimous vote Monday, Whitman County commissioners eliminated a previously required 1.5 percent increase in funds which are to be dedicated to the county’s reserve fund, known as the rainy day fund.

Worried about the potential impacts from backing off the stepped increase on the amount of money the county has planned to put in the fund, Commissioner Michael Largent urged his fellow commissioner to give more consideration to the move, but he later added his vote to approve.

Commissioners Greg Partch and Pat O’Neill said they wanted to make the move now to gain a little more leeway on working up next year’s budget in light of the current revenue pinch.

“It is in the best purpose of us that we at this time suspend the 1.5 percent increase for 2010,” said Partch.

O’Neill said it was “a show of good faith” to county employees that commissioners would do away with increasing the reserve account slice to keep more money available for 2010 in the operational part of the budget.

“You’re motivation is good and honorable, but I just don’t think now is the time to make this decision,” Largent told his fellow commissioners.

Created last year, the fund can only be tapped by resolution. This year, the fund’s first, the county set aside 7.5 percent of the 2008 current expense budget, which amounted to $1,119,029. That number was slated to ramp up 1.5 percent each year until 2014, when the reserve fund would be 15 percent of the 2013 current expense budget.

The reserve was created to counter extraordinary, unbudgeted expenses. It can only be tapped by a commissioners’ resolution.

Largent proposed an amendment to the motion that would delay a decision, but his motion died for lack of a second.

Following the meeting, Largent told the Gazette he worried changes to the restricted reserve fund could impact the county’s bond rating.

He said bond agencies factor in reserve policies when issuing ratings. An unsteady policy that is not strictly abided by reflects poorly on those agencies’ ratings.

Whitman County’s bond rating could be important because they have pledged to issue bonds to fund infrastructure construction at Hawkins’ Companies proposed stateline stripmall.

Largent added the county may have enough money in another reserve account to continue to add to the rainy day fund while at the same time whittling away at the 2009 budget deficit.

Consisting mainly of “backfill money,” the cash account had $271,609 in its coffers at the end of September.

The Legislature gave towns and counties money to offset revenue losses incurred when voters approved Initiative 695, which limited car license fees to $30.

That money has been used by the county to cover expenses during the mid-summer ebbs in property tax collection.