Calvert County Faces Shrinking Fund Balance in Fiscal 2017, New Budget Process

In initial projections provided to the Calvert County Board of Commissioners, Calvert County staff are projecting a negative unassigned balance for fiscal 2017. As reported by Southern Maryland Newspapers Online,

The general fund forecast includes a continually shrinking fund balance, with a projected negative unassigned fund balance in 2017. The unassigned fund balance is essentially the county’s savings account. A deficit in unassigned fund balance of $537,000 is projected in 2017.

Further increasing this negative fund balance will be employee pay increases projected for fiscal 2017.

Budget staff cautioned that rating agencies take fund balances into account when assigning bond ratings and that the use of stabilization funds to offset this negative balance should only be used for one-time expenditures.

Budget staff also gave a presentation on a new budgeting approach being implemented, service-based budgeting. Terry Shannon, Calvert County Administrator, further explained the approach during the meeting.

 …it is more citizen-friendly and provides an alternative way to show how tax dollars are spent, said Shannon. Service-based budgeting is not a replacement for the current budgeting process, she said, and the first time around, the county is focusing only on the general fund, not the enterprise funds or Capital Improvement Plan. About 18 percent of the general fund is going through this process, which is a reflection of how much money the county has that is not required by other mandates, such as the funding required for the Calvert County Board of Education.

With service-based budgeting, analysis is done on how much money is spent on specific services and functions with descriptions in laymen’s terms of what the services and functions of the government are.

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