XENIA — Greene County moved into 2016 with a $25 million cash balance, following a trend in recent years of rising end-of-the-year cash balances for the county.
That cash balance, which represents the accumulation of the difference between the county’s revenues and expenses year to year, represents the source of some contention on the Greene County Board of Commissioners, which serves as the budgeting authority for the county.
“Doing nothing” or “safety net”?
One of the board’s commissioners is vocal about the notion that Greene County has too much cash in its “rainy day” fund.
“We don’t need $25 million in a bank account doing nothing,” Tom Koogler said. “I have tried to convince the commissioners for two years. I think the number that we need to hang on for a reserve should be around $15 million. I think anything over that, we ought to be reinvesting back into the communities.”
Koogler favored a conservative approach when considering those funds but said, “I think at some point in time, you have to be cautious … but at the same time you can’t be silly and have that money sitting there doing nothing.”
Commissioner Alan Anderson was comfortable with the level of cash available and described those funds as a “safety net” for the county.
“[Having funds equal to 50 percent of the county’s budget] … I think we’re about where we ought to be,” he said. “I don’t think we have too much. Never want to be where you’re scrapping to make payroll. … Businesses can take some risks. Businesses can go out and do that sort of thing and individuals can. People don’t expect government to be on the edge at all, at least I don’t.”
Commissioner Bob Glaser said he didn’t think the county’s end-of-the-year cash reserves should drop below $15 million and agreed with the idea of the funds as a safety net.
“Do you spend every dime that you make?” he asked. “Everybody puts some money aside to handle emergencies. Let’s face it, whatever can go wrong in life usually does sooner or later.”
Koogler said if the county is completely dependent on just the money it has in the bank, “We got a whole lot bigger problems in our country and our county and our community. All hell has broken loose and if we had 12 months worth of revenue, it wouldn’t be enough.”
Greene County’s $25 million cash carryover was a sum equal to more than 50 percent of the county’s general fund budget – $47.5 million – for 2015. Since 2009, the county’s cash balance at the end of the year has been equal to at least 25 percent of the county’s budget for that year, and more than 40 percent since 2011.
The county’s cash carryover size has trended upward over the last seven years, analysis of county data has shown. Since 2008, the county’s end-of-the-year cash balance has grown by more than $15 million with an average growth of about 15 percent, or $2.2 million, each year during that time period.
Greene County Administrator Brandon Huddleson attributed that growth to economic forecasts at a time when the economy began to decline.
“In 2008 when the economy began to go down, we began to reduce staff,” he said. “We reduced expenses more than our revenue reduced, so the gap between revenue and expenses changed. So we began to build that fund, because we just simply weren’t spending as much money as we were receiving.”
In the previous decade, end-of-the-year cash balances averaged a growth of about 3 percent, or $387,000 each year.
Data obtained from four comparable (in terms of budget size, population, land area and per capita income) Ohio counties (Fairfield, Licking, Medina and Portage) showed that each of those counties had available cash going into 2016 between $3.3 million and $15 million. Figures for those counties ranged from about 9 to 27 percent of those counties’ budgets for 2015.
Koogler advocated for establishing a grant program that would return some of those funds back to local communities after various projects went through an evaluation process.
Glaser said he wouldn’t be opposed to spending some of the funds on deserving projects in the county, but advocated caution: “… To just take the money and throw it to the wind because it’s there … I think it’s silliness.”
County officials noted that some of the funds will be used in the next year for capital projects including a $1.5 million HVAC upgrade project at the Greene County Courthouse, a $1.3 million improvement project at the Greene County Airport, as well as other smaller projects in the county. Glaser also said the county will have to dip into that cash to help fund security and communication infrastructure at the upcoming presidential debate at Wright State University later this year.
Commissioners noted that the fund’s levels go up and down during the year, and that a portion — Anderson estimated around $7 million in the first quarter — is used to cover expenses before taxes are collected, processed and distributed.
“A judgment call”
State laws don’t prescribe how much cash a county should or can keep available, and instead leave that number up to the discretion of local officials, specifically each county’s board of commissioners.
“It’s what [the commissioners] have a comfort level with,” Huddleson said. “… It’s a judgment call.”
Huddleson said that number is decided through economic forecasting and is ultimately based on the preferences of the commissioners.
“There’s no set answer on what you want to put away,” Huddleson said. “I talk about that with county administrators across the state. What do you feel comfortable with? What do you budget to? It’s county-by-county, it’s different.”
“If you ask me,” he said, “personally, sitting in my seat with operations to run, with employees to pay and all the elected officials and their departments to fund, there’s never enough money in the cash carryover.”
Numbers in this story have been inflation-adjusted to 2015 dollars.