Douglas County received more revenue in 2019 than it budgeted for; much of the extra money is now in reserve accounts
photo by: Chris Conde
The past year was good for the Douglas County government in terms of bringing in revenue, allowing the Douglas County Commission to recently authorize the ability to spend an additional $3.1 million.
However, County Administrator Sarah Plinsky said the county expected to receive more money in 2019 than it had budgeted for, and it is highly unlikely it will spend that money before the end of the year, when the 2019 budget expires.
“We probably won’t spend it,” Plinsky said. “It’s included in the expenditure authority in case I need to (spend it).”
The county saw an increase this year because vehicle owners paid about $300,000 more in taxes than the county expected; the county’s investments earned about $500,000 more in interest than expected; and shoppers paid about $400,000 more in sales taxes than the county expected, among other things.
Some other categories came in a little lower than expected, but the county’s general fund — which is the largest and broadest fund — took in about $1.95 million more than the county expected. The county has some smaller, narrower funds that also generally took in more money than expected.
In addition, the county started the year with more money in its accounts than expected. At the beginning of 2019, the county’s general fund balance had $1.3 million more than the county had originally budgeted for.
All told, the county has about $3.3 million more available in its general fund than what it had planned for in the summer of 2018, when the commission crafted the 2019 budget.
The extra money isn’t an accident, though — in a way, it’s actually baked into the budget process.
Each year, county staff purposely bases its budget process on a “conservative” estimate of what it will earn through its several revenue streams, Budget Manager Cammy Owens said. That’s to make sure the county doesn’t overspend if the revenue comes in lower than expected.
“Every year when we do budget, we intend the revenues to come in over what we are budgeting … in case we have a bad year,” Owens said.
In 2019, the county decided to allocate much of the extra money to reserve accounts, which the government has the authority to spend, rather than leaving it in its unencumbered cash reserves, which it cannot spend. The biggest chunk of the extra money was put in the reserve accounts.
But just because the money is put into those accounts does not mean it will be spent in 2019, or even in 2020 for that matter. Plinsky said the 2020 budget has already been crafted and approved by the County Commission and the county is expected to operate within that budget.
“I want to hit that target,” Plinsky said of the 2020 budgeted allotments.
However, putting the money in a reserve account is sort of like spending the money because it requires the commissioners to decide on the general way they are going to use it. For example, if the county puts money in an equipment reserve fund, the county has to use the money to buy pieces of equipment. It cannot be used for other purposes unless the commission amends the budget again and transfers the money to a different account.
Plinsky said the county has not yet decided which reserve accounts the approved transfers will be allocated to. The County Commission is expected to consider making those final allocations in either January or February.
In February 2019, while allocating excess revenue that was found in the 2018 budget, the County Commission put the money in the capital improvement project reserve fund and the equipment reserve fund, among others, according to county documents.
Even with the approved new spending authority, the change still left about $3.03 million in the county’s unencumbered cash reserve. That is also an increase over the original 2019 budget, which had about $2.93 million. That fund is similar to a general savings account or a rainy day fund. It can be used for a variety of purposes, but it can’t be spent on a moment’s notice. Rather, the County Commission would have to amend its budget — a paperwork process that can take a few weeks and also requires a vote of commissioners — before the money could be spent.
While other local governments, such as the City of Lawrence, have much larger unencumbered cash reserves, Plinsky said the county prefers keeping its “lean” to make sure it has the authority to spend money if something dire, like an economic recession, occurs.
“We’ve kept it purposefully lean and it’s been a strategy,” she said. “If (tax revenue takes a dive) we have the ability to access those funds to help us get through a year or two.”
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