Beaufort County Council to reconsider reserve fund policy

zmurdock@beaufortgazette.comFebruary 24, 2014 

Beaufort County Council wants to reconsider a proposal that would require the county to contribute to its reserve fund every year.

The proposal could obligate the county to raise taxes, and such language is too inflexible, Chairman Paul Sommerville said at council's meeting Monday in Bluffton.

"I, personally, would never vote for an ordinance that mandates we raise taxes under certain circumstances," Sommerville said.

Sommerville sent the proposal back to the Finance Committee for further discussion. The committee will take up the issue at its 4 p.m. meeting Monday at the county administration building in Beaufort, Councilman Rick Caporale said.

As written, the proposal would require that a half-percent of annual expenditures be put in the county's general reserve fund until the fund is equal to about 30 percent of the total budget.

The county has about $24 million in its reserve fund now, which equals about 25 percent of its budget, according to deputy county administrator Bryan Hill.

Under the current proposal, the county would be required to set aside about $500,000 in every budget for the next dozen years to reach about $30 million, Hill said.

The council wants to increase the amount of money Beaufort County has on hand should a natural disaster, such as a hurricane, devastate the area. It also has discussed using some of that money for economic incentives or to improve the county's credit rating, but council members now say neither of those should be priorities for the fund.

The existing proposal could inadvertently bind future councils to tax increases to provide essential services and comply with the language of the proposed policy, Councilman Tabor Vaux said.

Sommerville agreed, saying he wasn't comfortable making the proposal law without knowing the circumstances of future budget. Instead, the county should be able to continue to grow the fund as it can each year, the way it has saved for the past 10 years, he said.

However, the council could set the policy and amend it periodically or even annually as it sees fit, and to account for changes from budget to budget, Councilman Jerry Stewart said.

It's also unlikely the county would have to raise taxes just to satisfy its reserve obligation, Councilman Brian Flewelling said. In that circumstance, the county would likely be in a position where tax increases are necessary to continue to support essential levels of service and programs in addition to its reserve fund, he said.

Last week the finance committee unanimously approved the current proposal, but Sommerville was out of town.

"This is one of those tricky policies that has some challenges in it," Caporale said. "It's an important ordinance, and seriously, I'm happy to take it back, look at it again and rework the language to have more consensus."

Follow reporter Zach Murdock at twitter.com/IPBG_Zach.

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