Beaufort County Council greenlights dialed-back reserve policy

zmurdock@beaufortgazette.comMarch 10, 2014 

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Beaufort County Council is dialing back its plans to bulk up its reserve fund, eliminating a proposal that eventually could have led to a tax increase.

Instead, the new policy simply states the county "will strive" to gradually grow the reserve until it equals about 30 percent of its annual budget.

Currently, the county holds about $24 million, or just less than 25 percent, in reserve and has no formal policy on how much to set aside for emergencies, such as a natural disaster.

In recent weeks, the county has discussed a reserve fund as large as 42 percent of an annual budget, but Monday, council members said they would opt for a more modest goal.

The new proposal, like an earlier version, states the council will strive to contribute about $500,000 a year to the fund. However, it eliminates language that would have required such a contribution -- even if doing so required a tax increase.

County Council approved the new proposal at its meeting Monday afternoon in Beaufort. The policy, which has the force of law, will require two more votes and a public hearing before it is official.

The policy puts in writing what the county is already doing by cost-cutting and diligent saving, Councilman Rick Caporale said.

County attorney Josh Gruber said the new language also quells concerns by council Chairman Paul Sommerville and Councilman Tabor Vaux that the policy would bind future councils.

In addition to helping maintain county services during a disaster, the council also has discussed using some of the reserves to offer economic incentives or to improve the county's credit rating. Most council members now say neither of those should be priorities, although last month, the council agreed to contribute $1 million from its reserve fund to help lure an undisclosed business to Buckwalter Place in Bluffton.

The county sometimes taps reserves for other reasons.

On Monday, for instance, the council approved a $100,000 supplemental appropriation from the fund for the nonprofit group Senior Services of Beaufort County, which faced a shortfall because of fewer donations and a reduction in grants from both the federal government and other nonprofit organizations.

The reserves cannot be spent without council approval, according to county rules.

The county also is considering purchasing property at Pepper Hall along U.S. 278 in greater Bluffton and has a list of dozens of capital improvement projects it wants to undertake, Caporale said. He added that with such varied ideas about how a reserve fund might be used, the council needs to be careful about what the policy allows.

It would take about a dozen years to reach the council's 30 percent goal if it contributed about $500,000 to the fund each year and did not spend from it, deputy county administrator Bryan Hill has said.

"It's going to take a few years to get there," Caporale said. "I think (the policy) came out pretty good. I'm satisfied."

Follow reporter Zach Murdock at twitter.com/IPBG_Zach.

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