A proposal to increase the amount of money Beaufort County has for emergencies would lock the county into adding to the account each year -- even if doing so required a tax increase.
The rule would require dedicating a half-percent of annual expenditures to the general reserve fund until the fund is equal to about 30 percent of the total budget, according to the proposal unanimously approved Monday by the County Council's Finance Committee.
If approved, the county would need to dedicate about $500,000 in every budget for the next dozen years to grow its reserve fund to about $30 million, according to county officials.
The county's reserves are now at about $24 million, which equals about 25 percent of its budget, according to deputy county administrator Bryan Hill.
County leaders say they want to grow the savings to help keep the county operating should a natural disaster, such as a hurricane, devastate the area. They have also discussed the possibility of using the money as an incentive to help attract business to the county or to improve the county's credit rating, but council members now say neither should be the fund's main focus.
The council has considered a range of amounts to keep in the fund, from 25 percent to 42 percent. It eventually reached a compromise of 30 percent.
Each year, for every dollar that is spent, a certain amount would have to be set aside for reserves, councilman Brian Flewelling said.
"It would basically just become another part of our annual budget process," Hill said.
The money in reserves could not be spent without council approval, according to county rules.
County Council is scheduled to vote on the policy next week, the first of three required votes. A public hearing is also required.
Based on expenditures in fiscal year 2013, which ended in June, a half-percent of the county's annual expenditures would equal about $490,000, Hill said.
Requiring an annual deposit to the savings account could one day mean the council must consider a tax increase to pay for the expense, Flewelling said.
"I think that's a commitment we ought to make," Flewelling said.
That's an indication of how serious the council is about growing the fund, Finance Committee chairman Rick Caporale said.
"For (County Council), it's a form of discipline," Caporale said.
Council could revisit the ordinance in later years if the half-percent requirement becomes too much, Caporale said.
Follow reporter Zach Murdock at twitter.com/IPBG_Zach.