on September 7, 2007 by in Uncategorized, Comments (0)
Oconee County has millions in the bank
WALHALLA — Don’t expect to find anyone associated with Oconee County government peddling pencils on a corner any time soon.
Oconee County had over $24 million in the bank Wednesday morning. By Thursday morning it had $25.2 million
Nearly $15.5 million of Wednesday’s number was in what finance officials refer to as “cash reserves,” meaning the county can get its hands on in under 90 days. More than a third of the cash was immediately available in a checking or savings account. The other $10 million was tied up in short- term (30, 60 and 90-day) certificates of deposit.
All the rest — just over $8.5 million — was encumbered and could not be tapped for other than very specific purposes, such as bond and health insurance payments.
And, if the money available this week sounds like a lot, just wait. In five weeks, tax bills will go out and by January 15, 2008, the county will have several million more in its coffers.
County officials are unashamed of their apparent wealth.
“The county has money,” Finance Director Phyllis Lombard said, going on to note that the county’s $10.8 million fund balance would only pay for county operations for 100 days in the unlikely event all revenue sources dried up at the same time.
The county’s annual operating budget is $42 million. Lombard’s 100-day reserve analogy assumes covering the county’s debt payments, which are not part of the operating budget.
“It’s not too much of a reserve,” Lombard said. “The people who set our credit rating want you to have 90 days of working capital.”
Lombard said the risk the county runs having fewer reserves is that in the case of a major, unplanned expense, especially in the first few months of the fiscal year before tax payments begin to flow, the county could have to borrow funds for operating and pay interest.
In the over 28 years she has worked for the county, no tax anticipation notes have been issued.
The way Oconee County is handling its money has changed considerably since Greg Nowell became treasurer in early February. Before Nowell began moving funds into investment accounts (CDs), much of the money was simply held in checking. Today, the county keeps only a minimum balance in checking — $665.074.88 on Wednesday and $429,603.57 on Thursday — and sweeps all remaining cash into a savings account each evening. Wednesday morning that savings account held $4,659,658.63. On Thursday it held $4,973,384.96.
Roughly $3 million in the county’s deposit accounts (as opposed to investment accounts) is encumbered, including $1,076,273.55 in a Keowee Fire District fund, which will pay for recently issued bonds. There’s another $468,448 in a delinquent tax account. The money cannot be spent but the interest it earns is used to buy equipment and supplies for the delinquent tax office.
The county’s real money, however, is now invested in 15 time deposit accounts. Three accounts had zero balances this past Wednesday. The others ranged in value from the $10 million Lombard referred to, to $40,000 in a rural fire CD.
A number of the encumbered investments are related to bonded debt. Several belong to the school district. Another is for the Courthouse ($595,000), while another ($56,000) is to pay Tri-County Technical College bonds.
Nowell said that, in addition to the reserve account of $10 million, three other investment accounts could provide cash is County Council members were inclined to spend it. Those include $2,026,976 in a solid waste fund and another $101,336 in yet another rural fire CD. Nowell said the rural fire funds represent one percent fire premium payments from the state. He said those use of those funds can only go to rural departments and can only be used for very specific purposes. Efforts are underway, he said, to distribute that money.
In this year’s capital improvement budget, the county said it would spend all of the solid waste reserves for solid waste equipment. That money was being held to pay for the costs of closing the county’s landfill when that is required.
Lombard said that for the last several years the county has budgeted over $1 million of its cash reserve to pay operating expenses. However, she said the county doesn’t always spend its budget. Last year, $3.9 million went unspent. She said $2.3 million of that likely will be spent eventually and the actual operating reserve is now pegged at $1.3 million, $300,000 recently having been designated for Stumphouse Mountain preservation.
Still, the county’s reserves continue to grow. From 2005 to 2006 alone, the undesignated fund balance rose from $7.5 to $10.8 million.
If County Council holds true to this year’s budget, that amount may actually go down as nearly $1 million in reserve funds has been designated for an expansion of emergency services.
Major investment accounts
County funds – $10.17 million
School Bond Acct. 478 – $2 millon
Solid Waste – $2 million
Courthouse sinking fund – $595,000
Major deposit accounts
Sweep savings account – $4.66 million
Keowee Fire District – $1.07 million
Administrative Checking – $665,074
Delinquent Tax Funds – $468,447