How much cash reserves are enough? That’s the question Tippecanoe County officials are trying to determine. Members of the county council and commission are working out a five year financial plan before they begin crafting next year’s budget.
While the county has close to $20 million in its general and rainy day funds, a financial consultant wants there to be significant reserves in other funds too.
Commissioner Tom Murtaugh says they’ll have to find the right balance between maintaining steady revenue and increasing costs.
“We recognize, today, a number of things we need to make sure we budget appropriately for,” he says. “That includes healthcare, some other costs that we know due to changes in legislation with DOC revenues and that type of thing.”
The Department of Correction (DOC) is reducing payments to counties, as it moves to more of a community corrections model. Some other expenses impacting the general fund are increases for employees’ retirement contributions and salary increases.
Murtaugh says they’re trying to figure out if current cash balances are adequate or not.
“Can we use some of those funds for infrastructure, such as roads, bridges, drainage projects?”
Tippecanoe County ended last year with a general fund balance of more than $8 million and has a rainy day fund of about $11 million. However, a financial consultant thinks that will decrease to $6 million in three years without adding any more employees. The county had a nearly $4 million deficit in 2009.
Councilor John Basham says he’s an advocate for a rainy day fund, but thinks some of it might be better spent elsewhere.
“When you’re putting part of your rainy day back into your assets, you’re not losing money.”
A working group of commissioners and council members will be taking a closer look at the cash balance proposal from the consultant before the next joint meeting of the full group.