FY 27 Proposed Operating Budget

similar projection of $377.0 million for income tax in FY 2027.

While much of the capital budget is debt financed and not likely to affect the General Fund in

FY 2027, the committee is concerned

about the long-term impact of rising material prices and higher interest rates will combine to

increase debt service costs in future years. The committee welcomed the opportunity to discuss future

development in the County with the department heads of Planning & Zoning, License, Inspection &

Permits and Economic Development and encourages the county to continue to adapt to the big

changes underway in how people live, work, shop, and play.

Debt Authorization

The committee spent time discussing the county ’s debt authorization with the Treasurer,

reviewing the Debt Management Policy and the expected debt levels in future years. The policy

appears to place reasonable parameters on the issuance of debt by the county. A review of expected

levels of debt from FY 2025 through FY 2031 indicated the county remained comfortably within the

debt metrics imposed by the policy. Based on discussions with the Treasurer, the new debt needs of

the County are very manageable.

As the county issues new debt, the committee strongly urges the Administration to consider

potential impacts to debt service from other funds. The committee will continue to study this process

each year.

Fund Balance

The Committee recommends that the Fiscal Stabilization Fund be maintained at a minimum of

5% of the General Fund Operating Budget with an additional 2.5% in unassigned reserves to deal

with any unexpected expenditures or revenue shortfalls. In addition, a new revenue volatility cap

assignment of fund balance should be implemented to smooth out income tax distributions. Total

reserves in the General Fund should be maintained at a level of $150.0 million to maintain the

County’s AAA bond rating.

Additional Recommendations

The committee believes that its recommendations and forecasts should be reviewed and tested

at fiscal year-end 2026 and throughout FY 2027 as it prepares its recommendations for FY 2028.

Revisions in revenue estimates prepared by State or County agencies or supplemental budget

authorizations occurring after the date of our report may require adjustment to these

recommendations.

Typically, the c ommittee’s focus has been on income tax revenues and property tax revenues. 76