Wolfe Introduces Local Law Establishing a Fund Balance Management Policy

(By Betsy Saetre)

Law Would Mandate “Rainy Day Fund” and Limit Appropriations

New City, NY (June 24, 2013) – Vice Chairman of the Rockland County Legislature Alden H. Wolfe has submitted a Local Law, which, if adopted, would establish a fund balance management policy to guide the use of resources and ensure that the county maintains a solid financial foundation for the future.

Vice Chairman Wolfe explained that the Local Law would establish a targeted fund balance and create a reserve fund, which would help the County weather unexpected circumstances.   Wolfe is also recommending that the County adopt the framework, strategies and guideline developed by the Government Finance Officers Association (GFOA), a professional organization of public officials that work to identify, develop and advance fiscal practices for matters relating to public finance. Revenues that exceed annual budgeted appropriations would fund the
reserve in any given fiscal year and only after all other operational expenses have been met.

Wolfe said, “Overestimated revenues, increases in state mandates and an unprecedented downturn in the economy created a perfect storm that Rockland County is still struggling to escape from.  This proposal would require that in the future, our fund balance be managed in a fiscally responsible manner, with limitations on how it can be spent.”

Criteria for appropriating funds from the reserve would include mid-year decreases in state or federal government reimbursements, increases in unfunded mandates, expenses attributed to natural disasters such as Hurricanes Sandy and Irene, judgments or settlements or a situation that the County Legislature deems to be of urgent or critical need.  In all cases, withdrawals would require a 2/3 majority approval of the Legislature.

Many States and municipalities across the nation have adopted this long-term financial planning guide.

“In the long run,” added Wolfe, “placing these types of additional voluntary restrictions creates a greater sense of public confidence in our financial stewardship, the importance of which can never be underestimated.”