Elect Bernsen for County Judge

On The General Fund Balance

Everyone understands the need to save for unexpected emergencies and expenses. For individuals and businesses, three months of reserve funds are recommended and for counties it is six months. It is up to each county to assess their risk for emergencies, future growth and major capital improvements and establish an official reserve balance policy.

Reserve Fund Policy: I have spoken to many auditors and researched the standards. According to the Governmental Accounting Standards Board, the minimum for counties is two months’worth of expenses. Our current external auditor recommends three months. Our new external auditor suggests that less than three months warrants an evaluation. He described the six-month rule of thumb as a benchmark that counties typically use. Obviously, the higher the fund balance, the stronger the safety net.

Fund Balance History: The general fund accounts for 74% of all county spending and so for simplicity, I am only evaluating its reserve balance (including the contingency fund). Using the same methodology as the current auditor to evaluate the reserve balance, we see that in the twelve-year period between 2011 and 2022, our general fund balance was less than two months, and in eight of those years it was less than a month! There were years the general fund had to borrow from Road & Bridge to pay the bills.

Dramatic Recent Increase: In 2023, I noticed that our fund balance was very low, especially when compared to other counties. From the end of 2022 to the end of 2024 (the most recent audit), our general fund balance grew 160%, from $2.46 million (1.6 months) to $6.40 million (3.5 months). How was this possible? Generally, we spent a little less than expected and received much higher-thanexpected revenues.

Audits compare adopted budget numbers (what Commissioners Court budgeted for) to the actual amounts. In 2023 and 2024 combined, actual spending was about $270,000 less than budgeted. That is good, but it didn’t contribute much to the increase in fund balance. According to the audits, we had $4.65 million in excess revenue for that two-year period. An analysis of the budget reports show that most of this unbudgeted, excess revenue came from four major sources: various grants (SB22, CDBG) and donations (for EMS and Sheriff Department) account for $2.1 million; under-estimated property tax, ambulance fees and interest income account for $1.8 million; and a sales tax windfall accounts for $560,000.

A County Comparison: Despite our dramatic recent increase, we still have a ways to go. I downloaded 2024 audits for 37 other counties. Some have similar county populations, but most are regional neighbors (excluding coastal counties and those within the Eagle Ford Shale). Out of 38 counties, with an average general fund reserve balance of 8.4 months, Fayette County ranks 35th at 3.5 months. The highest was Burleson County at 16.3 months, and the lowest was Uvalde County at 2.4 months. Only ten had a reserve balance of less than six months.

In Conclusion: We should adopt an official policy to increase the reserve fund balance to a minimum of six months. Emergencies and disasters are not the only things we should be saving for. Given the condition of our jail, we should also be saving for a looming major capital improvement project.

There are a number of ways to increase the reserve fund balance. Chief among them is to plan to spend less than you receive. You underestimate revenues, overestimate expenses and do your best throughout the year to trim the fat and save money. Aggressive pursuit of grants is helpful and methods to increase sales tax collection should be explored. Most importantly, you have to plan to save (as the current 2026 budget does).

Elect a “conserve and save” businessman with 23 years’ worth of experience and success balancing budgets. I ask for your vote in the primary. Please support my campaign and read my other policy papers at https:// WilliamBernsen.com/. God bless Fayette County!

William Patrick Bernsen