BC 2005 06 14 RECESSED - Laserfiche WebLink

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June 14, 2005 (Recessed Meeting) Page 228 Commissioner Privette made a motion, set the tax rate at 53 cents. The motion and Freeman voting for and Commissioner Chairman Carpenter voting against. seconded Commissioner Freeman, to failed with Commissioners Privette Juba, vice Chairman Carruth and Vice Chairman Carruth read excerpts from rating agency reports regarding the County's financial situation and the impact that the continued use of fund balance would have on the County's bond rating. He presented a proposed Resolution that addressed the need to restore reserves and maintain the 15 percent benchmark for fund balance. UPON MOTION of Vice Chairman Carruth, seconded by Chairman Carpenter and unanimously carried, the Board adopted the following Resolution. Resolution No. 2005-17 CABARRUS COUNTY BOARD OF COMMISSIONERS RESOLUTION WHEREAS, the Cabarrus County Board of Commissioners, through prudent and disciplined fiscal strategy during the 1990s, saw the County awarded with a AA bond rating in 1999 and 2001, which is normally reserved for those counties that show vision, planning, and foresight in their financial planning and budgeting; WHEREAS, Cabarrus County has 1999, placing a tremendous burden roads, school buildings, utilities, added over 25,000 new on our infrastructure and education; and residents since systems such as WHEREAS, revenue shortfalls, coupled with increased demand for services and public assistance, resulted in the loss of key revenue from the state to the county, and transferred a greater burden to pay for the cost of state government to the local taxpayer; and WHEREAS, from 2000 through 2005, the Board of Commissioners chose to use fund balance and capital reserves targeted to help build the new county jail and buy land for new schools to balance the operating budget, thereby avoiding a tax increase; and WHEREAS, use of one time revenues to fund recurring operating expenses only makes the budget deficit bigger the next year; and WHEREAS, a fund balance is positively necessary to achieve a minimal positive cash flow from July 1 - December 31 each year; which provides no cushion whatsoever for unforeseen expenses; and WHEREAS, the mean unreserved, undesignated fund balance as a percentage of expenditures for other Aa2 counties is 21.4%; and WHEREAS, all three of the major bond rating agencies, as well as the County's financial advisor and underwriter, have warned the County against continuing the fiscally unsound practice of using fund balance to pay for recurring expenses, creating a structural deficit; and WHEREAS, the major bond rating agencies have also warned against allowing the undesignated fund balance to fall below the current board policy of 15% as this practice will compromise the County's ability to respond to emergencies; and WHEREAS, the County continued to engage in unsound fiscal practices despite the warnings received from the bond rating agencies, resulting in a ~negative outlook" from Moody's Investors Service; and WHEREAS, a ~negative outlook" is a precursor to a bond rating downgrade, unless the unsound fiscal trend is reversed; and WHEREAS, downgrading of the County's bond rating will result in higher interest rates being paid on the County's debt, which will result in an increase in the amount paid each year to honor the County's obligations, and could result in higher taxes for our families and property owners; and WHEREAS, each member of the Cabarrus County Board of Commissioners sees the importance of fiscal responsibility in the protection of our AA bond rating. THEREFORE, BE IT RESOLVED that the Cabarrus County Board of Commissioners wishes to emphasize its desire to maintain the AA bond rating