It is the policy of the BOCC that one-time (non-recurring) and unpredictable revenues shall not be used to fund on-going expenditures. On-going expenditures shall be funded with on-going sources of revenue. However, reserves may be used on a short-term basis to offset the impact of economic downturns, so long as adjustments are made to restore the structural balance of the operating budget within one to two fiscal years. (see Section #110 for more information on reserves).
At a minimum, potential uses for one-time and unpredictable revenues (including excess reserves) will be reviewed on an annual basis by the BOCC as part of the operating budget cycle. If necessary, the BOCC and appropriate governing board will review potential uses for one-time and unpredictable revenues outside of the annual operating budget cycle which, if approved, will require special appropriation for expenditure. In addition, reserves in excess of the amount established by policy may be retained, and not expended, by the County at the discretion of the BOCC.
Reserves are the difference between the current assets (cash, accounts receivable, investments, etc.) and the current liabilities (salary and wages payable, accounts payable, etc.) of each County fund. Reserves are also known by other names, such as rainy day funds, and contingency funds. See Section #110 for more information on reserves.
Excess reserves are amounts that exceed the target level for reserves established by BOCC policy. Excess reserves may exist due to one-time revenues, unpredictable revenues, expenditures being less than originally budgeted, the accumulation of resources for capital asset replacement, and/or the accumulation of resources for prepayment of outstanding debt.
One-time revenues are the result of a unique or special event (sale of a building, auction revenues, excess reserves, etc.).
Unpredictable revenues are the increment of a volatile revenue source, which is above the amount that can normally be expected to be collected during a fiscal year.