If a proposal by the Financial Management Committee is adopted by the full County Commission, there could be major changes to how the county sets its annual budget and how reserve funds are used.

Members of the Financial Management Committee voted unanimously to forward a resolution to the full Commission setting a “balanced budget” policy for the county and restricting the use of unused funds transferred back to the county by the various departments and offices at the end of each fiscal year.

The idea for the policy changes was presented during the Financial Management Committee’s December meeting, and at that time the group postponed discussion until this month to allow County Attorney Josh Hardin, Finance Director Christa Byrd and Committee member Commissioner Brad Johnson to get together and come up with a written proposal for consideration.

Johnson presented the idea originally to the committee in December, and during Wednesday’s meeting he again voiced his belief that the county needed a policy requiring a balanced budget. One of the main reasons, Johnson said, was in recent years the county has dipped into reserve funds to cover recurring expenses in the budget.

As an example, Johnson pointed to raises given during the 2016-17 fiscal year, the funding for which was taken from the fund balance reserve.

“My idea was that they set their budget by the funds available, and not go into the fund balance,” Johnson said.

For the 2017-18 fiscal year budget, the Commission approved a property tax increase of 2 cents and also directed the county to recognize $160,000 the county expects to receive in interest on CDs invested through the County Trustee’s Office. Even with those revenue increases, according to Byrd, the budget remained unbalanced, and an estimated $443,000 had to be pulled from the fund balance just to cover the budgeted expenditures.

“We need to stop relying on a cushion when we set our yearly budget,” Byrd told the Committee on Wednesday.

The resolution approved by the Committee also creates a capital improvements reserve fund to help the county save money to cover the costs of improvement projects.

At the end of each fiscal year, office holders and department heads turn unused money from their budget back over to the county, and that money rolls into the county’s fund balance reserve. Under the new policy, 50 percent of those returned funds would go into the capital improvements project fund.

Carter County Mayor Leon Humphrey said several major projects are on the horizon for the county with no method to fund them currently in place. Among the projects he mentioned were renovations to turn the old jail on the second floor of the justice center into usable space and addressing the needs of the Carter County Landfill which is nearing capacity.

The resolution passed the Committee on a unanimous vote. Now the resolution will be presented to the full County Commission during their meeting on January 16 for approval. The resolution will require a two-thirds majority for approval as opposed to the simple majority required to pass most matters of business.