For Shakespeare the question was to be or not to be, however, right now the Guilford County Board of Commissioners is facing a different question all together: To spend some of the county’s savings account or not. That’s the question before the board that has to pay for a host of major projects including a $15-million animal shelter, a $15-million mental health center, a $20-million Emergency Services vehicle maintenance base, and a new law enforcement building that could cost $20 million or more. So the commissioners are looking at $70 million for new buildings with construction costs rising.
There are essentially four ways to pay for all that: raise property taxes, cut costs elsewhere, issue non-voter approved bonds known as two-thirds bonds – or take the money from the county’s savings account, which now stands at about $83 million. The board could also use a combination of some, or all, of the above.
Guilford County Manager Marty Lawing, Budget Director Mike Halford and other staff say Guilford County shouldn’t touch its savings account since it will be needed in the case of a major disaster. They also say it’s important for liquidity –as well as to maintain the creditworthiness of the county.
The $83 million savings amount just confirmed in a recent audit represents 14.6 percent of the county’s annual budget. The state of North Carolina strongly recommends that local government’s maintain a savings fund of at least 8 percent of the county’s budget.
Two-thirds bonds allow a local government to borrow up to two-thirds of the amount the county paid down on its general obligation bond debt in the previous fiscal year, which means Guilford County can use two-thirds bonds to raise up to $52 million in the current fiscal year, 2018-2019, that ends on June 30.
Republican Guilford County Commissioner Alan Branson said that the board could use a combination of financing methods.
“I think you’re going to see us work on using only a portion of that $52 million,” Branson said this week.
The Republicans on the Board of Commissioners don’t like issuing bond debt of any kind because it has to be paid off down the road and they’re very reluctant to raise taxes to do so. In fact, since the Republican’s won a five-to- four majority on the board in 2012, they have never raised property taxes.
Branson said the board might take some of the savings account and issue $25 million to $30 million in two-thirds bonds but he said that, even at that level, issuing that bond debt makes him “uncomfortable.”
Commissioner Hank Henning, also a Republican, said that, given the county’s current construction needs, “We could come down a little closer to 8 percent” on the savings account.
Henning did say that he can see the wisdom in keeping money for a rainy day and he understands why county staff wants to see that number higher than 8 percent.
“On a personal level, having just 8 percent of your budget saved is just like having a little,” Henning said.