Fund balance debate continues as Wendel prepares budget
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MAYVILLE - On Wednesday, Chautauqua County Executive PJ Wendel will present his tentative 2027 budget.
One of the biggest topics has continued to be if the county should use more fund balance.
During the Audit and Control Committee meeting, Wendel joined in and participated in a discussion regarding the philosophy of using more reserves.
The conversation went on for more than an hour.
One of those present was Finance Director Kitty Lyons, who has requested guidance on what to do when a department goes over its budget.
Lyons said right now the county budget does not have a contingency line. She said if legislators want to have a contingency built into the budget, she can do that, which they've had in the past.
"When we haven’t had that, the understanding has been if there’s something that is out of the ordinary, unexpected, you know, something becomes a need or there’s an emergency repair like the boiler goes or a flood ... and you have to do something at that point. If there’s not a contingency, the fund balance becomes a contingency in effect," she said.
Legislator Fred Johnson, R-Westfield, said he believes other department budgets should be cut instead of using fund balance when there's an emergency.
But Wendel argued that other departments don't necessarily have additional funds available. He said the budget departments are given are designed to fund the department throughout the year.
"That's never been my philosophy to take from one department and move it to another. In other businesses, that may be appropriate. In listening to other leaders across the state, that's never been something people have done mid-year," he said.
The county's fund balance has been around $30 million to $35 million in the past few years.
Wendel said years ago, the reserves were down to $250,000. During that time, the county would budget funds for its reserves, but they no longer need to do that.
Legislator Tom Nelson, D-Jamestown, said he has heard from residents who believe that a $30 million to $35 million fund balance is too large.
Lyons said in response, there's nothing that prohibits the county from using fund balance to lower the tax rate, however she warned that reduction will only be temporary.
She used the example of a household budget.
"I mean, if you have $5,000 in your savings account and next year your utility bill goes up and you say, 'I’m going to use my savings account to pay my utility bill.' Well let’s just say your utility bill was $5,000 and you use up all of your savings account. Well, the year after that, you still have to pay," she said.
Wendel noted that fund balance rates vary by county.
"Rensselaer County, a smaller county, has a $100 million dollar fund balance and they’re proud of that. Others have much more than we do," he said.
During the August legislature meeting, a few Republican legislators said they support using more reserves in 2027.
During the Audit and Control meeting, Wendel did not indicate if he's planning on increasing, decreasing or is proposing no changes to the tax rate when he presents the budget.
He has proposed a decreased tax rate each year that he has been in office. One year did the legislature override his reduction and installed a 5-cent increase. That was in 2020 during the COVID-19 pandemic.