County Manager Got It Right This Time

Comments at Arlington County Board Meeting, November 27, 2018

I am delighted that instead of spending the lion’s share of FY18 close-out funds, the County Manager proposes to reallocate $16.5 million of it to next year’s budget. This is in marked contrast to last year’s close-out appropriation, wherein the County Manager allocated over $11 million to pet projects and contingencies.

I would like to think that my criticism of the FY17 close-out proposal had something to do with the County Manager’s fiscal prudence this year. But I doubt it. I think the real culprit was John Vihstadt, who in November, 2016 offered several amendments to the FY16 close-out resolution to defer reallocation of most discretionary FY16 close-out funds until the next budget cycle. Vihstadt’s rationale was that except for clearly identified emergency needs, allocation of the prior year’s budget surplus should be deferred till consideration of the following year’s budget.

While County Board voted down most of Vihstadt’s resolutions in 2016, it is comforting to know that some two years later, the County Manager is listening.

That said, I am concerned about the decision to allocate yet more funds to an already robust General Operating Fund Reserve. This has been done to satisfice the credit rating agencies who insist on a 5% minimum reserve in excess of prior year’s expenditures. I’ve got a problem with saddling municipalities with such onerous reserve requirements, when the federal government itself is $21.4 trillion in debt and has a current deficit of $985 billion.

If the County must meet this reserve requirement to maintain its bond rating, why doesn’t it reallocate some of its contingency funds to the reserve? While the Manager has demonstrated that his own contingency is needed to meet unforeseen expenses, separate allocations for a Self Insurance Reserve and Economic and Revenue Stabilization Contingent are overkill. Add to that contributions to the AHIF fund, which should not be funded at all, considering that it does not in fact deliver affordable housing to anyone in the County.

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