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County reserves steady, money not moved
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Forsyth County News

Key Forsyth County officials have the authority to move up to $5 million from county reserves to cover the growing budget deficit, though they haven't done so yet.

That was the finding of County Attorney Ken Jarrard, who the county commission directed to look into the matter.

Questions about a possible shift of funds arose after commissioners received a midyear 2008 budget report last week from Bill Thomas, the county's chief financial officer.

The report showed the county's budget deficit has grown to $6.9 million, an increase of $200,000 since April, and indicated that $5 million had been moved to help cover the shortfall.

Commissioners were concerned that they had not voted on such a transfer. In reality, however, the board had approved such a possibility when it passed the budget back in August 2007, Jarrard said.

The board's blessing allows Thomas and County Manager Rhonda O'Connor to make such a move, which they haven't chosen to do.

"It's one of those things where even if they didn't have expressed permission to do it, if it's the difference between operating and not operating, they should go ahead and transfer it," Commissioner David Richard said. "We'll worry about paperwork later."

Neither Thomas nor O'Connor could be reached for comment. Both officials, staff said, are on vacation this week.

Deputy County Manager Doug Derrer said there are no plans to use the $5 million from county reserves.

"Our current projections indicate we will not be using those funds to balance the budget," he said.

The county is weighing options on how to cover the budget shortfall.

Last week, the commission voted to freeze hiring until at least today. The move was aimed at allowing time to explore other possibilities, which include suspending some or all nonessential capital projects and major maintenance work.

The commission could revisit the issue at this afternoon's regularly scheduled meeting.

Commissioner Linda Ledbetter said she met with County Finance Director Cherrita Griswold on Tuesday to sort through the issue.

Ledbetter said she worried that transferring that much money would have left the county reserves shy of $25 million, a benchmark that helps determine the county's bond rating.

The bond rating has taken on new significance as the county prepares to issue $100 million in bonds for parks, recreation and green space. Voters approved the measure in February.

"I'm scared to death we won't get to bond that green space money," Ledbetter said. "The bond rating would be so atrocious if we have less than $25 million in reserves."

Richard agreed that keeping money in reserves above $25 million was key.

"We need that in order to be considered doing well financially," Richard said. "Transferring that much money, if you bring us below $25 million, that's a problem with the state and other financial institutions."

The county's current bond rating with financial research company Moody's Investors Service is classified as Aa1. The bond rating with Standard & Poor's, another financial researcher, is AA+.

According to Derrer, both of the ratings are considered one notch below the best possible bond rating, AAA. He said only three counties in the state have AAA ratings: Cobb, DeKalb and Gwinnett.

The county hired an auditing firm in June to take a closer look at the county's internal financial controls as well as potentially boost Forsyth's bond rating.