published Friday, April 15th, 2011

Hamilton County sets record straight on reserves


by Dan Whisenhunt

The roughly $85 million Hamilton County has in reserves is spoken for, county officials said Thursday.

And, they say, those reserves help the county maintain its AAA bond rating.

At the end of their agenda meeting, county commissioners and County Mayor Jim Coppinger tried to make it clear that the county’s reserve money won’t be used to fund needs in next year’s budget. The new fiscal year starts July 1.

Finance Administrator Louis Wright said, under county policy, at least $51 million of the reserve is set aside to cover three months’ operating expenses. And much of the rest will be used for debt service, Wright said.

Coppinger said anything left over should not be put into the budget.

“We can’t use it on reoccurring expenses,” Coppinger said. “What are you going to do the next year?”

County leaders have warned that the end of a sales tax agreement with the city next month will cost the county $10.5 million and affect funding for many programs. Coppinger’s main worry has been funding the Chattanooga-Hamilton County Health Department.

Chattanooga leaders repeatedly have mentioned tapping the county’s hefty reserve fund.

Chattanooga Mayor Ron Littlefield’s spokesman Richard Beeland reiterated the city’s argument.

“They can tap into their funds,” Beeland said. “It’s their decision [whether] to use their funds for the agencies that are a legal obligation of the county.”

Coppinger said city officials aren’t well-informed about county finances.

He said the county is paying interest on about $60 million in commercial paper, a short-term debt, and has authorized $30 million more to build Red Bank Middle. When the commercial paper debt reaches $100 million, the county will issue a $100 million bond, Coppinger said.

When that happens, “we have to start paying not only the interest but the principal,” Coppinger said. “For the first few years we’ll be paying $10 million per year.”

The reserves will be needed to service the debt, Coppinger said.

Beeland said even so, the county will still be putting $8 million a year into its reserves.

“They’ve put $8 million a year into their reserves for the last four years,” he said.

Other commissioners defended the county’s reserves Thursday.

“I think the perception is the county’s just sitting on a massive amount of money we’ve got to spend,” Chairman Larry Henry said. “It’s all earmarked.”

Wright said the county since 2006 authorized $287 million in debt, mostly for school construction.

Commissioner Fred Skillern said that’s reason enough not to touch the fund balance.

“We still owe more than we’ve got, and I’m going to be very reluctant to spend any we’ve got except on debt,” he said.

about Dan Whisenhunt...

Dan Whisenhunt covers Hamilton County government for the Times Free Press. A native of Mobile, Ala., Dan earned a degree in broadcast journalism from the University of Alabama. He won first place for best in-depth news coverage in the 2010 Alabama Press Association contest; the FOI-First Amendment Award in the 2007 Alabama Press Association contest; first place for best public service story in the Alabama AP Managing Editors contest in 2009 for economic coverage; and ...

Other National Articles

1
Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
Flyfisher said...

Good for Hamilton County. Way to show some fiscal responsibility.

April 15, 2011 at 1:41 p.m.
please login to post a comment

videos »         

photos »         

e-edition »

advertisement
advertisement
400 East 11th St., Chattanooga, TN 37403
General Information (423) 756-6900
Copyright, Permissions, Terms & Conditions, Privacy Policy, Ethics policy - Copyright ©2014, Chattanooga Publishing Company, Inc. All rights reserved.
This document may not be reprinted without the express written permission of Chattanooga Publishing Company, Inc.