2013 Approved Budget - Lake County Illinois

Reserve Analysis
The County’s Reserve Fund Balance Policy is described in the FY2013 Budget Policies section
of this document. The chart on the following page illustrates how the County complies with this
policy. The FY2012 section of the chart presents the following information:
Beginning fund balance, which is the actual ending balance as of November 30, 2011;
FY2012 Modified Budget expenses;
FY2012 Modified Budget revenue;
Resulting change in fund balance and estimated ending fund balance;
Estimated carryovers; and
County Board designated reserves, which include outstanding risk insurance liabilities,
debt service reserve, and a reserve for capital projects.
The chart provides an estimated ending fund balance for FY2012, and thus the beginning fund
balances for FY2013 assuming all FY2012 budgeted revenues are received and expenses are
spent.
The next portion of the chart shows the calculation to determine the appropriate reserve
requirement consistent with County policies:
A reserve for the forecasted cash flow requirement, which is approximately 1.5 months
of cash flow needed for operations based on the FY2013 budget;
An operating cash reserve, which is 15% of the approved FY2013 appropriations budget
for each operating fund, except for FICA, IMRF and certain risk insurance costs; and
The budgeted cash use, which is the net of FY2013 budgeted revenues and expenses
for the property tax operating funds.
In addition to illustrating that the County is meeting its reserve requirement, the exhibit
represents the estimated ending fund balance for FY2013 based upon this series of calculations
and estimates. In addition, the percent change column indicates the change from the estimated
FY2012 ending fund balance to the estimated FY2013 ending balance.
Several fund balances are expected to have changes in excess of 10% as a result of the
FY2013 budget. The fund balances for FICA, IMRF, Health Department, Division of
Transportation, and Winchester House are expected to decline due to strategic use of cash
rather than property tax to bring fund balances more in line with reserve requirements. The
Veteran’s Assistance Commission and T.B Clinic fund balances are expected to increase due to
allocating a higher portion of the tax levy compared to the previous year in order to restore fund
balances. In addition, the Stormwater Management Fund is expected to increase significantly. It
was allocated a higher portion of the tax levy to restore its fund balance after several major
projects.
When analyzing the Special Revenue funds, the timing of the revenues and expenditures do not
always match, resulting in some large percentage changes year over year. Probation Services
Fee revenue is expected to exceed expenses in that fund in FY 2013 in preparation for future
projects, resulting in a favorable increase in fund balance. By contrast, Court Document Storage
and Vital Records Automation are expected to see declining fund balances as the revenues
generated in these funds simply do not offset the expected costs. Law Library, Tax Sale
Automation and Coroner Fees are expected to reduce reserves to fund projects designated by
the specific fund in FY 2013.
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