Bill Volckmann, the county’s finance director, told the Board of Commissioners this week that formalizing the policy will help the county maintain its top credit rating.
Expert guidance on rainy day funds varies. Moody’s suggests a reserve fund of 30% to earn its top rating, but it is just one of a number of factors that go into a rating decision. Cobb County’s website boasts that it has maintained a AAA rating 24 years in a row, even as it had a reserve fund of less than 30% for much of that period.
The Government Finance Officers Association recommends that local governments keep at least two months’ worth of spending in reserve, or 16.7%.
The reserve policy sets the stage for budget discussions this spring, when the county will balance requests for things like employee pay raises to combat staff shortages, social services and stormwater projects against its desire to maintain its large reserve fund.