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County approves policy to maintain bond rating

CONYERS -- At the request of Chairman Richard Oden, the Rockdale County Board of Commissioners has approved a policy to guide the county's Finance Department in maintaining its bond rating.

In presenting the policy to the BOC at its work session last week, Finance Director Roselyn Miller said the new Fund Balance Policy sets guidelines for desired levels of fund balances and is designed to establish and improve standards that will help the county maintain its bond ratings. The county's bond ratings are AA2 and AA3.

According to the policy, fund balance is a measurement of available financial resources and is the difference between total assets and total liabilities in each fund.

Under the new policy, the county will maintain a minimum unassigned fund balance of 35 percent of the upcoming year's budgeted expenditures. This minimum is designed to protect against cash flow shortfalls related to timing of projected revenue receipts and to maintain a stable budget.

The policy also calls for the county to keep the unassigned fund balance at minimum of $13.4 million. If the unassigned fund balance falls below that level, the county will take steps to replenish the fund balance.

In addition, if the county ends the year with an unassigned fund balance surplus of 45 percent more than the upcoming year's budget, the county will have the ability to use those funds for one-time expenditures that will not require further expense outlays for maintenance, staffing or other recurring costs.

There are five types of fund balances in governmental accounting:

-- non-spendable fund balance, which includes amounts that cannot be spent because they are either not in spendable form or they are legally or contractually required to be maintained;

-- restricted fund balance, which includes funds that can be spent only for specific purposes outlined by enabling legislation, externally imposed by creditors, grantors, contributors, law or regulations of other governments;

-- committed fund balance, which includes amounts that can only be used for specific purposes determined by action of the Board of Commissioners;

-- assigned fund balance, or funds that are intended to be used by the county for specific purposes but do not meet the criteria to be classified as restricted or committed; and

-- unassigned fund balance, which is the residual classification for Rockdale County's general fund and includes all spendable amounts not included in the other funds.

In other action, the Board of Commissioners unanimously approved a Local Vendor Preference Policy that will give local vendors who submit a bid that is within 5 percent of the lowest bid submitted the opportunity to match the prices of the low bidder. Currently the county requires bids for all general contracts $15,000 or greater. Professional service contracts exceeding $100,000 are required to be put out for bids. If all bidders are local vendors, the bid would be awarded to the lowest qualified bidder.

In the case of a request for proposals, local vendors will be given 5 additional points on a 500-point scale, under the new policy.

The policy would not apply to any bid or proposal in excess of $100,000. In those instances, the bid award would be made based on the competitive bid process.

A local vendor would be defined as a business that maintains a valid business license and a principal business office or a satellite office with at least one full-time employee in the county.