Board wants a spotlight on off-budget reserves

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SANDPOINT — An opaque cloud enshrouding a hotly-debated aspect of Bonner County’s finances could be dissipating after more than 20 years.

County commissioners Mike Nielsen and Cornel Rasor insisted on Tuesday that all off-budget reserve fund accounts be laid bare for the public to see and factored into the annual budget-setting process.

“What we’re looking to do is to make that the operational mandate for the county — that from here on forward all off-budget reserves will be on the budget,” Rasor, the commission’s chairman, said.

The extent of the general and justice fund reserves managed by Bonner County Clerk Marie Scott has never been fully divulged, although commissioners say the figures are buried within audits conducted on county finances.

But the reserves, which Nielsen currently estimates to be in the range of $8-10 million, have not been included in the budget and were not factored into the setting of property tax levies.

The reserves also were not properly disclosed to the Idaho State Tax Commission and budget carryover used to cover payroll and operating expenses before tax revenue is received was never expressly moved into the next fiscal year by commissioners as required by Idaho law, Nielsen said.

Some of the carryover could have been used to decrease the levy rate.

However, commissioners repeatedly emphasized that the off-budget reserve funds are accounted for and they are not accusing Scott of misusing them.

“It appears that there has been absolutely no misuse of those funds,” said Rasor. “No one has ever misused those funds. They’ve just been off-budget in surplus for the county’s use.”

Scott declines to go before the board without independent legal counsel, but observed part of the commission’s discussion. She did not immediately respond for a request for comment on the issue after the meeting.

The reserve funds have been used to get the county out of countless financial jams over the years, but they have also been a point of contention with taxpayers because Scott has declined to divulge their balances.

The issue came to a head earlier this month, when the county’s bond counsel in the courthouse remodeling project questioned the accuracy of cash-forward balances listed on a tax commission reporting form. They showed more cash on hand than was listed in the county budget.

Nielsen said he was unaware that the reserves were not being fully disclosed to the state and that the carryover wasn’t being properly advanced into the next fiscal year.

“These moneys were never identified, quantified or appropriated annually by this board. Instead, the money functions as a multi-million-dollar, unlimited, unrestricted slush fund,” said Nielsen.

Nielsen said the undisclosed funding essentially renders county government unaccountable in its fiduciary duty.

Commissioner Lewis Rich cast dissenting votes on procedural matters before the board on Tuesday, but otherwise said little. He also did not immediately respond to a request for comment after the meeting.

The board’s general counsel, Deputy Prosecutor Scott Bauer, urged commissioners not to draw on the reserve funding until next October, when they can be properly reported to the tax commission.

“All the moneys that were anticipated to be carried forward this year that were off-budget are unusable in my opinion,” Bauer said.

If public officials make an expenditure in excess of the budget appropriation outside of a few of narrowly-defined exceptions, everybody involved in the move could be held liable for the funds and prosecuted.

Tuesday’s meeting was attended by a number of residents affiliated with the Tea Party and conservative movements in Bonner County.

“We, the public, want more transparency and we don’t feel we’re getting it,” Danielle Ahrens told commissioners.

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