Cents & Sensibility: Alachua County’s Budget in Eight Chapters
With all the discussions happening across Florida about local government budgets, Alachua County is joining the conversation through this series: Cents & Sensibility: Alachua County’s Budget in Eight Chapters.
This series breaks down how the county budget really works, where the money comes from, how it’s used, and how decisions are made that affect daily life in our community. Each chapter explains one piece of the budget puzzle in clear, practical terms, because understanding your local government’s finances shouldn’t require a finance degree.
Chapter 6: Reserves - Planning for Rainy Days
Purpose and Policy
One of the fundamentals of responsible fiscal management is maintaining strong policies for holding money in reserve for unpredictable and uncontrollable events. By establishing reserves, local governments create a financial safety net against the unexpected, such as natural disasters and economic downturns. Reserves also provide a tool for capitalizing on unforeseen opportunities that may arise outside of the budget process. Credit analysts look for solid, well-managed reserves when rating counties, which helps maintain strong credit and lower borrowing costs.
When a hurricane hits, the economy changes, or if funds from federal and state governments are reduced, Alachua County still has to continue serving its residents by keeping ambulances running, firefighters and sheriff's deputies responding, roads clear, and the government operating. Reserves help ensure that there are no sudden service cuts.
After a major storm reserves can cover emergency overtime and debris removal until insurance or federal reimbursements arrive. Once those funds are received, the reserve is replenished to keep it ready for the next emergency.
Our "Safety Net" Reserves
The county has many reserves set aside with specific requirements, such as future debt payments, non-taxing funds to be spent over several years, and insurance claims of the future, to name a few. Each fund has specific limits. For instance, debt service reserves can only be used to pay debt, while enterprise fund reserves, such as solid waste fees, remain within their operations. However, the reserves used as a safety net are those in the county's operational funds, which are primarily supported by property taxes, including:
- The general fund
- The Municipal Services Taxing Unit (MSTU) for Law Enforcement
- The Municipal Service Benefit Units (MSBUs) for fire services and stormwater
The general fund, which is primarily funded by property taxes, provides the broadest cushion for countywide services, mainly due to its less restrictive nature.
Why Not Spend It Now?
Reserves aren’t meant for ongoing expenses. Using them to fill regular budget gaps weakens financial stability and can lead to higher borrowing costs and/or increased taxes. The county follows best reserve practices by publishing policies, requiring board approval for draws, and reporting how and when reserves are used.
Summary
A disciplined reserve policy helps the county weather the unexpected while maintaining steady operations and keeping costs low for taxpayers. Alachua County’s reserves are not slush funds. They are a legally authorized, publicly overseen buffer that:
- Keeps core services steady during emergencies
- In emergencies, reserves bridge cash flow until reimbursements arrive
- Helps maintain strong credit and lower borrowing costs
- Reduces the risk of service cuts in the event of an unexpected occurrence
- Earmarked for long-term use, specific to designated purposes when the need arises
UP NEXT - Chapter 7: The Total Budget: Much More than Property Taxes
Catch up on previous chapters: