Fannin County, Texas -- As the county budgeting process nears the home stretch, General Fund reserves are often discussed and it seems like a good time to consider how the reserves have been used in previous years.

In five out of the past seven years, Fannin County has used a relatively small amount of reserves it has accumulated in the General Fund in order to balance the General Fund at the end of the fiscal year on September 30.

To use round numbers as an example, if the county needs $100,000 at the end of the fiscal year to balance a $20 million budget, that means the county's projections were only off .5%. Considering the size of the budget, that is relatively close to the mark. 

In back-to-back fiscal years during this time span, the county had no need to touch reserves in order to balance the budget.

In fiscal year 2019-2020, General Fund income was $11,889,283.82 and expenses were $13,151,844.04, which meant the county had to take $1,262,560.22 out of reserves to balance the budget. That appears to be the most challenging year during this seven-year timeframe.

In fiscal year 2020-2021, General Fund income was $13,903,281.52 and expenses were $14,256,573.30, which meant the county needed to dip into reserves for $353,291.78 to balance the budget.

In fiscal year 2021-2022, General Fund income was $14,533,962.37 and expenses were $14,533,962.37 for a balanced budget with no need to cut into reserves.

And the budget balanced again without touching reserves in fiscal year 2022-2023, with $15,407,024.01 of revenue and $15,407,024.01 in expenses.

In fiscal year 2023-2024, the county budgeted $15,899,959.38 of income, and budgeted $16,185,307.44 in expenses, for a deficit of $285,348.06 that had to come out of reserves.

The past two fiscal years have been particularly promising, although one year's numbers might be misleading at first glance.

In fiscal year 2024-2025, the county budgeted $17,330,927.08 of income and $17,427,853.55 of expenses, which called for $96,926.47 to come out of reserves to balance the budget.

In fiscal year 2025-2026, it is noteworthy that $2.3 million had to come out of reserves to pay for work at the Justice Center. So when you see that the county budgeted $18,734,766.66 of income, budgeted $21,116,902.67 in expenses and had to dig into reserves for $2,382,136.01 in order to balance the budget, remember that $2.3 million went to the Justice Center. Without that large expenditure, the county's numbers were only off $82,136.01 -- which equates to a fraction of one percent of the total budget.

Although the situation is fluid, the county currently has approximately $9 million in the General Fund, with $637,500 of that restricted for future use on Hwy 121. The county is expected to maintain approximately $5 million in reserves to be compliant with the Fund Balance Policy and to mitigate any emergency situations that might arise.

The struggle to maintain adequate reserves typically happens in the first quarter of the fiscal year because property taxes haven't started coming in at that time of the year to offset expenditures coming out of the General Fund.