Georgetown County’s fund balance reflects strategic planning, disaster preparedness

A recent audit report for Georgetown County raised some eyebrows – not because it didn’t come back clean, but because the county has nearly double what it is required to maintain in its “reserve” fund. The $29 million in the reserve, more officially known as the unassigned fund balance, reflects long-term financial planning and preparation for both major capital needs and potential changes in federal disaster assistance, said County Administrator Angela Christian.

Auditors presented their findings for Fiscal Year 2025 to County Council earlier this year. The county received an unmodified report – the gold standard in governmental auditing – reinforcing the county’s strong internal controls and sound financial management. By its own self-imposed policy, the county is required to maintain a fund balance equal to 40% of the general fund or $15 million, whichever is greater. The general fund totaled $36.2 million that fiscal year, while the county’s total budget across all funds was $121.4 million.

“The general fund is the backbone of the county’s financial core,” Christian explained. The unassigned fund balance, on the other hand, is the county’s primary financial safeguard. Generally, people think of it as being for emergencies, such as disaster recovery, or other unexpected expenses. But it also serves a broader purpose – it puts the county in a better position in economic downturns, helps fund one-time needs and is a component in helping the county maintain a strong bond rating.

“It gives us options when we need them, without having to impose sudden tax increases or emergency borrowing,” Christian said.

Georgetown County officials have intentionally built reserves in recent years for several reasons. In addition to disaster recovery, those include long-term planning for big projects the county intends to fund without issuing bonds or borrowing money.

Among the known major expenditures planned for next year’s budget are:

• Replacement of the county’s aging public safety radio system, estimated at $7 million to $8 million
• Installation of a new slate roof on the historic Georgetown County Courthouse, estimated at approximately $600,000
• Replacement of the Department of Social Services building elevator
• EMS equipment upgrades, including ambulances and other critical response equipment

When these projects are formally adopted in the upcoming budget, the funds currently listed as “unspecified” will be designated as “restricted” for those specific purposes, bringing the available reserve closer to the required 40%.

In addition to planned capital improvements, the county is making preparations for potential changes to federal disaster recovery funding. There is growing national uncertainty regarding the future role of FEMA in disaster response and recovery. Proposed federal policy changes could significantly increase the financial thresholds required for major disaster declarations, said Brandon Ellis, Assistant County Administrator and Director of Emergency Services.

“Local and state government entities across the nation are facing growing uncertainty regarding the future role of FEMA in disaster response and recovery,” Ellis said. “Proposed federal restructuring, staffing reductions and increased financial thresholds for disaster declarations reflect a broader shift toward reducing federal involvement and placing greater responsibility on state and local governments.”

Preliminary analysis indicates that only 61.5% of major disasters impacting South Carolina since 2014 would have met the proposed criteria for major disaster declarations. Georgetown County has been advised its local threshold for FEMA assistance could rise from $308,143 to as much as $1.6 million.

Additionally, FEMA assistance programs typically operate on a reimbursement basis, meaning local governments must first pay for response and recovery costs upfront and then await reimbursement. Depending on the complexity of the disaster and documentation requirements, reimbursement can take months or even several years. If a community experiences multiple disasters in a short period — such as back-to-back hurricanes or significant flooding events — the financial strain while awaiting reimbursement can reach tens of millions of dollars.

FEMA staffing reductions and expanded documentation requirements have already contributed to longer reimbursement timelines nationwide.

“For a coastal community that regularly faces hurricanes, flooding and severe weather, maintaining a healthy fund balance is not optional — it is responsible governance,” Christian said. “Our goal is to ensure that Georgetown County can respond immediately to emergencies, sustain operations during recovery, and invest in critical infrastructure without having to raise taxes or incur unnecessary debt.”

County officials emphasized that strong reserves protect taxpayers in multiple ways: by reducing borrowing costs, strengthening the county’s bond rating, providing stability during economic downturns, and ensuring continuity of essential services during disasters.

“Our fund balance is not idle money,” Christian added. “It represents careful planning for known capital needs and prudent preparation for the unknown.”

As the county moves into the upcoming budget cycle, officials say they will continue to provide transparency regarding how reserves are allocated and used.