To: Mr. Jim Michaels
Chair, Montgomery County Charter Review Commission, and the Members of the Commission
Subject: Recommendation for Revision of the County Charter Regarding Budget Reserves
The County Charter must be revised to strengthen the County’s management of budget reserves. While current policies exist, embedding these critical fiscal standards in the Charter provides a permanent institutional protection for the County’s financial integrity, which is essential for consistent regional investment and service delivery.
1. Minimum Reserve Requirement: Mandate a Minimum Threshold as a Percentage of Budget
- Point: The Charter must be revised to establish a mandatory minimum threshold for total budget reserves.
- The Problem: “Currently, the 10% target is based on legislation. That means a simple legislative majority, under temporary fiscal pressure, could weaken or repeal the target, jeopardizing our financial safety net.”
- Rationale, and the Solution: The County requires fiscal resilience to guarantee sustained, predictable funding for infrastructure projects, local services, and school modernization. Placing the minimum reserve requirement (e.g., the current 10% target) as a percentage of the annual budget within the Charter prevents its temporary repeal during periods of legislative or economic pressure. This stability is critical for reliably funding long-term regional plans.
2. Access Protocols: Define Formalized, Restrictive Criteria
- Point: The Charter should be revised to define a clear, restrictive set of criteria and a formal process governing the conditions under which reserve funds may be accessed.
- The Problem: “Without clear Charter-level criteria, reserves risk becoming a default funding source to fill annual budget gaps. This is poor governance and undermines the fund’s purpose.”
- Rationale, and the Solution: Formal access protocols enhance accountability and transparency. Reserves—taxpayer funds—must only be drawn upon for genuine, non-recurring emergencies, not to cover annual structural deficits. A Charter-mandated supermajority vote for drawdown is a necessary institutional check to safeguard these funds for large-scale, unexpected events that could impact safety and continuity.
3. Risk Management Review: Mandate Periodic Assessment
- Point: The Charter should be revised to require regular, periodic risk management assessments to inform reserve policy.
- Rationale, and the Solution: The County must be proactively prepared for all risks, including severe weather events and aging infrastructure liabilities. Mandating a comprehensive, data-driven risk assessment ensures that reserve targets are adequate to cover specific regional vulnerabilities, promoting informed fiscal planning that directly supports community resilience.
Conclusion
I urge the Charter Review Commission to recommend revisions that institutionalize fiscal prudence for the long term. Charter-level protection of reserve policies is paramount to ensuring the County has the financial stability required for sustained investment and high-quality service delivery.
Thank You!
Radwan Chowdhury
Candidate, County Council At-Large