Wednesday, November 19, 2025, 2 – 3:30 p.m. EST

The Montgomery County Charter is the constitution of the County government. As provided in the Charter, the Charter Review Commission is an 11-member multi-partisan body appointed by the County Council in coordination with the County Executive, to study and recommend changes to the Charter. The Commission’s recommendations may lead to proposed amendments being placed by the Council on the ballot to be voted upon by registered voters.

As a best practice, governments must maintain adequate fund balances to mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) and to promote stable tax rates. Fund balance levels are an important consideration in long-term financial planning. Credit rating agencies monitor levels of fund balance and the unrestricted fund balance in a government’s general fund to evaluate a government’s continued creditworthiness.

The Commission is seeking public input on the need for and the potential benefits of amending the County’s Charter to address how the County government manages budget reserves.  Specifically, the Commission seeks public input on whether to revise the Charter to address three areas:

• Minimum Reserve Requirement: Should the County Charter be revised to establish a mandatory minimum threshold for surplus funds or total budget reserves, to ensure fiscal stability and preparedness for unforeseen expenditures?  Currently, the Charter contains no target for minimum reserves although the Council has enacted legislation creating such a target and adopted a fiscal policy to implement that law. The Charter, in Section 310, specifies only a maximum for the amount of unappropriated surplus that may be in the Unrestricted General Fund, which is 5 percent of the previous year’s revenues. Section 310 allows, but does not mandate that the Council establish additional reserves by creating a surplus in funds other than the General Fund.

• The Council has established by legislation a Revenue Stabilization Fund (“RSF”) for reserves in addition to any surplus in the General Fund. The County Code requires that annual contributions be made to the RSF as needed to attain total budget reserves of 10% of the preceding year’s governmental revenues.[1]  In addition, the Council has adopted Resolution 19-753 stating its policy for the establishment and use of the County Government Reserves and other fiscal policies to ensure budget flexibility and structural stability.[2]

• If a minimum reserve requirement is added to the Charter, that requirement would not be subject to repeal or weakening in future legislation enacted by the Council as a reaction to temporary fiscal pressure because changing the Charter’s reserve requirement would need voter approval.  
• Access Protocols: Should the Charter be revised to define a formalized process or set of criteria governing the conditions under which reserve funds may be accessed, as a means to promote transparency and accountability in fiscal decision-making?
• Risk Management Review: Should the Charter be revised to require the County to conduct regular, periodic risk management assessments to inform reserve policy and ensure that fiscal planning adequately accounts for emerging risks and potential liabilities?

[1]  Montgomery County Code, Chapter 20, Article XII, §§ 20-64 through 20-72; https://codelibrary.amlegal.com/codes/montgomerycounty/latest/montgomeryco_md/0-0-0-128859

[2]  In 2010, the Council approved Resolution 16-1415, Reserve and Selected Fiscal Policies, which established a goal of achieving the Charter §310 maximum for the reserve in the General Fund of 5 percent of the preceding year’s General Fund revenues and also building up and maintaining the sum of the Unrestricted General Fund Balance and Revenue Stabilization Fund Balance to 10% of Adjusted Governmental Revenues, as defined in the County’s Revenue Stabilization Fund law. In 2011, the Council adopted Resolution 17-312, which amended and replaced Resolution 16-1415, to clarify and strengthen the County’s reserve policy. To further strengthen the County’s reserve and fiscal policies the Council replaced Resolution 17-312 in 2021 by adopting Resolution 19-753. Resolution 19-753 can be viewed at:

https://apps.montgomerycountymd.gov/ccllims/DownloadFilePage?FileName=9964_1_14264_Resolution_19-753_Adopted_20210302.pdf