BOS assigns $194M FY25 budget surplus to one-time priorities

By Sophia Clifton

On Jan. 6, the Loudoun County Board of Supervisors approved a detailed plan for using nearly $194 million in unassigned Fiscal Year 2025 General Fund balance, directing the surplus toward one-time needs, reserve strengthening, capital contingencies, and a slate of supervisor priorities. 

The action, taken during the Board’s regular business meeting, reflects the county’s long-standing fiscal policy of avoiding recurring spending commitments when allocating prior-year fund balance.

According to county staff, the FY 2025 surplus totaled $194,392,805, a figure lower than the balances realized in the two preceding fiscal years but consistent with revenue forecasts. As the staff report explained, “The amount of unassigned General Fund balance at the end of FY 2025 is lower than the ending balance in FY 2023 and FY 2024, which is consistent with staff’s forecasts about revenue growth.”

The surplus was driven largely by higher-than-expected tax revenues on data center equipment, a revenue stream that continues to outperform conservative projections. By comparison, the FY 2024 surplus reached $259 million.

Staff emphasized that Loudoun’s fiscal policies strictly limit how unassigned fund balance may be used. The Jan. 6 staff memorandum stated that “Prior year General Fund balance should only be used for one-time purposes and be aligned to existing projects and priorities of the Board.” That principle framed the entire allocation package ultimately adopted by supervisors.

Of the $194 million total, $34 million was dedicated to one-time needs in FY 2027, including capital projects, the Capital Asset Preservation Program, and debt service funds. Staff noted that setting aside funding for future capital years can help smooth local tax funding requirements and reduce reliance on borrowing as projects advance.

A significant portion of the surplus was directed toward strengthening county reserves and internal funds. Supervisors approved $25 million for the county’s Fiscal Reserve, maintaining compliance with Board-adopted policy targets.

Additional allocations included $11.7 million to the county’s self-insurance fund, intended to rebuild health insurance claim reserves that had declined in recent years. The staff report noted that the county’s health insurance actuary recommends maintaining a claims reserve equal to 18 percent of annual expenditures.

The Board also approved $45 million to replenish Capital Improvement Plan contingencies, restoring flexibility for land acquisition, project cost escalation, and other unforeseen capital needs.

Other internal investments included $10 million for cybersecurity expenses and $3.5 million for vehicle replacements, both framed as one-time capital or infrastructure needs rather than ongoing operational expansions.

The funding plan also included $17.5 million for Loudoun County Public Schools, directed primarily toward school system health insurance costs. Staff outlined how rising claims and past premium holidays during the pandemic had drawn down reserves in the LCPS self-insurance fund, making a one-time infusion appropriate.

Beyond reserves and capital contingencies, supervisors allocated funding for several Board-identified priorities, including $5.8 million for pilot transit projects, $10.5 million for the county’s Housing Fund, $12 million for general services facilities design, $950,000 for a crosswalk safety study at Whitfield Place, and $2 million for invasive species removal.

Some of the FY 2025 fund balance was initially directed toward establishing a Federal Impacts Contingency Fund, amid concerns that federal funding or programs could be reduced. Under the staff recommendation, $16.4 million was to be allocated to that contingency.

However, during the January 6 meeting, Supervisor Laura A. TeKrony (D-Little River) successfully proposed redirecting $750,000 from the federal impacts fund to support design work for the Goose Creek Stone Bridge rehabilitation project, planned by NOVA Parks.

TeKrony described the bridge as a significant historic asset and emphasized the urgency of addressing its condition. “The recent engineering report recommends an extensive rebuild that would involve disassembly of much of the bridge and reassembly to bring it back to the condition like it was 200 years ago,” she said. “Such a repair would secure the future of this iconic structure for generations.”

The Goose Creek Stone Bridge, which spans four arches and dates back more than two centuries, played a role in the Battle of Upperville. The full rehabilitation project is estimated to cost between $4.5 million and $6.5 million, with TeKrony’s motion covering only the design phase.

While a majority of supervisors supported the amendment, Supervisor Matthew F. Letourneau (R-Dulles) raised concerns about the budgeting process itself.

“This is not how you should budget,” Letourneau said during the meeting. “You should see the scope of what the requests are and then if you want to fund this, you can fund it. We don’t have to move this contingency funding today. This federal contingency is sitting there the entire year.”

Letourneau continued, arguing, “This motion would be appropriate really at any time to just transfer, and then we could actually look at the budget and decide what year it goes into, and then you would have a decision that you could actually make with all the facts in front of you.”

Supervisor Kristen C. Umstattd (D-Leesburg) also expressed reservations, noting that the full impact of potential federal funding reductions remained uncertain and that it might be premature to reduce the contingency fund.

Despite those concerns, TeKrony’s amendment passed on a 7-2 vote, with Letourneau and Umstattd opposed.

With the amendment incorporated, the Board approved the overall fund balance allocation package by a wide margin. The decision capped a process that began with staff analysis and committee review before reaching the full Board.

County officials emphasized that the FY 2025 surplus, while substantial, reflects conservative budgeting assumptions rather than unexpected windfalls. The use of the funds for one-time purposes aligns with Loudoun’s broader strategy of maintaining strong reserves, supporting capital needs, and avoiding structural imbalances in future budgets.

As staff noted in the Jan. 6 report, aligning surplus funds with existing priorities allows the county to advance projects and mitigate risk without increasing ongoing tax or spending commitments.