A Guide to Financial Management for Town Officials

[kevinb]

http://www.mass.gov/dor/docs/dls/publ/misc/town.pdf

there should be a balanced budget completed by town Manager 2 days ago. JIM did you complete a balanced budget? if not why?. if so Lets see it.

This is found on pages 18&19 in the guide above financial management for town officials.

2.3: WHAT IS FREE CASH? Free cash is the term used for a community’s funds that are available for appropriation. Specifically, free cash is generated when actual revenue collections are in excess of estimates, when expenditures are less than appropriations, or both. Free cash must be certified by the Director of the Bureau of Accounts as of July 1 of each fiscal year upon submission of a community’s balance sheet and cannot be apFor detailed information regarding Proposition 21 ⁄2 see DLS’ Levy Limits: A Primer On Proposition 21 ⁄2. 18 State/Local Fiscal Relations propriated until certified. Once free cash is certified, it is available for appropriation at the annual or any special town meeting. Free cash may be used for any lawful municipal purpose and provides communities with the flexibility to fund additional appropriations after the tax rate has been set. Free cash balances do not necessarily carry over to the next July 1; the Director’s certification expires on June 30 at the end of the fiscal year. Factors that affect free cash are: actual revenues and expenditures versus amounts budgeted as stated above; the amount of collections on property taxes (the less you collect, the less free cash you have); the amount spent in the previous year and deficits in both the general fund and other funds.


My opinion and what the guide states the $500,000 placed back in stabilization is not free cash. it is a debt owed back. there is no free cash to vote yes on the article Monday night. why, because it Has not been certified as free cash. this only happens once a year.

2.9: WHAT IS A STABILIZATION
FUND AND HOW CAN IT
BE SPENT?
Towns may establish one or more stabilization funds (M.G.L. Ch. 40 Sec. 5B) for different purposes. A stabilization fund is a special reserve fund into which monies may be appropriated and reserved for later appropriation
for any lawful municipal purpose. Monies accumulated in a stabilization
fund carry forward from one fiscal year to another. Interest earned from the investment of monies in the stabilization fund remains with that fund. A two-thirds vote of town meeting is required to establish each fund,
appropriate into and from a fund and amend the purpose of a fund. If the voters approve a Proposition 21 ⁄2 override in order to fund appropriations for a particular stabilization fund, a referendum must also be approved
to change that fund’s purpose. Stabilization funds allow a town to save
money for future years or avoid borrowing for capital projects. For example, towns often fund such items as fire trucks or building repairs from these funds. Use of a fund avoids having to incur debt and saves the interest cost of borrowing. Stabilization funds are explained in Informational Guideline
Release (IGR) No. 04-201,

3.1: WHAT ARE THE BASIC ROLES
AND RESPONSIBILITIES OF THE
BOARD OF SELECTMEN?
The selectmen serve as a town’s chief executive body. They have overall responsibility for the general operations of town government. They are usually the major, non-school appointing authority for a town. They are
authorized to enter into contracts on behalf of the municipality. The details of their duties and responsibilities are outlined in a publication by the Massachusetts Municipal Association called the Handbook for
Massachusetts Selectmen. While most other town boards and offices
serve a particular function (e.g., assessors, finance, school, health), the selectmen’s responsibilities are much broader. Their job is often one of sorting out the various positions of different departments and boards
to determine the best overall course of action for the town. Selectmen should play an active and strong role in the financial management of the town. A major role of the selectmen should be to coordinate the roles of all players in the financial management process and to promote a team approach for addressing the fiscal issues of the town. Selectmen should
participate in the budget process, directly reviewing budget requests and having input at all levels of the process. They should provide leadership in the development of a capital improvement program and a risk management
policy (i.e., insurance). Throughout the fiscal year, the selectmen (in conjunction with the finance committee), should monitor the financial performance of the town. Finally, selectmen should assume an active
role in any issue or policy that has broad implications for the financial condition of the town, including such issues as tax classification, free cash policy, use of a stabilization fund, financial reporting and the audit process.