Seeking to balance capital purchases with setting funds aside for future needs, Acting Town Manager Michael Gallagher has drafted a plan for the town’s Free Cash.
The town has approximately $3.9 million in Free Cash, comprised of funds not spent in the previous fiscal year’s budget. Gallagher, speaking at last Wednesday’s Town Council meeting, cautioned that this amount is not a common occurrence. Much of the Free Cash comes from police and fire department hires that were not made and a $1.2 million trust fund payout from the Southeastern Massachusetts Health Group. A vote on this proposal will need to be made by Nov. 25, so the town can set its tax rate with the state.
“Projects to be paid for through Free Cash need to be on the recap sheet,” said Gallagher. “If we don’t do this now we cannot spend [Free Cash] after.”
Of the Free Cash, $400,000 will be paid to Other Post-Employment Benefits, while $1.8 million would go to capital purchases. $1.1 million would be transferred to the town’s Stabilization Fund, which is used for unexpected purchases, such as if a school roof were damaged in a storm. $523,000 would be kept for snow and ice removal. In most cases, the $250,000 set aside is insufficient to cover all winter-related spending.
Gallagher said that in the past, small capital purchases—such as police cruisers—were paid for through borrowing, which he said was not the best option. In addition, the budget was sometimes covered in part with the Stabilization Fund, with the hope that the next round of Free Cash could cover it.
“I wouldn’t borrow to buy groceries, I’d borrow for my home,” said Gallagher.
In addition, Gallagher has put forward three bonding authorization requests—$1 million for a new roof for the Community School, $800,000 for a new track at the high school, and $70,000 for new windows at the Richard Memorial Library. The following year, he said the town could borrow for the bleacher replacement at North Attleborough High School, and the concession stand and bathrooms the year after that.
The proposal for the use of Free Cash will go before the Finance Subcommittee for further discussion and vote.
Gallagher’s proposal includes the Retained Earnings from the sewer and water enterprise funds, to be used for new high-definition equipment for North TV, sewer debt service, and improvements to the systems.
Town Councilor Justin Pare questioned whether the money being saved in the Stabilization Fund and for snow removal was the best use, given the other capital needs. Among the requests made by the school department is $1 million for a feasibility study at the high school and replacement of the bleachers, estimated at $2.5 million.
“Is the Stabilization Fund our priority or are there other ones out there,” he said.
Councilor Darius Gregory felt the plan was a conservative approach, which he liked. He asked if there were economic development opportunities that the town could invest in. Councilor John Simmons saw the proposal as forward-thinking and beneficial to the residents.
“We have the opportunity to do the right thing for the town,” said Simmons. “I don’t think we were dealt a bad hand.”