The Town sets aside money in a variety of funds to manage cash flow and plan for large, infrequent expenses (e.g. facility construction, apparatus acquisition, emergencies, etc.). Some funds are unspent budgetary funds that are transferred to build up reserves for future operating needs.
The Town currently maintains the following reserve funds:
- Free Cash - Remaining, unrestricted funds from operations of the previous fiscal year including unexpended
free cash from the previous year, actual receipts in excess of revenue estimates shown on the tax recapitulation
sheet, and unspent amounts in budget line-items. Unpaid property taxes and certain deficits reduce the amount that
can be certified as free cash. The calculation of free cash is based on the balance sheet as of June 30, which is
submitted by the Town Accountant. Important: free cash is not available for appropriation until certified by the Director of Accounts.
- General Stabilization Fund - A fund designed to accumulate amounts for capital and other future spending purposes, although it may be
appropriated for any lawful purpose (MGL Ch. 40 Section 5B). Communities may establish one or more stabilization funds for different purposes and
may appropriate into them in any year an amount not to exceed ten percent of the prior year's tax levy. The total of all stabilization fund
balances shall not exceed ten percent of the community's equalized value, and any interest shall be added to and become a part of the funds.
A two-thirds vote of town meeting is required to establish, amend the purpose of, or appropriate money into or from the
stabilization fund.
- Capital Stabilization Fund - Similar to the General Stabilization Fund, established to serve as a reserve resource for the community to plan
for and use for expenses in future year's capital expenses. A majority vote is required to appropriate money into and from the capital stabilization fund.
- OPEB Fund - The Town established in FY 2016 an OPEB Fund, which is a trust fund established by a governmental unit for the deposit of appropriations, gifts,
grants and other funds for the benefit of retired employees and their dependents; payment of required
contributions by the Town for the group health insurance benefits provided to town employees
and their dependents after retirement; and reduction and elimination of the unfunded liability of the
Town for those benefits. The OPEB Fund is an expendable trust fund, subject to
appropriation, that is managed by the Town Treasurer as trustee. The assets of the trust are held solely to
meet the current and future liabilities of the governmental unit for group health insurance benefits for
retirees and their dependents.