10/12/2023 FINANCE COMMITTEE Minutes

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3 Mashpee Finance Committee-Select Board Minutes October 12, 2023 NEW BUSINESS Discussion mand mPossible_Al raygl ofwFundiM Options for Articleµ 1_of the October 16, 2023 Annual µTown Meeting;Warrant:µ(continued) Free Cash is also used to fund the Snow&Ice Account which is currently estimated at$250,000 and the Capital Stabilization Fund Appropriation; $2,295,369 funded at the May 2024 Special Town Meeting. Additional Free Cash intended to be used at the May 2024 (FY25)Annual Town Meeting represents a$3,500,000 projection. The sum of$2,500,000 would fund the Town's Operating Budget. An additional $1,000,000 is earmarked to fund Accrued Benefits,OPEB funding,the Injured-on Duty Fund and the Opioid Settlement funds to Human Services. After the May Annual Town Meeting (FY25) it is projected,the Free Cash would amount to $1,737,094 with the absence of the FY 2025 Capital Budget which has not been finalized to date. Discussion followed with respect to the use of Revenue Available for Appropriation. As per Free Cash Policy No. 73,the Town of Mashpee will strive to maintain its annual certified Unappropriated Cash Available in the range of 5-10% of the annual operating budget to avoid depleting those funds in any fiscal year and to ensure the succeeding year's calculation begins with a positive balance. The 5%minimum to be reserved as per policy is $3,750,000. The balance of the FY24 Free Cash after reserving per policy would result in a balance of$2,012,906 if the$7,500,000 is fully used to fund Phase II and a portion of Phase I of the Wastewater Design/Engineering. Town Manager Rodney C. Collins indicated the $15,302,463 Certified in FY 2024 as Free Cash is approximately $2,000,000 over last year. Town Manager Collins indicated that initially he was inclined to appropriate $7,500,000 utilizing Free Cash to fund the Phase II Wastewater project. After consulting the Finance Team there is concern the policies established by the Select Board would be violated. As per policy the Select Board must ensure there is funding to avoid depleted balances. This action may also place the Town at risk in its Triple Bond Rating with Standard&Poor. There are also unknowns with respect to operational requests and capital needs that have not yet been identified and prioritized in detail. As per Policy No. 072, 15% of Certified Free Cash is appropriated into the Capital Stabilization Fund($2,295,369)to be used for future capital assumptions in the Capital Improvement Program.