By Kevin Rudden Staff Reporter/Columnist
Milford has just under $11 million in free cash – a municipal accounting term for unspent funds from Fiscal Year 2021’s budget and revenues coming in higher than forecast.
Finance Director Zachary Taylor told the Finance Committee on September 8 that the amount is “by far the largest free cash number in Milford’s history.” By contrast, just under $5 million was certified by the state Department of Revenue after Fiscal Year 2020 closed, Taylor said.
He outlined how the town’s conservative approach, when formulating the Fiscal Year 2021 budget at the onset of the COVID-19 pandemic, directly led to the free cash amount being larger than usual:
- The town used a conservative figure for state aid, which – when the state budget was finalized months later – proved to be $3.5 million higher than expected.
- The town lowered its estimates for local receipts, but building permits still brought in $507,000; room occupancy taxes brought in $80,000; motor vehicle excise taxes brought in $666,000; and, tax collection interest and penalties brought in $320,000.
- The one-time auction of four properties the town owned through tax title foreclosures brought in $1.8 million.
- Budgeted funds that were not spent totaled $2.8 million, with about that amount due to savings in employee health insurance premiums.
People often ask why the town has budget surpluses year after year, noted Committee Chair Alberto Correia, who then said 97 percent of the Fiscal Year 2021 budget was spent. “I’d rather have a little bit extra,” he said. “It’s significant, but not outrageous. It means we hit the budget with 97 percent accuracy.”
Correia later added that he’d prefer having the free cash amount “than being $5 million short.”
Committee member Brant Hornberger cautioned, as much free cash as possible should be put in the Stabilization Fund – the town’s long-term savings account –because the town is looking at upgrading or replacing Milford High School sometime over the next decade.
Correia said the $5 million needed to renovate the Fino Field swimming pool could be funded out of free cash, as well as up to $3 million in capital spending. That would leave $3 million for the Stabilization Fund, he said.
Taylor noted that – after taking into account money in this year’s budget already earmarked for capital items and for being put in the Stabilization Fund – about $1.5 million in free cash would be left after the October 25 Special Town Meeting.
Noting the warrant for next month’s Special Town Meeting should be finalized by mid-month, Correia scheduled Finance Committee meetings on September 29 and 30 to review the warrant articles.