AUBURN, Mass. – The Auburn Board of Selectmen voted at Monday’s meeting to adopt financial management policies that “establish a framework that will ensure future financial stability for the town,” according to town officials.
The financial policies were proposed by the town administration and approved in November by the town’s Finance Committee. The policies will be used in making decisions on the budget, the fund balance, capital improvement planning, debt management and unfunded liabilities.
The policies will also show the credit rating agencies and prospective investors Auburn’s commitment to sound financial management and fiscal integrity, said Chief Financial Officer Edward Kazanovicz.
“This will ensure financial stability for the Town of Auburn, not only in the short term but in the long term as well,” Kazanovicz said. “It will maintain our credit worthiness, and the town will hopefully get an upgrade as a result of having these policies in place.”
Some of the highlights of the financial policies include:
- The town will not fund operating expenses with nonrecurring sources of revenue, such as free cash or overlay surplus. The town currently uses a portion of free cash and overlay surplus for the general fund, but the town intends to stop doing that over the next three years.
- Operating expenses shall be supported by recurring revenue sources, including taxes, state aid, local receipts, available funds and fees.
- The annual operating budget shall include an appropriation to the operating reserve account. This account shall be used to fund any unforeseen and extraordinary expenses that may occur during the year.
“These policies are another tool to allow them [the town administration] go forward and continue to benefit the town,” Selectman Kenneth Holstrom said as he made a motion to approve the policies.
Town administration officials recommended that the Board of Selectmen and the Finance Committee review these financial policies annually.