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FranklinMA Fiscalpolicies

The document outlines several fiscal policies for a town government, including maintaining a balanced budget that funds annual costs with current revenues. It discusses budgeting for compensation, estimating revenues, maintaining adequate financial reserves, and using long-term debt cautiously for large capital projects. The document also addresses maintaining a six-year capital improvement plan, using hotel/motel tax revenue for open space and recreation, and ensuring special revenue accounts for water, sewer, and trash are self-funded through fees.

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Steve Sherlock
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274 views2 pages

FranklinMA Fiscalpolicies

The document outlines several fiscal policies for a town government, including maintaining a balanced budget that funds annual costs with current revenues. It discusses budgeting for compensation, estimating revenues, maintaining adequate financial reserves, and using long-term debt cautiously for large capital projects. The document also addresses maintaining a six-year capital improvement plan, using hotel/motel tax revenue for open space and recreation, and ensuring special revenue accounts for water, sewer, and trash are self-funded through fees.

Uploaded by

Steve Sherlock
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Fiscal Policies

1. Balanced Budget
 Annual costs funded from current revenues.
 Do not defer current costs to future years.

2. Compensation and benefits


 Budget with current revenues
 Compensate in accordance with Section 25 of the Town By-laws.

3. Revenues
 Estimate annual revenues in detail and project for the following three years.
 Maintain full and fair market value of property assessments.
 Assure fees charged cover costs incurred.

4. Financial Reserves –
 Adequately fund and maintain reserves (Stabilization, Free Cash, Overlay
Surplus)
 A minimum Stabilization account of $5,000,000 or 5% of recurring general fund
revenue (less debt exclusions and SBA reimbursement).
 Short-term revenue surpluses shall fund non-recurring projects.
 Free Cash will be used to fund the capital budget and for unforeseen expenses.
 Overlay surplus will be used for capital budgets or non-reoccurring expenses

5. Long Term Debt - Proposed


 Reserved for large capital projects.
 Net general fund debt service (non debt excluded or funded from special
revenue) shall be between minimum 3.5% of recurring general fund revenue.

6. Capital Improvement Program.


 A six-year plan updated annually shall be maintained.
 Budget operating costs associated with CIP projects.
 Delaying maintenance on existing assets results in higher costs in future years.
 Postponing improvements to buildings/infrastructure results in higher costs.
 Free Cash, Overlay Surplus, and short-term revenues shall be used for the
reoccurring capital items and smaller one time purchases or projects.
 Bonds will be used for large capital projects.

7. Hotel /Motel Tax

The Town receives a 6% room tax from each hotel room rented. The amount of
funds collected each year is directly related to the number of rooms rented.
Generally the Town receives approximately $425,000 per year in hotel tax
revenue.
The Town filed special legislation that was approved, to earmark all of the
revenue from this source to be used for the purchase of open space and recreation
land or the construction of recreation facilities. The Town Council may choose to
borrow funds and use the receipts to pay for the debt or pay cash for smaller
purchases or construction projects. These funds can be deposited into the open
space fund, be used for one-time non-recurring expenses, or for any other
purposes as the Town Council deems appropriate.

8. Special Revenue Accounts

The water, sewer, and trash budgets are supported entirely by fees. This means
that any changes to these budgets do not affect the general fund budget. If there
are any excess funds at the end of the fiscal year, they are automatically closed to
their respective account’s fund balance.

Other Fiscal Policies


Fraud Policy
Investment Policy
Purchase Order Policy

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