Proposed Amendment to current policy 2-1.4 (d.). Submitted by Selectman Askenburg on 1/27/2014.

Current policy: d. Free Cash in excess of the goal reserve amount should be used for non-recurring emergency expenditures or appropriated to a Stabilization Fund for future capital projects and equipment purchases or used to provide property tax relief.

Proposed policy: 2-1.4 General Fund d. Free Cash (definition): 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, 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 Department of Revenue. Annually, after Free Cash Certification: First Priority  Property Tax Relief: At least 50% of the certified free cash will be used to provide property tax relief.

Other Uses After Providing Property Tax Relief     Stabilization Fund: Free cash is to be used to fund or replenish the Stabilization Fund; Emergencies: Free cash is to be used for non-recurring emergency expenditures; Capital Projects: Free cash is to be used to fund capital projects that would otherwise incur borrowing costs associated with the issuance of debt. Special Use: To augment the trust funds related to unfunded liabilities, such as OPEB (Other Post Employment Benefits).

Exceptions Exceptions to this policy shall be made only under extraordinary circumstances and any such exceptions shall be explained to the citizens of the Town of Chelmsford in a statement written by the Board of Selectmen in the warrant for Annual or Special Town Meeting.

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