"Free Cash"

An article in the Daily News today http://www.newburyportnews.com/local/x850302290/City-closes-books-1-5M-in-the-black reports the State is close to certifying Free Cash for the City (and the other 350 communities in Massachusetts).

Here's a little supplemental information:

According to the State's definition, “Free Cash” means

Unrestricted funds from operations of the previous fiscal year that are certified by the

Director of Accounts as available for appropriation. Remaining funds include unexpended

free cash from the previous year, receipts in excess of estimates shown on the tax

recapitulation sheet, 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

community's auditor, accountant, or comptroller.

Here are Newburyport’s figures for the end of these Fiscal Years. The dip in Free Cash in 2004 correlates to big drops in Local Aid from the State.

1999 908,551

2000 1,967,083

2001 2,258,675

2002 3,367,274

2003 2,194,161

2004 605,884

2005 642,831

2006 563,035

2007 677,042

2008 842,678

2009 1,281,624

2010 1,153,069

Of the 351 communities at the end of FY2010, 12 communities had negative Free Cash meaning they spent more than they took in….not good.

For FY 2011 Newburyport looks to have $1.5M certified which is an improvement in the raw number. However, our % of Free Cash compared to the overall budget (or roughly $1.5M/$49.1M=3%) will still be slightly less or close to the State average.

So the wild spending spree may need to be put on hold.

You can get all your own gory details at the State website:

http://www.mass.gov/?pageID=dorterminal&L=4&L0=Home&L1=Local+Officials&L2=Municipal+Data+and+Financial+Management&L3=Data+Bank+Reports&sid=Ador&b=terminalcontent&f=dls_mdmstuf_debt&csid=Ador

Ed Cameron