urn:schemas-microsoft-com:office:smarttags013fLincoln Finance Committee
November 2, 2006 Meeting
Present: P. Giese, S. Haber, M. Hartman (vice-chair), J. PersonNameKoenig, P. Phillipps, J. Robinson, R. Steinbrook (chair)
Not present: none
Minutes submitted by: R. Steinbrook
The meeting was called to order at 7:30 pm in the Board of Selectman's office at Lincoln Town Hall.
The minutes of the meeting of 10-12-06 were approved.
The meeting scheduled for 11-16-06 will be cancelled. The date of the meeting originally scheduled for 12-14-06 was changed to 12-19-06.
There was a discussion of the Special Town Meeting and State of the Town Meeting on 11-4-06. With regard to Mall Redevelopment and the New England Deaconess Proposal for a Senior Care Community, the Finance Committee is generally supportive but does not plan specific comments unless questions arise during the course of the discussion.
The recent ATFC meeting was briefly discussed.
A revised version of the Emergency Reserves policy was discussed. The primary purpose is to clarify the wording of the existing policy. A revised version was agreed to unanimously, and is included with these minutes.
Pat Phillips reported on the activities of the Capital Planning Committee. Their presentation at the Joint Budget Workshop was discussed.
The chair will contact the Water Board and ask them to make a presentation at the Joint Budget Workshop.
The chair will contact the Sudbury Finance Committee about scheduling the annual joint meeting in Sudbury one year and in Lincoln the next. The chair will also look into the logistics of broadcasting the meeting on cable television in both towns, regardless of whether it is held in Lincoln or Sudbury.
The meeting was adjourned at 9:30 pm.
Emergency Reserves Policy
(Adopted 12/17/2003 Revised 11/2/2006)
The Town of Lincoln has funds set aside for unanticipated and emergency situations that may arise in the course of the Fiscal Year. These funds are:
--The Reserve Fund
--A Stabilization Fund, if such a fund has been established
--Unspent certified Free Cash from the prior Fiscal Year
The Reserve Fund is part of the General Fund, and is intended to cover extraordinary and unforeseen needs of the Town, the Lincoln Public Schools, and independent Boards. The Town has decided to hold all contingency funds for all budgeting agencies in this Reserve Fund. The exception is the Lincoln-Sudbury Regional High School, which has its own contingency fund. A majority vote of the Finance Committee is required to transfer money from the Reserve Fund to the appropriate budget line item of the requesting committee or board.
A Stabilization Fund is not part of the General Fund. It is a separate fund that may be appropriated for any municipal purpose, such as to level out peaks and valleys in the tax bills. A Stabilization Fund is usually established for a specific purpose. A two-thirds vote at Town Meeting is required to appropriate monies too and from a Stabilization Fund.
In October, the Commonwealth of Massachusetts certifies the Town's Free Cash balance. Free Cash can only be spent by a majority vote at Town Meeting.
Prudent budgeting requires that the Town maintain adequate financial reserves. The Finance Committee will set aside an amount equal to 3 to 5 percent of the prior year's General Fund budget as Emergency Reserves. The Emergency Reserves are defined as the total of no more than half of the Reserve Fund, a Stabilization Fund, if one has been established, and unspent certified Free Cash. It is desirable that the Finance Committee set aside the 3 percent minimum entirely from unspent certified Free Cash.
If the Emergency Reserves drop below the 3 percent minimum, the Finance Committee should strive to fully replenish them within two years.
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