7% Fund Balance is Not Acceptable!

Fund balance represents additional revenue that the town did not necessarily anticipate – higher than expected mortgage or sales tax, traffic tickets, building permits all accumulated over time. The Town strives to maintain the unreserved fund balance in the General Fund within a range of 15-20% of the operating budget.

Prior to taking office, our fund balance was as low as 7.43% at the end of 2012 (8.5% in 2010 & 7.81% in 2011).  The problem was that we were using fund balance for our operating expenses.  Essentially, we were using fund balance to balance our budget.  Our depleted fund balance threatened the Town’s AAA bond rating.   We put an end to that. Click both charts for expanded versions.

Over the past four years, we have reversed that trend by placing an emphasis on conservative budgeting and controlling expenditures.  Our current fund balance is a very healthy 40%!

This will provide the Town with the financial security to meet unexpected burdens in the coming years, as well as the flexibility to fund capital and infrastructure projects with these funds. We also maintained our AAA bond rating which allowed us to secure the lowest possible interest rate for infrastructure and streetscape project.

We’re using our fund balance the way it should be used – to help fund infrastructure projects – not for operating expenses.  That’s the fiscally responsible approach.