Submitted by Finance Committee Chair Michael Seibert
FinCom Chair Michael Seibert’s dashboard illustrated Bedford’s financial status for residents preparing to vote on the operating budget and other financial articles at Annual Town Meeting.
Reserve is our fund to cover unexpected budget shortfalls. Our policy is 1/2 % of the operating budget. We’re good there.
Stabilization is our long term rainy day fund. We drew it down to the red a couple years ago, and it kept us safe from an override. We’d like to keep it to 2-6% of the overall budget. It’s at 3.5% now. I’d personally be more comfortable if it were closer to the green, and I hope we address it in the fall when we know how our revenue estimates panned out.
Unallocated Free Cash is our hedge against overestimating revenue sources, and our goal for it is 1% is of the budget. We’re good.
OPEB Allocation is the amount we’re squirreling away to cover the retiree healthcare expenses. Our Annual Required Contribution to eliminate the liability would be about $1.4M. We’re making some progress, but we’re still falling behind in comparison to other AAA-rated municipalities, and so our liability is unfortunately still growing.
Unused Levy is the amount of the capacity to tax that we don’t use. We’re only using $335K and leaving $1M of levy growth untaxed, giving ourselves that small tax break, and protecting ourselves from an override.
And lastly, we like to keep Debt Ratio (our payments of principal and interest) between 5 and 10% of the budget. We’re close to the upper limit, but perfectly safe.
Editor’s Note: While a draft of Bedford’s FY15 budget was printed in the Warrant for Annual Town Meeting, the final budget voted during Tuesday’s meeting was distributed to voters attending the meeting. The Finance Committee has kindly shared a 60-page PDF of the final document – Town_Meeting_Budget_Handout_FY15 – that includes the recommended budget and other financial information.