Town in Strongest Financial Position in Years
Town in Strongest Financial Position in Years
As the Town looks forward to the budget season this spring, it finds itself in the strongest financial position in many years with a significant increase in available unassigned fund balance and an upgraded credit rating.
This marked change in financial position did not happen overnight or by accident; prudent budgeting, active investing, and a renewed focus on fiscal policy all helped move the needle.
For fiscal year 2024, revenues from vehicle registration, intergovernmental revenues and investment income exceeded the forecast by over $2 million. On the spending side, expenditures came in $4.5 million dollars lower than budgeted in the areas of education, capital improvements, and public works.
In addition to this positive budget performance, the Town Council also identified financial goals that included maintaining an optimal credit rating. In late 2024, the Town Council amended the Financial and Fiscal Policy to raise the minimum fund balance to 10% of the prior year’s budgeted operating expenses. Unassigned fund balance is the amount of the budget left unallocated toward specific expenditures in the year ahead. A January workshop with the Town’s municipal auditor informed that at the end of the last fiscal year, the Town’s unassigned fund balance increased to $15,902,211. This is up almost $5 million from 2022, and 14.46% of the prior year’s budgeted operating expenses. The Town has a goal to get this to exceed 16.67%.
This increase in unassigned fund balance was the single most significant reason for the Town’s recent Moody’s credit rating increase from Aa3 to Aa2. The Town also received high marks for governance (G-1). The credit opinion provided by Moody’s stated “the town has a favorable institutional structure and provides strong transparency and disclosure. The town also consistently approves and releases its budgets and audited financial statements in a timely manner. The Town’s strong budget management and policy credibility and effectiveness are reflected in its health financial position and trend of balanced operations”.
This strong financial position that the Town has set itself up with is important for the community. It builds trust and confidence in our local government as we plan the budget each year and bring capital projects to referendum. Increasing our unassigned fund balance and lowering the amount of debt held is also crucial for bond ratings, leading to further cost savings on future investments.
The positive outcomes of the latest financial audit are to the credit of Town staff and the intentional goals made by the Town Council. Thanks to the efforts of our Finance department, the most recent audit was completed on November 26, 2024—the earliest completion date in nearly two decades.
Over the next six weeks, Town staff will be working towards completing a budget which will be presented to the Town Council on March 26. During the month of April, the Town Council’s finance committee will be reviewing the municipal and school budgets before approving the budget in early May.
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