October 6, 2011
To: Mallory Aronstein
From: John Duggan
Re: Strategic Planning Meeting 10/01/2011
Goal #4 of the West Bridgewater Strategic Planning Action Plan – 2011
Members attending: John Duggan, Maureen Adams
Duggan lead a discussion on implementing a policy for the Selectmen to vote on regarding the establishment of a Stabilization Fund for the Town. He stated the policies are not cast in stone but if there was a policy in place, it would provide guidance to the town boards and citizens and establish a normal way of dealing with budget issues that don’t rely on the personalities involved.
Duggan also mentioned that the rating agencies for the Town (Moody’s, S&P, etc.) recommend that towns establish policies for reserves and that said reserves should have levels of approximately 5% of the general fund revenues.
The following is a sample policy that the group could recommend for adoption:
“The Town of West Bridgewater will maintain a level of reserves the protect the Town from emergency conditions that require financial flexibility, contribute to sufficient liquidity to pay all Town expenses without short-term borrowing, and contribute to the credit rating that the Town currently holds (Moody’s “A3”, Standard and Poors “A”).
To provide the adequate levels of reserves to protect the Town’s financial condition over the long-term, the Town of West Bridgewater has adopted the following financial reserves policy statement:
The Town will work toward the goal of maintaining in the Stabilization Fund an amount equal to five percent (5%) of the total projected general fund operating revenues for the next previous year”