The City of Chicopee has received certification from the Commonwealth of Massachusetts that its free cash is $10,663,770 as of July 1, 2017. The amount consists of excess receipts over estimates, excess cherry sheet revenues, prior year budget close outs, overlay closeouts and closeouts from other funds as well as unused prior year free cash.
“The free cash is a welcome account each year as it enables us to address a number of one time or reserve issues for the City,” said Mayor Richard Kos. “I will be asking the Council to reimburse our stabilization account in the amount of $2,000,000 and be establishing a special account for road and sidewalk repairs for calendar 2018 in the amount of $2,600,000.”
The allocation to our stabilization account will return that balance to a workable amount after having been reduced over the past several months by addressing needs when free cash was not available.
The road and sidewalk account is a continuing effort to address deteriorating infrastructure needs. The City of Chicopee receives State funding, Chapter 90 funds, in the annual amount of $1,300,000. This additional appropriation will enable us to triple our commitment to roads and sidewalk improvement and repair in our City this coming construction season.
With the above reductions, the balance of free cash is approximately $5,800,000. This amount will be utilized for snow removal reimbursements, possible tax payer assistance as in past years, as well as every day unforeseen obligations of the City.
“The Mass. Division of Local Services as part of its Best Practices recommendations advises that Municipalities develop Reserves Policies,” said City Auditor Sharyn Riley. “Municipalities with adequate reserves and Stabilization accounts are more likely to be able to weather difficult economic times and reserves can also have a positive impact on a Municipality’s credit rating and may reduce borrowing costs and capital project spending.”
She continued, “Chicopee was fortunate in FY’2017 to receive non-recurring revenues totaling $1.8 million which helped boost the City’s Free Cash number for FY’18. These one-time receipts included a substantial Premium on the Sale of Bonds, Homeless Transportation Reimbursements, Retiree Drug Subsidy Funds, and Ambulance Certified Public Expenditure Reimbursements. Other contributing factors that impacted this year’s Free Cash number were excess Cherry Sheet Revenues of over $500,000, unexpended Overlay Surplus in the amount of $745,000, and Grant reimbursement closeouts including Chapter 90 funds of almost $3,000,000.”
###