OXFORD – A fund-balance policy was adopted by selectmen to ensure that the town’s budget surplus at the end of each fiscal year is sufficient to meet its spending needs, provide for any budget shortfalls, and help hold the line on tax rates.
At the recommendation of town auditors, selectmen voted 4-0 to adopt the policy at their regular meeting Thursday. Board Chairman Floyd Thayer was not present at the meeting.
The town’s fund balance comprises reserved and unreserved funds. The unreserved portion is further broken down into designated and undesignated funds.
A draft copy of the policy calls for the unreserved balance to be maintained “at reasonable levels at all times to ensure the financial well being of the town of Oxford, to lessen the need for borrowing, to protect the town’s bond rating, and to provide the funds necessary to meet the town’s financial operating working capital.
“A strong fund balance may also allow Oxford to provide for a fallback of its tax rate in times of temporary economic uncertainty,” it said.
Town Manager Michael Chammings said town auditors recommended that the policy be adopted and that it represented a sound fiscal practice for the town. Oxford typically ends its fiscal year with a budget surplus.
The policy establishes that the undesignated fund balance at the end of the fiscal year will be no less than 7 percent and no more than 12 percent of the previous fiscal year’s operating expenditures, less debt service. A balance in excess of 12 percent will be used to increase designated reserves, the town’s appropriated contingency account, or its appropriated capital improvement program fund.
Comments are no longer available on this story