AMESBURY — This week Mayor Thatcher Kezer continued to explain how the town ended up with a negative free cash balance during a presentation at the Finance Committee meeting and during his taped "Mayor's Report," which will air tonight and Sunday on cable access.
Earlier this month, figures released by the Department of Revenue showed Amesbury's free cash balance for fiscal year 2008, which ended in June, to be negative $278,698. "Free cash" is the amount of money left in the town's accounts after all revenue is collected and bills are paid.
Amesbury was one of only a handful of towns in the state that ended the year with a negative free cash balance.
Kezer said the good news has been the town was able to control its expenses last year, turning back $149,278 in unexpended funds. The bad news is local receipts ended this year $305,872 under estimates.
"It's important to note Amesbury is not in the red," Kezer said. "This is not debt, and it does not have to be paid back; it's just money we don't have starting the year."
Both Kezer and town Chief Financial Officer Mike Basque described the effects of making sure more money was placed in the town's stabilization and overlay funds as a reason more free cash was not available. "Overlay" is used to pay back property owners whose property is overassessed.
"If we had not put so much in overlay, we would possibly have more free cash money," Basque said.
Both noted lack of permit fees, snow and ice, and the economy as reasons Amesbury came in with less revenue than originally estimated.
At the last Municipal Council meeting, Kezer asked the council to send a plan to cut $125,000 out of the current budget. The bill was moved to finance committee and is expected to be approved next month.
Kezer is also in the process of working with the town's department heads to freeze $500,000 in spending. Kezer noted the money would come in handy should we have a snowy winter and the town exceeds its budget for snow and ice.
When asked whether Kezer felt AmesStat, his computerized projection tool used to track and analyze the town's budget failed him, he said the economy is the key factor to blame.
"AmesStat uses data to make decisions," Kezer said. "The focus of AmesStat is expenditures which we have full control over. Revenue we can't control."
Basque noted the finance department uses its own financial software to do the town's accounting and deals only with the numbers.
"A number think it's all on AmesStat, but we deal with the true numbers," Basque said. "Revenue and taxes set the limit of what we can do, then we cut back as much as we can in an already conservative budget."
Kezer said the lack of free cash will likely not affect the town's bond rating, which rose from an A- rating to an A in August.
According to the state Department of Revenue, as of July 2008 only 27 of 135 towns issued a bond rating by Standard and Poors had a bond rating of A- or lower, which brings the town only slightly above the bottom 20 percent of bond rating rankings in the state according to the DOR.
"They take into account more than just free cash numbers," Basque said. "The economy and total reserves will also be looked at. It's more of an overall look at the town."
The Mayor's Report will air tonight at 7 p.m. on the Amesbury channel 1, as well as Sunday at 9 a.m. and 7 p.m. Times are subject to change.
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