BERLIN – Elected officials in Berlin are expected to consider adopting a reserve policy later this month.
On Monday, the Berlin Town Council discussed a reserve policy drafted by town staff. They’re expected to review a final version of the policy at their next meeting.
“It is a guide,” Town Administrator Jeff Fleetwood said. “It’s not edict. It’s not law. It’s framework to get to what we think makes good sense.”
The town’s auditing firm has recommended Berlin implement a reserve policy for the past several years. Though a draft policy was presented to the council last year, Fleetwood said there was concern expressed because it was too wordy. Staff in the months since have tweaked the proposed policy.
“What you’re looking at tonight is fairly straightforward,” he said.
Finance Director Natalie Saleh said the policy was meant to set up reserve goals for the town.
“I think we need it to improve the resilience of the town,” she said. “We need to have this to mitigate revenue shortfall and ensure that we can continue service in case of emergency.”
The policy, which addresses the town’s restricted, committed, assigned and unassigned funds, calls for a stabilization reserve fund of 20% of the town’s general fund operating budget, which at this point would be roughly $1.1 million. The policy calls for the town to maintain a health insurance fund balance of 40% of the average of the last three years’ premiums as well as a disaster recovery fund of $250,000 and a capital reserve of $100,000. The policy also calls for the town to keep a debt service balance equal to one year of general fund debt service.
Saleh stressed the proposed amounts were figures the town could work toward.
“That’s the goal we will try to achieve,” she said. “Once they’re achieved and in place, it’s a good foundation not to rely on tax increase, not to rely on cutting capital projects.”
Mayor Zack Tyndall offered similar comments.
“This policy and the goals set out within it are not designed to be prescriptive, they’re not designed to have an answer for every issue, but it’s designed to help us be able to buy time to react to whatever’s taking place,” he said.
The council is expected to be presented with a final draft of the policy at the March 22 meeting.
