BERLIN – Town officials approved a new reserve policy this week.
On Monday, the Berlin Town Council voted unanimously to approve a reserve policy meant to guide the town toward a better financial position. Mayor Zack Tyndall thanked staff for the effort that went into the document.
“There was a lot of work that went in all around,” Tyndall said.
According to a presentation earlier this month from Finance Director Natalie Saleh, the policy was created to set up reserve goals for the town to improve its resilience. 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.
The town’s auditing firm has recommended in recent years that the town set up a reserve policy. A draft proposed last year was deemed unnecessarily detailed by elected officials and has since been reworked.
When presenting the reconfigured document, Saleh stressed the proposed amounts included in it were figures the town could work toward.
“That’s the goal we will try to achieve,” she said earlier this month. “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.”
Saleh said this week the policy was being presented for final approval.
“It’s basically the same,” she said. “We were requested to remove the draft watermark and present it for your approval.”
The council voted unanimously to approve the policy.