By Joan F. Simoneau, Community Reporter
Marlborough – Mayor Arthur Vigeant congratulated the city’s finance team for work that led to the Mass. Department of Revenue (DOR) certification of more than $6.7 million in available funds, generally referred to as “free cash”. Last year’s available funds were $6.1 million.
In a communication to the City Council at the council’s Nov. 2 meeting, the mayor said: “The city of Marlborough’s financial strength and success has and continues to be a true team effort. We are fortunate to have a strong team in City Auditor Diane Smith and Comptroller Brian Doheny.”
Vigeant also said he was proud of how all have worked closely with the City Council “to practice prudent financial management over the past four years.”
The amount of “free cash” is based on the balance sheet as of June 30. It is a term used to describe the amount a community has available at the end of a fiscal year, and is a major factor when the city is rated by bond-rating companies such as Moody’s or Standard & Poor’s.
“The better the finances, the higher is a community’s bond rating,” said Finance Committee Chair Michael Ossing. “The higher rating translates into lower interest rates on bonds, saving the community money when it pays off those bonds. The city’s current rating is AA.”
The city also has a near $22 million unused levy capacity, the amount available before an override is needed. To top off this financial condition, Marlborough also has about $7.2 million in a stabilization fund. The combined total is about 30 percent of the current annual budget which is about $137 million.
According to the DOR, the attention of credit rating agencies generally focuses on free cash and other financial benchmarks, which paint a picture of sound financial health for a community.