We celebrate a third year of across the board successful financial management of the city of Gloucester as shown by the city’s recently certified free cash from the Massachusetts Department of Revenue (DOR).
With general fund free cash certified at a healthy $4.8 million, our financial performance is a validation of the fiscal policies that have been implemented over the past few years.
The administration’s fiscal policies emphasize accurate and conservative budgeting on revenues; effective oversight of expenditures; strong tax collections; elimination of deficit spending and spending beyond our means; and aggressive pursuit of grant-funding whenever possible. We can never be too prudent for preparing for the future, and strong free cash performance allows us to be protected against future impacts — whether they be from local, state or national circumstances.
This week, I did some digging around the Mass DOR website to see how our free cash performance compares to other communities. Last year, the average free cash as a percentage of the budget for all 351 communities in the Commonwealth was 3.79 percent. For Gloucester last year, our free cash percentage of the budget was 3.13 percent, which is below the state average.
In terms of stabilization funds, the average percentage of the budget for all 351 communities in the Commonwealth was 2.9 percent. For Gloucester, the percentage of our operating budget we have socked away was 1.87 percent last year which is also below the state average.
By both these measures, Gloucester still has work to do despite our relatively strong local performance. Every outside agency that reviews or comments on a municipality’s financial performance looks at free cash and reserve levels as key indicators from our regulatory agency, the DOR, to our bond rating agencies (Moody’s, and Standard and Poor’s). Also, there are standards for performance, and we manage to those standards – not some arbitrary number someone makes up.