WINCHENDON – Seven Town Meeting articles totaling over $500,000 may need to wait until next year, due to the town’s free cash not being certified.

At the Dec. 11 Fall Town Meeting, those residents in attendance were told that the free cash had still not been certified,. The Town Meeting was supposed to be held in October, but delayed until November, then again until December in the hopes that the free cash would be available. Speaking after the meeting, Town Manager Bill McKinney explained that both the town accountant and the treasurer have been in their respective positions for a short period of time.

“So, they hadn’t really been through the annual process of closing the books before,” he said. “If you haven’t done it before, you just don’t know what you don’t know.”

McKinney said the two officials are currently getting some assistance from Eric Kisherf, CPA, of Sagamore.

“He works with a lot of communities,” said McKinney.

McKinney added that he has no idea how much the free cash amount is likely to be. Regarding the certification, he said, “It will definitely be January at the earliest because all of their efforts – and our efforts – will be on getting the tax rate set so that we can get the tax bills out before the end of (December). Free cash will come second now. There’s nothing we can do with it without a Town Meeting vote, so there’s no sense in finishing that up before the tax rate.”

While much of Monday’s meeting went as planned, seven articles had to be passed over, due to the free cash not being certified. These included $126,000 for additional staffing at the Fire Department, $35,000 for the Department of Public Works and Fire Department vehicle repair accounts, and $50,000 for the reserve account. There was also an as-yet undetermined sum for the Stabilization Fund that had to be tabled.

Asked if a Special Town Meeting will be needed prior to the Annual Town Meeting in May to address the articles that were passed over, McKinney said, “We don’t know yet. Some of them can certainly be done at the Annual Town Meeting. We’ll have to wait and see, once get the free cash certified, what it looks like, then check with people to see if there’s interest in holding another meeting or if they just want to wait until May.”

Winchendon’s free cash

Finance Committee chair Tom Kane said that free cash is the amount left unspent in the various departmental budgets at the end of the fiscal year—in this case, FY23, which came to a close on June 30 of this year.

“You might have items in the budget that you anticipated spending on,” he continued, “but you didn’t have to spend. Or you might have some revenues the town didn’t anticipate. So, all of that has to go to the state and it has to be reviewed by the state, and they let us know what our certified free cash is.”

Kane said the town generally ends up with about $2 million in free cash each year – money that’s available to the town to use any way it wishes. Whatever amount the town ends up with, he continued, is usually spent on one-time capital expenditures. Free cash can also be used to erase deficits that may be left in some line items at the end of the fiscal year.

“But just because you get $2 million one year doesn’t mean you get $2 million the next year,” he said.

One article on Monday’s warrant called for a transfer of free cash to pay several bills – totaling more than $193,000 – which were incurred during FY23 that remain unpaid. The bulk of that amount was for nearly $188,000 to pay a past-due monthly premium to Massachusetts Interlocal Insurance Association (MIIA).

Finance Committee member Moe Ward moved that, instead of free cash, the money to pay the bills be transferred from the town’s stabilization account.

“I don’t believe that folks can wait when we have money in stabilization,” said Ward. “The stabilization fund is for those unexpected expenses.”

McKinney explained the delinquent FY23 insurance bill was the result of a misunderstanding.

“One of the things we were looking to do (to close out FY23) is pay the snow and ice deficit. So, we looked through all the different accounts to see what was available,” he said. “We looked at the health insurance and saw there was money left and saw that we only made 11 payments for the year. So, I asked and was told all they billed us last year was for 11 payments. Sure enough, that was the case; a payment had been made in June and so we made that transfer request. Unfortunately, we found out a couple of days later that the bill paid in June (2022) was the April insurance bill and the June bill was just being brought forward.”

He explained the MIIA had only billed for 11 months the previous year because of COVID.

“A lot of people weren’t going to the hospital,” said McKenney, “so they gave us one month off on our premiums.”

An initial vote on the amended article failed with 88% in favor, 12% opposed. A nine-tenths majority vote was necessary for passage. Ward immediately made a motion to reconsider, which received majority approval. During subsequent discussion, McKinney, in response to a question, said there was about $1.3 million in the town’s stabilization fund. When the matter was re-voted, the transfer was approved, 92% to 8%.

Greg Vine can be reached at gvineadn@gmail.com.