Freeport council to update finance policies

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FREEPORT — The Town Council held a financial policy workshop Tuesday night to discuss potential changes to the investment and reserve policies for taxpayer and town funds.

While the goal of the four-hour workshop was to review the policies to determine their adequacy and discuss staff and council recommendations, the public was given a chance to weigh in.

Resident Marie Gunning challenged the town’s ability to use reserve funds in the stock market. She said according to recent audited financial statements, the town lost more than $350,000 in reserve funds in the market. She questioned the legality of investing that money in high-risk investments. 

“The council is responsible for our money and making sure it is safe,” she said.

Resident Rod Reiger talked to the council and panel about transparency of risk and the size of the reserve fund, and South Freeport resident Michael Reis suggested buying funds with a fixed rate instead of funds that charge fees.

Abbe Yacoben, the town financial director, agreed there are changes to be made to the investment and reserve fund policies.

In the reserve policy, she said benchmarks within the capitol plan for departments with large items have not been adjusted over the years. She said the Fire Department’s equipment reserve fund is too small to buy new equipment, so benchmarks need to be reassessed. In addition to necessary clerical changes, she said items that support infrastructure or bridge work should be added to the reserve fund.

She also recommended a change to the undesignated fund balance policy to reflect two months of the total budget – county, the schools and the town’s general fund. Previously, the town held a balance of one month.

Other recommendations include creating a long-term infrastructure reserve designated for large infrastructure projects and changing fund balance policy language to reflect new government standards.

Within the investment policy, references to the school need to be removed and procedural and other clerical changes should be made, Yacoben said.

The Town Council will hold a second workshop on Tuesday, Dec. 21, at 6 p.m. in Council Chambers to discuss the suggestions and language changes to the policies. There will not be an opportunity for public participation, but councilors encouraged e-mail suggestions prior to the meeting.

To view the financial policies, visit the town’s website.

Amy Anderson can be reached at 781-3661 ext. 110 or aanderson@theforecaster.net

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