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State certifies Salem's free cash at $3.25m for fiscal 2012

Posted by Amanda Stonely  November 21, 2011 10:03 AM

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The state Department of Revenue has certified the city’s free cash for fiscal 2012 at $3.25 million, according to city officials. The figure refers to the cash the city had on hand at the close of the preceding fiscal year on June 30 that is available for use this fiscal year.

In a letter to the City Council in which she advised them of the certification, Mayor Kimberley L. Driscoll noted that the city’s free cash account was at one time “next to nothing,” citing its growth as part of an overall improvement in the city’s finances that she said was “due in large part to frugal budgeting practices and professional accounting and fiscal policies.”

Salem’s free cash fell to as low as $538,372 in fiscal 2007. It rose to $1.26 million in fiscal 2010, but then fell to $750,607 in fiscal 2011, according to the Department of Revenue web site.  Driscoll said Salem has built a stabilization fund of $2.5 million, which she said shows the city is “clearly moving in the right direction.”

She said it has also initiated five-year budget forecasting, improved budget procedures, an annual capital improvement program, an annual comprehensive financial report, and fiscal reserve policies. Driscoll asked the council, in keeping with the city’s policy, to place 20 percent of the free cash in the stabilization fund, 20 percent in the capital improvement program fund and 10 percent in a trust fund. The request was set to come before the council this past Thursday, Nov. 17.

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