Aldermen Approve 'Free Cash' Appropriation

On June 17, 2019, the Board of Aldermen approved an appropriation of over $2.3 million from “Available Free Cash” to various accounts, throughout the city. We talked about the appropriate use of Free Cash during the override campaign. Now, we are pleased to be able to allocate the entire $2.3 million to projects throughout the city, many of which have an immediate and noticeable benefit to residents. 

It is important to note that we typically see “available free cash” each year. As a reminder, Available Free Cash is the surplus from previous fiscal years. Once all expected revenues have been received and all bills have been paid for the fiscal year, we send a final budget report to the state, and the Department of Revenue certifies the remaining money as free cash. The money then becomes available for the city to use. It is one-time money, so the best use of it is for one-time projects.

There are many reasons why we have free cash. The city budget, approved annually by the Board of Aldermen each year, is a good-faith estimate of revenues and expenses. We are conservative in our estimates, because we don’t want to put the city at risk of running short, but there are other factors in play as well. If the economy is strong, we will see extra revenue from new development from both taxes and permit fees. If a senior employee leaves and is replaced by someone at a lower salary, or if we have less snow than we budgeted for, or for any other reason we don’t spend the full amount allotted in the budget, that money goes to free cash. When you add it all up, free cash can be anywhere from zero (or even negative) to a healthy, positive amount. The Massachusetts Department of Revenue recommends that communities try to have a free cash balance of 3-5% of their budget, and Melrose has met that target.

In this order, I asked the Board of Aldermen to approve a free cash appropriation of $2,327,694, which covers a wide range of city and school department needs, including pedestrian safety measures; vehicles for public safety and DPW; critical, required upgrades in technology; paying off this year’s snow and ice deficit; and funding our stabilization accounts. 

Specifically, the breakdown is as follows:

For pedestrian safety, funds are included for traffic calming measures and new crosswalks: 

• Install rectangular rapid flashing beacon signals on Franklin at Vinton, on Upham at Ashcroft, and on Main at Linden Street. The signals are similar to those recently installed on Howard Street at Ruggles and are aimed at assisting pedestrians crossing these major roads ($82,500)
• Make significant patch repairs to areas of Upham Street that are deteriorating ($65,000)
• Repair and add accessible handicap ramps along Upham Street; on Howard Street east of Ruggles; and on Lebanon near Appleton and Beech ($68,000)
• Reconstruct the intersection of Cottage and West Foster streets for traffic calming purposes and to assist pedestrians trying to cross West Foster Street from the Levi Gould and Council on Aging ($30,000)
• Address sidewalk gaps on the west side of Mt. Vernon Avenue between Rockview and Sylvan Street in order to create a continuous walking path from Sylvan Street into this neighborhood ($34,600)
• Purchase and install two additional 25 MPH solar powered radar devices ($24,000)
• Purchase and install a flashing crosswalk sign for Wyoming Avenue at the Lincoln School ($8,500)

Another $50,000 has been allocated to continue to address sidewalk safety repair requests. 

In addition, this order funds needed playground improvements and funding for tree plantings throughout the city:

• Make repairs, renovations and upgrades to Livermore Park on Felton Place off Upham Street ($62,500)
• Purchase and install 80 trees citywide from the existing list of resident requests ($50,000)

We will enhance security throughout the Melrose Public Schools and Melrose Public Library by allowing the Melrose Police Department to fund electronic mapping of the facilities:

• Funding the “Be Safe” Program ($5,600)

Following an extensive review of our city’s vehicles, we have prioritized public safety and DPW vehicles that need to be updated:

• Two new police cruisers ($118,850)
• Replacing four DPW vehicles and two mowers ($473,000)
• Appropriation to Capital Stabilization Fund ($250,000) for down payment on a new fire engine (pumper).

This investment in the city’s vehicles completes the Police Chief’s request for cruisers for this year, allows the Fire Chief to start the lengthy procurement process for a  new pumper, and upgrades the six pieces of DPW equipment most in need of it.  

Two items in the order address technology needs for items that are instrumental to our daily city operations:

• Required upgrade to the City’s MUNIS accounting software ($80,000)
• Replacement of the City’s unreliable and antiquated telephone system throughout municipal buildings ($100,000)

After a relatively mild season, this order balances our snow and ice costs for this past winter:

• Snow and ice deficit ($205,144)

The remainder of the available funds will be allocated to fund our stabilization accounts and address higher than anticipated costs:

• Police overtime ($50,000)
• Funding for the Contract Stabilization Fund ($365,000)
• Funding for the Special Education Reserve Fund ($155,000)
• Suits and Claims Stabilization Fund ($50,000)

The funding for the Suits and Claims Stabilization Fund is in anticipation of outside professional and legal services needed in relation to the City’s strong opposition of the proposed 40B development off Swains Pond Avenue. The Special Education Reserve Fund provides a buffer against unusually high special education costs, as these often fluctuate unpredictably.

These investments represent an appropriate use of Available Free Cash funds and will allow us to continue to provide high quality services to Melrose residents.