Mayor outlines free‑cash sources and council refers two financial orders to Finance Committee
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Summary
Mayor presented the composition and risks of Northampton’s certified free cash — including recent SOFR interest income and diminishing ARPA funds — and the council voted to refer two financial orders (26.003, 26.004) to the Finance Committee for detailed review.
The Northampton mayor delivered a slide‑backed presentation to the City Council explaining the city’s certified free cash, how it is generated, and the risks of relying on interest income for recurring operating expenses.
The mayor told councilors that free cash comes from unspent prior funds, revenues above projections and departmental underspending, and highlighted two recent influences: high investment interest earned through a secured overnight financing rate (SOFR) account beginning mid‑FY23 and federal ARPA funds that are being spent down. “Free cash is a nonrecurring source,” the mayor said, and cautioned that reliance on interest revenue for recurring costs poses a fiscal risk as rates and balances fluctuate.
Councilors debated reserve policy and the balance between recurring and one‑time spending. Councilor Stratton voiced concern that treating recurring needs as dependent on unpredictable free cash leaves essential services vulnerable; another councilor argued the city’s budgeting has historically shifted cash capital to support schools when required.
On motions, Councilor Robbins moved to refer two financial orders (26.003 and 26.004) to the Finance Committee for further review; that referral passed by roll call at the meeting. Councilors noted finance will have up to 60 days to review and return recommendations to the full council. No final appropriations were adopted at the Jan. 15 session.