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Avon council adopts policy setting General Fund unassigned reserve target at 15%
Summary
The Town Council unanimously adopted Town Council Policy No. 26 to formalize an Unassigned Fund Balance target of 15% after the Town Manager reported FY2023 balance at 14.56% and projected FY2024 to reach 15%; Council also scheduled a budget work session for Feb. 10.
The Avon Town Council voted unanimously Feb. 1 to adopt Town Council Policy No. 26, which formalizes a target of 15% for the General Fund Unassigned Fund Balance.
Brandon Robertson, the Town Manager, told the Council that the Unassigned Fund Balance—“like the Town’s General Fund savings account”—was 14.56% at the end of fiscal year 2023 and that fiscal year 2024 projections should bring the balance to the 15% target. "Rating agencies look at it closely," he said, adding the policy helps maintain short-term financing flexibility.
Councilors discussed tradeoffs. Robertson acknowledged that raising the target reduces short-term flexibility for appropriations but said any temporary dip below the target during an emergency would be explained to rating agencies with a plan to replenish reserves. He also said bonding might be considered for large projects depending on interest rates.
The Town Manager reminded the Council that a Budget Work Session is scheduled for Saturday, Feb. 10, at 8:00 a.m., with department heads from Police, Fire, Library and Public Works expected to attend. He said current requests would require a projected 3.74% tax increase if all spending requests were funded; he also cited an approximate 20% increase in the Grand List that offsets pressure on the mill rate.
On a motion by Mrs. Bratton, seconded by Mr. Polhamus, the Council adopted the policy as presented. All five members voted in favor.
