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Finance director: revenues trending slightly favorable; board to review investment policy
Summary
Town finance staff told the Board of Finance that May results point to a likely small positive budget variance of about 1–2% of expenditures and that staff will start audit work in July; members requested review of the town's investment policy and discussion of investing excess cash in U.S. Treasuries.
Town finance director Tom DiStasio presented the monthly financial summary and said the town's overall revenue activity is "trending towards a favorable budget to actual variance," estimating a likely positive variance in the range of about one to two percent of overall expenditures as fiscal year-end approaches. He told the board preliminary audit work is scheduled to start in early July.
Board member Kathleen Johnson asked why the cash balance is higher than prior years and whether excess funds could be invested, specifically citing U.S. Treasuries as an option she believed state statute permits. DiStasio recommended first reviewing the town's investment policy against state statutes to determine authorized investments and whether policy updates are needed before any change in practice. He also explained that a spike in May debt service is tied to scheduled principal payments from last year's bond issuances and that principal amounts can be one-time annual payments ("the principal payment for these bonds is a one-time annual amount in the range of over $500,000 just in principle").
Members asked staff to place a discussion of possible investment of excess cash on a future agenda and to share the town's investment policy for review. The board did not change policy at the June 22 meeting; members directed staff to evaluate statutory constraints and return with options.
