No Such Thing As Free Cash

Earlier this month Belmont received certification from the state of Belmont’s available “Free Cash” to the tidy sum of $15.7 million.  The term “Free Cash” is misleading. This money is Belmont-funded, not a gift from the state.  Belmont’s free cash represents remaining, unrestricted funds from operations in our previous fiscal year.  The state has now released these funds to Belmont, hence “freeing” them for use.

This sounds like good news, and it is.  This news is also in sharp contrast to the dire predictions sounded by our town and school officials just five months ago if the override failed to pass. These predictions included no ambulances for stricken elderly; unplowed streets; a shuttered library and a crippled school system.

As we know, the $6.4 million override failed, defeated in April by 56% of the Belmont voters.  Those voters were right – that override was not needed.

This $15.7 million free cash amount is more than double the free cash projection included in the most recent budgets prepared by the town administrator and town officials.  How could they be so wrong?

In a letter this week to Belmont Town Meeting Members, the town administrator had the temerity to state that this unexpectedly large free cash sum was due to the town’s “conservative budgeting practices.”  If this were the case, that there was careful, responsible oversight in spending, why was there such a “miss” in the free cash estimated in the post-override budget?   In July 2021, a mere two months ago, the revised estimate for Free Cash was budgeted at $7.2 million, less than half of the now certified amount.   That’s a wild miss.

A more honest message to Town Meeting Members would have been an admission by town officials that they were clueless until dissecting the $15.7 million after certification by the state.  Readers may recall that the 2020 override proposal of $12 million was withdrawn after Belmont received news of certified free cash of over $11 million – also an apparent surprise.   This pattern does not inspire confidence in Belmont’s budget control and accuracy.

 A more skeptical suggestion is that the town officials routinely deliberately under-estimate free cash to paint an apocalyptic picture of Belmont with a failed override. In non-override years, under-estimating free cash may persuade Town Meeting to pass a budget with a comfortable cushion for unnecessary spending.   

Whether intentional understatement or sloppy budget oversight, something must change.  Town and school officials must adopt fiscal discipline as well as transparent and more frequent reporting, including comparisons of quarter-to-quarter and year-to-year budget and expenditures.   Until we see that change, we will continue to challenge any future “ask” for an override or a debt exclusion.

This commentary appeared in the September 16 issue of the Belmont Citizen Herald.