Monday, July 10, 2017

Lisbon Maine's Road To Bankruptcy - Part 4

Lisbon's Emergency Fund: 

Lisbon's unassigned account is the account that shows us how much money we have that isn't earmarked for a budget item..  I think of it as our EMERGENCY FUND.

The GFOA (government finance officers association) recommends that governments maintain an unassigned fund balance of no less than 16.67% of general fund operating expenditures. Our own charter recommends we keep 16% or approximately 2 months of operating costs in this account.  

Use of this account  to address budget shortfalls (IMHO) often indicates serious financial conditions :

  •  Declining non tax revenues 
  •  Out of control spending. 
  •   It is often an indicator of coming property tax hikes

This account can be compared to the proverbial canary in the coal mine. Frivolous use of this account sends a strong message to prospective businesses that may otherwise want to invest in Lisbon.

Call your Councilors and tell them you want real tax relief not fake short term fixes that just kick the can down the road.

Tell them to keep their fingers out of our EMERGENCY FUND.

Joe Hill

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