Sutton Bond rating remains AA-okay
BY TOM REILLY
Town Administrator Jim Smith told the board of selectmen at their Feb. 5 meeting that the town’s bond rating remains stable at AA.
The announcement comes after a ratings call with Standard and Poors regarding bonding out the remaining $5 million of the school project, which he said went well.
Smith said he was asking selectmen to review three of the town’s financial policies—the stabilization fund, free cash, and the debt management fund policies. He felt that it was wise to bring them before the board every few years, noting that neither selectmen David Hall nor Ken Stuart was on the board the last time this was done. He suggested waiting for selectmen John Hebert and Rick Hersom, absent from the meeting, before reviewing them publicly, but added he felt that having these written policies had been very helpful in dealing with agencies like Standard and Poors.
He said the town is trying to develop a stable financial system and wanted to use the free cash wisely. Smith said it should not be spent within the budget but used as one-time revenue for things like capital improvement and stabilization funds. He said one of the things he has tried to adhere to is to keep 8 percent of the general fund balance in the stabilization fund. On a $27.5 million budget, that would mean about $2.2 million in the stabilization fund, currently at about $1.85 million, meaning it was a little under goal, but he had a strategy to get it back up. He eventually hoped to use the interest on the stabilization fund to help keep the fund at 8 percent.
Town Accountant Tim Harrison said he hoped the stabilization fund could be kept up using its interest or perhaps that the interest might even be able to fund the annual list of capital improvements.
Stuart said from a business standpoint, it made sense to keep up the stabilization fund and free cash because they were two great things to maintain. He said he was pleased that the town had resisted the urge to tap into those things in hard times. Instead, the town had that money to go forward. Hall said he knew Smith has always wanted to eliminate free cash as a general funding source, which is easier said than done.