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City revels in free cash - Leominster has $6M available
Matthew Bruun, Worcester Telegram & Gazette, November 10, 2006

LEOMINSTER - The city has almost $6 million in certified free cash, clearing the way for Mayor Dean J. Mazzarella's plan to pay off a cost overrun for the public library building project. The mayor also plans to ask the City Council to approve using the money for millions of dollars in capital expenses.

City Councilor Dennis A. Rosa, who heads the council Finance Committee, said he anticipated a higher than normal figure for free cash after reviewing the city's balance sheets.The Web site for the state Department of Revenue's Division of Local Services lists certified free cash for Leominster at $5,943,576 for fiscal 2007, which started July 1. It's one of the highest free cash figures in the state and the highest in the region.

Fitchburg, by comparison, has certified free cash of $333,440, while Worcester has $2,101,529, according to the Web site.

"It takes discipline by all and it's a team effort," Mr. Mazzarella said last night.

"We're in good financial condition and this proves it," Mr. Rosa said.

So-called free cash includes unexpended funds collected in the previous fiscal year. In this case, Mr. Rosa said, the figure was likely boosted by new growth in the city and an increase in state revenue.

The mayor said the sum also included reimbursements for state grants.

The city typically taps free cash, also referred to as the city's excess and deficiency account, to pay for snow and ice removal or one-time capital costs.

Regarding the library, Mr. Mazzarella has proposed short-term borrowing to pay for the $1.3 million overrun, but will channel $400,000 of the free cash to pay off the first year's interest, with an eye toward using free cash to pay off the remainder of the loan over the next seven to 10 years.

Councilors had sought to use some of the forthcoming free cash to help pay down the $1.3 million overrun.

Mr. Mazzarella said he couldn't promise any such move until the city's free cash had been certified by the Department of Revenue and pressed councilors to authorize him to borrow the required funds.

He is also asking the council to approve numerous capital projects, including a new ambulance, police cruisers and a sander for the Department of Public Works. Roof repairs at Leominster High School are also part of his request, submitted after the free cash figure had been certified.

"Free cash is for one-time appropriations," the mayor said, suggesting the funds shouldn't be used to balance the budget.

Mr. Rosa said he supports the mayor's plan for using the free cash.

The capital projects will be on the council agenda Monday night, but are expected to be referred to a committee for review.


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