CARY — The town may reduce the size of a budgetary buffer in order to free up cash for strategic investments.
Currently, Cary keeps at least four months of operating expenses and debt payments above the state-required minimum for its general fund. Under the proposed change, Cary’s buffer would drop to three months of expenses.
Talk of the policy change reflects the new restraints that have weighed on Cary since the recession. This year’s budget was the third in a row to spend money from the general fund instead of putting money into it, shrinking it from $95 million to $68 million.
Under the new policy, the town could dip further into that pot each year. For example, the town’s minimum set-aside would be reduced by $11 million in the current fiscal year. Rather than keeping at least $62 million in general savings this year, the town only would be required to keep $51 million in the bank.
The intent, according to finance director Karen Mills, would be to free more funds for unexpected opportunities. The money shouldn’t be used to cover operational expenses or regular town needs, such as a fire station.
Mills also noted that the town never comes near its minimum fund-level requirements, instead passing it by $5 million or more each year.
Councilman Jack Smith said a lower bar would free the town to do more strategic spending.
“We’re creating a bigger float that we can use in an impactful, strategic way,” he said at a recent town meeting, describing himself as nearly ready but hesitant to approve the change.
Councilwoman Jennifer Robinson said she felt “discomfort” changing “the policy we’ve had so long.”
Councilwoman Gale Adcock seemed more supportive.
“I’m hearing that it is really not hurting us in any way,” she said.
Mills said she had consulted with financial professionals who didn’t believe the change would affect the town’s bond ratings, as long as the money was spent responsibly.
Councilman Ed Yerha said he was “comfortable” with the change but not ready to move.
The council did not vote on the matter.
Kenney: 919-460-2608; Twitter: @KenneyNC