Hello, Jeff,

 

Here’s how the rule works:

 

Snow and Ice is considered a legal deficit (meaning we will not reduce your free cash by the amount of a snow and ice deficit, should you have one…) IF you appropriated at least as much for your snow and ice budget as the prior year.

 

So, using your example below:

 

In FY2013, if you showed a snow and ice deficit on your 6/30/13 balance sheet that you submitted to us for free cash certification, we would have hit your free cash for the amount of the deficit because you did not appropriate at least as much for the snow and ice budget as you did in FY2012.  That is how the rule works.  You can reduce your budget, as you did, but you roll the dice and lose if it happens to be a snow heavy year when you gambled it would not be.  That is why our legal bureau said it’s not illegal, but not prudent…  It’s a gamble.

 

If the accountant said, we will not allow it, I am sure that she meant we would hit your free cash if there is a deficit.

 

In 2014, if you had a deficit in snow and ice, and you appropriated at least as much for snow and ice in 2014 as you did in 2013, the deficit is legal, and there is no impact to free cash

So, according to the director, Templeton town accountant was/is wrong regarding snow & ice budgeting. The town could budget 300 K one year and budget 290K the following year. There is cause and effect, but, nowhere does it state "you can never appropriate less one year than you did the previous year." In fact, the director states "you can do it."