The Report is a document to keep and refer to throughout the year, as well as a tool to use in preparing for informed questioning and debate at town meetings. The Fund may be used for any purpose for which the Town is allowed to borrow money, or for any other lawful purpose. In order to create and maintain the Fund, the Town may appropriate in any year an amount not greater than 10 percent of the amount raised in real estate and property taxes in the previous year. The State has a number of highway construction programs which are funded throughout the year, enabled through Chapter 90. However, the Town must first raise and spend the full amount of the project, after which the State will reimburse the Town.
Free cash is generated by amounts unspent in various accounts at the end of the fiscal year.
The amount is effective only as of July 1st of any year and only after the amount has been certified by the State following submission of the Town's balance sheet. Free cash may be applied against the tax rate by an act of town meeting or for any other lawful purpose. The latter two items account for over half of the monies used to operate the Town. The total budget to run the Town is voted at Annual Town Meeting. The levy limit may be exceeded by an override or debt exclusion approved by the voters at the ballot box.