WATERBORO — The owner of the firm that audits Waterboro’s municipal government books is recommending the town develop a capital reserve account and remove the $1.2 million crisis fund from the general fund.

Those two items were among suggestions made by Ron Smith, principal of R.H.R. Smith & Company, a Buxton-based auditing firm. Smith addressed selectmen at their Tuesday meeting.

“You’re pretty debt free,” said Smith. “Financially, I’d give you a B-plus, for sure.”

He told the Board of Selectmen that the municipality has a $4.1 million fund balance that includes a $1.2 million crisis fund.

Smith said national standards recommend communities keep anywhere from 30 to 90 days in undesignated funds  to operate the town if need be.

Of the total fund balance, the town has about $1.8 million in uncommitted finds — or enough money to operate the town for about 50 days.

“Financially, Waterboro is exactly where it was expected to be, and a bit better,” he said.

Smith recommended a calculated capital reserve plan to be funded through future budgets.

“You have the money to allocate to that, he said,. “You as selectmen are the gatekeepers of that by statute.”

Selectmen’s board Chairman Dennis Abbott asked if a referendum vote by the town would be required to create a fund.

“The town would vote to fund it, said Smith. “What will drive it is a plan, a capital reserve; here’s why we’re putting away $100,000 a year and why.”

Waterboro is relatively debt free, he said.

Altogether, Waterboro currently has about $983,000 in bonded indebtedness and will add about $615,000 including principal and interest to pay for a new fire truck approved by voters  on Nov. 6.

Smith also recommended the crisis fund be separated from the general fund.

The board decided to hold off on approving the audit until they’ve all had a chance to review it more thoroughly.

— Senior Staff Writer Tammy Wells can be contacted at 780-9016 or twells@journaltribune.com.