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AYER — The amount of funds available for the town at the end of the last fiscal year was $862,179.

Gerald Perry, the Massachusetts Department of Revenue (DOR) director of accounts, certified the town’s free cash as of July 1, 2007, in a letter to town accountant Lisa Gabree dated Nov. 1.

DOR labels free cash as the amount of remaining, unrestricted funds in the town’s budget from the previous fiscal year. It includes unexpended free cash from the previous year, actual receipts in excess of the town’s revenue estimates and unspent money.

However, generally speaking, unpaid property taxes and deficits could reduce the amount DOR certified as free cash.

DOR calculates the town’s free cash based on its balance sheet, assets and liabilities as of June 30, 2007.

However, town administrator Shaun Suhoski said the size of the general fund’s free cash this year is misleading. There are several constraints on the appropriation, he said.

“First, this year’s free cash is inflated by about $200,000 due to a one-time reimbursement from the School Building Assistance program,” he said. “In appropriating those funds, we have a fiscal policy commitment to allocate a portion to our stabilization fund. And we’re looking at significant pending expense requirements for health care and litigation.”

In accordance with the Board of Selectmen’s budget policy, it’s committed to transferring 20 percent of free cash, or a minimum of $100,000, whichever is greater, to the town’s stabilization fund. That would account for $172,436.

Ayer’s stabilization fund is designed to accumulate funding for capital expenditures or improvement projects, such as construction or major repairs to municipal buildings. It also includes fees for architects, engineers, lawyers and other professional services.

According to DOR, the town may use its stabilization fund for any lawful purposes and appropriate into it in any year an amount not to exceed 10 percent of the amount Ayer raised in property taxes last year — in this case $13.9 million.

Selectmen are forecasting a growth rate of at least 13.4 percent in Ayer’s health-plan contribution, said Suhoski. That would account for another $375,200.

Finally, the town faces litigation expenses in the Maher and Waters cases, which date back to the early 1980s. Suhoski said that could amount to $300,000 this year.

After all is said and done, only $14,543 will be left in the budget, he said.

“The town is aggressively defending its litigation choice,” said Suhoski. “And as part of its litigation action, it’s seeking liability coverage from its insurance company in the two cases.”

Suhoski said the defendants’ convictions — for murder in one case and rape and sexual assault in the other — had been overturned with the presentation of new DNA evidence.

The commonwealth had prosecuted both cases, though Ayer police had arrested and charged both defendants, he said. The overturned verdict had resulted in the former defendants’ litigation against the town.