The South Burlington City Council on Sept. 15 approved three allocations of its unaudited FY25 surplus: $40,000 for curb and sidewalk projects, $63,000 for consulting tied to Climate Action Plan implementation and a $300,000 deposit to the city's health care reserve. The first two allocations passed unanimously; the $300,000 addition to the health care reserve passed with one no vote.

Council's Finance Director Martha Machar told the council the city closed FY25 with about $1.2 million in surplus and asked the council to carry forward two budgeted-but-unspent items and to add funds to a self-insured health care reserve. "We closed the year with, 1.2 in surplus," Machar said during her presentation.

Machar said two of the requested items had been budgeted but not spent, and the third request was to bolster a reserve that covers high claims under the city's self-insured plan. She described the reserve as protection against unpredictable, high-cost claims and said the city pays claims as incurred rather than by a fixed premium. Deputy Finance Director Rich Donahue and Machar explained the city has a stop-loss arrangement and that taking on higher stop-loss exposure reduced premiums in previous budget cycles; that change has produced a small number of high claims in the most recent year.

Council members asked for more detail about the health benefits program before approving a larger deposit. Councilor Elizabeth (full name not specified in transcript) said she preferred to delay the deposit until staff briefed the council on the city's benefits and stop-loss strategy. "I would prefer not to make that decision in this packet of information until we have that opportunity," she said. After discussion, the council voted on the motions: the $40,000 and $63,000 allocations passed unanimously; the $300,000 allocation to the health care reserve passed with Councilor Elizabeth recorded as the sole nay.

City staff clarified that the health care reserve is intended to cover unexpected, high-dollar claims and that if funds are not needed they remain in the city's fund balance. Machar said the reserve currently contains several buckets, including amounts for known incurred-but-not-paid claims and a separate pool for large claims; the proposed $300,000 would be added to the large-claim bucket. Councilors and staff also discussed options other than using reserve funds, including expense reductions if FY26 projections worsen.

The council's votes were procedural approvals to allocate the FY25 surplus; no long-term policy changes were adopted at the Sept. 15 meeting. Staff said the FY25 audit is scheduled for October and final audited numbers will be presented when available.

Looking ahead, councilors asked staff to present a fuller briefing on the city's benefits structure and stop-loss choices at an upcoming meeting so the council can decide reserve levels with more information.

Details: the council approved carrying $40,000 forward for curb and sidewalk projects and $63,000 for Climate Action Plan consulting; it approved by a 4-1 vote a $300,000 addition to the health care reserve. Councilor Elizabeth cast the lone no vote on the $300,000 addition.