Commissioners discuss reserves and one-time funding for new pay plan

Commissioner discussion at the April 9 work session focused on the town's reserves and the proposed funding approach for a new civilian pay plan.

Lisa, the budget presenter, explained that the town proposed using $313,000 from the unassigned fund balance to cover the one-time cost of placing civilian employees on a revised pay scale (the initial placement costs), while ongoing merit and cost-of-living adjustments would be paid from operating revenues in future years. She described that historically the town has used unassigned fund balance for one-time pay-plan changes and that the unassigned balance was currently about $2.7 million, with a stabilization reserve of about $1.5 million and a leave-payout reserve at its $300,000 maximum.

Commissioners asked for written policy language and a short history of fund-balance/ reserve levels for the past several years. Lisa said the town adopted reserve policies (amendments noted September 5, 2023) that allow transfers to capital reserve (up to an additional 75% of excess revenues over expenditures) and to leave-payout reserve (up to an additional 50%); the stabilization reserve target is calculated from audited non-capital expenditures and changes year to year.

On capital-reserve use, staff proposed using roughly $758,000 from the capital reserve to buy replacement vehicles and equipment in lieu of issuing debt; staff argued that current interest rates make borrowing less attractive and that the town's capital reserve is adequate for the purchases. Lisa said she would provide the commissioners with the capital-reserve balance and a multi-year view of fund balances for review.