Spencer Trust trustees seek legal opinion after finance review limits use of trust funds

Spencer Trust trustees on Wednesday debated how to set the FY2026 budget after a finance review concluded the trust should be budgeted on annual income — dividends and interest — rather than by drawing on the trust’s principal.

Manager Hervey, who presented the budget, told trustees the trust balance stood at about $6,075,000 and that the longstanding assumption that the trustees could tap corpus was incorrect. "We're gonna have to maintain budgets that are based on the annual income, which is dividends and interest that's generated from the trust investments," he said, outlining recommended line-item adjustments including keeping agency support at $107,000 and a set of amendments to home repair, an emergent fund, administrator consulting fees and "super senior" grants that total about $242,000.

The finance presentation included several specific proposals: $35,000 per home repair award, $10,000 per merchant (as listed in the memo), a modest reduction in management fees from $23,000 to $22,000, a $15,000 Spencer Trust legal budget, and a $60,000 allocation for super senior grants, which the presenter estimated would amount to roughly $750 per applicant if recipient numbers stayed similar to prior years.

A trustee raised a competing reading of the trust language, saying the trust purpose paragraph appeared to allow use of "the entire principal... together with any cumulative income" and asked that the town attorney review whether the trust’s purpose permits spending principal. "I think for some reason, the analysis said annual income is what's to be used. That's not the way I read the paragraph," the trustee said, urging a pause until counsel could examine the language.

Trustees discussed the practical effect of delaying changes. Manager Hervey said no super senior grants had been announced, but delaying certification could delay the administrator's contract and home repair project expenditures; he also said some payments due this month would be covered by existing non-delinquent funds. One trustee said the current adopted budget could likely "survive for this month" while counsel reviews the trust text.

After discussion, a trustee moved to direct legal counsel to provide an opinion on allowable uses of the trust and to proceed with limited measures to avoid imminent operational problems; the motion was recorded by the clerk as moved by Trustee Bridal and seconded by Trustee Jan Kovak. The chair called for the vote and "Aye" was recorded; the transcript does not show a full roll-call tally.

Earlier in the meeting trustees approved minutes from the June 2, 2025 Spencer Trust meeting on a voice vote (mover: Trustee Brown; seconder: Trustee Cassano) that the chair announced passed five-zero. The meeting then opened public comment, heard no recorded public remarks in the transcript, and adjourned after a final motion to close the meeting (mover recorded later as Trustee Jankozak).

What happens next: trustees directed staff to obtain formal legal guidance on whether the trust may fund FY2026 at levels that draw on principal or whether expenditures must be limited to income; trustees indicated they could operate month-to-month to preserve essential services while counsel provides an opinion. The meeting moved on to public comment and then adjourned.