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Council approves revenue adjustments and $250,000 use of fund balance to limit tax increase
Summary
Facing a reduced fund balance after recent litigation, the council approved revenue adjustments (motor vehicle permits, ambulance billing, interest) and authorized using $250,000 of fund balance to moderate the municipal portion of the tax rate; the municipal component is projected to rise less than earlier projections.
Finance staff reported a lower fund balance after a lawsuit (fund balance as of 06/30/24 approximately $3.74 million) and presented options to limit the municipal tax rate increase. Staff proposed revenue adjustments (motor vehicle permit revenue +$250,000; ambulance billing +$300,000; interest +$200,000; current use −$25,000) for a net $725,000 increase and recommended using $250,000 of fund balance to further reduce the impact on taxpayers.
With those changes, the municipal component of the tax rate would increase by about 11 cents versus a projected 31‑cent increase if no revenue adjustments or fund balance were used. Staff recommended retaining a prudent fund balance level (about 3% of appropriations) rather than using a larger sum that could expose the town to risk from future liabilities.
Council voted to approve the revenue adjustments and the $250,000 use of fund balance by voice vote 6–0–0. Staff will continue audit work and refine numbers for the final tax rate calculation.
Next steps: Finance will bring final figures after audit completion and staff will monitor state revenue opportunities that could influence the final rate.
