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Finance director: town on track for modest revenue gains; board agrees to use $1M from health fund reserves to smooth premiums
Summary
Finance Director Amy reported investment income and conveyance‑fee trends that increase projected general fund revenues; the board agreed to retain a $1 million planned use of health insurance reserves to offset premium pressure but will revisit in March as year‑end claims clarify.
The Board received its quarterly financial report, covering investment returns, revenue trends and fund reserves.
Amy said short‑term yields have stepped down slightly but the town’s six‑ and nine‑month CDs remain near 4% while money‑market rates are around 3.75%. She told members one three‑month CD was liquidated and put into the money market, and used those rates to update year‑end income projections.
On revenues, conveyance fees have trended higher than budget in the last year and staff agreed to provide a five‑year budget‑to‑actual trend to explain assumptions; the town manager and finance director said future budget numbers will be supported by market analysis rather than a simple moving average. The tax collection rate remains strong (historical near 99.5%), but staff reported two items that could affect collections: a recent large tax appeal and one sizable delinquent property account that may enter tax‑sale processes.
The board discussed personnel budgeting and vacancies. Police vacancies were highlighted (five current vacancies, an anticipated three at year‑end) and staff proposed carving police out of the townwide vacancy factor and using a police‑specific vacancy calculation tied to recruitment pipelines. Members debated whether one‑time vacancy savings should be used for capital needs or retained to avoid cliffs in future years.
On health insurance, Amy explained that reserves are above typical broker targets and her prior estimate of using $1 million would remain the board’s working assumption. The board agreed to keep the $1 million plan for now, noting the broker recommended using roughly one‑third of excess reserves to avoid a premium cliff; members asked staff to revisit the decision in March/April as claims experience becomes clearer.
The director also briefed the board on pension reporting timing and said updated pension statements will be provided at future meetings.
