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Middlebury finance leaders report $351,073 FY25-26 shortfall; board debates reserve use and special-election procedure
Summary
CFO Seth Bernstein told the Board of Finance the town projects a $351,073 deficit for FY25-26 and that only $337,711 would be available for pay-as-you-go projects without breaching the required 8% reserve; board members discussed reallocations, potential referendum options and a procedural dispute over FEMA appropriation items in a recent special election.
Chief Financial Officer Seth Bernstein told the Board of Finance on March 11 that his analysis projects a FY25-26 deficit of approximately $351,073 after estimated remaining revenues and projected expenditure adjustments.
Bernstein explained his revenue projection for March–June totaled about $2,830,952, producing an estimated revenue total of $44,339,171 against a budgeted $44,665,502 and an initial shortfall of $326,331; expected overages on some expenditures produced a net projected deficit Bernstein placed at $351,073.
Bernstein also reviewed the town’s undesignated fund balance analysis. The required 8% reserve for the FY26-27 budget is $3,657,841, he said, and after that requirement the town would have about $337,711 available for pay-as-you-go capital projects without breaching the reserve policy.
Board members spent significant time negotiating line-item adjustments. Highlights included moving finance assistant overtime into a dedicated overtime line and reducing it to $2,500, the Board of Selectmen’s proposed POCD funding and a plan to fund the town’s new Plan of Conservation and Development (POCD) through a mix of existing reserves and a potential referendum to raise the remaining amount for an expected $80,000–$100,000 study.
Rita Smith raised a procedural concern about a question on the February 25 special election that appropriated funds related to FEMA. Smith said she found no record of a Board of Finance vote to send that FEMA appropriation question to the special election and asked for clarification; First Selectwoman Jennifer Mahr replied that Town Meeting approval is the ultimate authority for reclassification and that she would seek a legal opinion to clarify the correct procedure. The board agreed to have the Board of Selectmen review the sequence and then send items to the BOF for a formal vote if needed.
The meeting produced several routine motions: approval of prior meeting minutes and adjournment were approved without roll-call tallies recorded in the transcript. The board did not take final votes on the larger fund-reallocation or sprinkler-funding decisions at the March 11 meeting; members asked staff to provide further detail and to return with options for funding and any needed legal guidance.
