Officials debate police and fire revolving funds as a way to track fees and cover emergencies

Effingham officials spent a substantial portion of their Jan. 13 meeting debating whether to authorize revolving (special revenue) funds for the police and fire departments so those departments could retain certain fees and billing revenue for public-safety uses.

An opponent argued that allowing departments to keep fee revenue in dedicated accounts sets a poor policy precedent because "anybody that collects fees could request this," and it risks creating departmental slush funds. That speaker framed the concern as a governance issue: departmental control over receipts could weaken centralized budgeting and oversight.

Proponents countered that RSA language permits limited public-safety revolving funds and that the intent is accountability and operational readiness. A staff speaker explained the mechanics: revenues and related expenses would be tracked separately (income and expense lines) and funds would be held by the treasurer, with select board approval required for expenditures. The same speaker described common uses — paying overtime and equipment costs after large events, matching funds for capital purchases such as air packs, and smoothing costs for multi-year software implementations.

Supporters emphasized examples from other municipalities, saying the tool helps clean up bookkeeping and can lower operating budget requests in years when detail revenues are available. One department head gave a rough figure: "it looks like we brought in about $7,000 in fiscal year 2025 in firefighter revenue," and argued that holding such receipts in a revolving fund could reduce future trust-fund requests.

Concerns centered on precedent and implementation details: who authorizes expenditures, how revenue would be estimated for the tax rate, and how payroll and payroll-tax liabilities from detail work would be administered. Committee members asked staff to obtain operational details from other towns (Wakefield) and for written guidance about how the treasurer would manage payroll and credits so the committee could weigh policy risks and benefits before a vote.

Outcome: The discussion did not culminate in final policy approval. Committee members tasked staff to collect sample policies and accounting practices from other municipalities and to return with a clearer implementation plan; the revolving-fund warrant language remains on the draft warrant pending that follow-up.

Representative quotes (verbatim from meeting): "I think it's bad policy to let departments keep fees and revenues they collect in a fund for their own use," and "The whole intent behind this is we're we're collecting this money throughout the year... it would need to be approved by the selectman to make a purchase, and it can only be a purchase of the items listed in the warrant article."