Selectboard adopts Unrestricted Fund Balance Policy; citizen warns of legal challenge

The Putney Selectboard voted to adopt an Unrestricted Fund Balance Policy during the Nov. 5 special meeting. Fletcher Proctor moved to adopt the policy and Aileen Tulloch seconded; the motion passed.

After the vote private citizen Howard Fairman read a prepared written statement that questioned the legality of a Selectboard "Unrestricted Reserve Fund" established by voters in 2025 but without any funds deposited. Fairman quoted the applicable statute and a Vermont Supreme Court decision and wrote, "I therefore am prepared to bring a legal action challenging the legality of this Selectboard Unrestricted Reserve Fund if and when any funds have been initially deposited to it." He also suggested consulting Town Attorney Lawrence Slason about the town’s preparedness to defend such a fund or, alternatively, repealing it at the 2026 Town Meeting.

The minutes include the statutory language Fairman cited: "At an annual or special meeting duly warned, a municipality may establish a reserve fund to be under the control and direction of the legislative branch of the municipality. The reserve fund shall be kept in a separate account and invested as are other public funds and may be expended for such purposes for which established, or when authorized by a majority of the voters present and voting at an annual or special meeting duly warned, for other purposes." The minutes also quote the Vermont Supreme Court: "Just because a taxing authority may provide for future expenses does not 'warrant unnecessary accumulation in the treasury for the remote future or for contingencies which may never occur.'"

Town Manager Karen Astley said she had consulted Town Council before the meeting and advised the Selectboard on the policy. The board agreed to revisit reserve-fund details and consult further with staff and counsel as needed; no legal action has been filed as of the meeting.