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Council reviews supplemental budget changes; consultant recommends using audited beginning balance to cover 2026 gap
Summary
A consultant told the council the general fund faces a $527,000 shortfall in 2026 and recommended using the audited beginning fund balance to cover one‑time gaps while pursuing structural fixes for 2027. Staff also proposed redirecting marina surpluses to capital projects rather than to general operations.
A finance consultant presenting the town's supplemental appropriation package told council that after reconciling the 2025 audit with the 2026 budget, the general fund shows an estimated $527,000 shortfall for the year. "We are seeing a decrease in our revenues of $202,000 in total... revenues do not cover expenses by $527,000," the presenter said, and recommended using an increased audited beginning fund balance (about $1.6 million) to bridge the shortfall this year while working toward a balanced 2027 budget.
Council and staff debated philosophical policy questions about where to place surplus funds. The consultant recommended that marina revenues that exceed marina expenses be transferred to the capital fund to pay for marina capital projects rather than be absorbed into the general fund. Staff also proposed eliminating some transfers in the draft budget (for example, a previously approved $150,000 parking fund transfer) and continuing to refine departmental estimates before formal adoption. Council asked for further analysis on police IGA costs and for clearer memo language explaining wage‑driven increases in police-related expenditures.
