Board discusses tax-anticipation borrowing, undesignated funds and budget timeline

Board members discussed the town’s use of tax-anticipation notes (TANs) to cover near-term cash needs. The administrator said the town took a $1.5 million TAN this year and that the town’s short-term interest expense was about $30,000 last year.

The administrator explained the town maintains an undesignated fund equivalent to roughly three months of expenses to cover January–March cash flow shortfalls, and that tax delinquencies and timing affect when the town must borrow. Members discussed whether an alternative budgeting cadence (an 18-month budget) might reduce repeated borrowing but noted that calendar and voter-approval patterns could complicate the approach.

The board heard that state-mandated timelines govern when liens and foreclosures occur for unpaid taxes: interest accrues after the tax due date, liens are placed after 12 months and property-foreclosure processes begin about 18 months after the commitment date if unpaid. The administrator said staff will continue to monitor borrowing needs and present options during budget season.