Town
Reports
A Review Of Some Sample Budget Article Formats
(from Maine
Townsman, "Legal Notes," March 1997)
This Maine Municipal Association publication is presented for "Classroom Use Only." Its intended use is to stimulate and aid in discussion and role playing within a classroom setting.
TOWN REPORTS
Every year around this time, MMA reminds municipal officials in the Municipal Calendar published under the Legal section of the TOWNSMAN to send their town reports to various state agencies.
All State House mail should include a Station number at the beginning of the address: ## State House Station, Augusta ME 04333. This address format can be used to send town reports to the following agencies/persons: State Librarian (Station 64); Department of Audit (Station 6); Department of Education (Station 23); Bureau of Taxation (Station 24); Department of Transportation (Station 16); State Tax Assessor (Station 24); Secretary of State (Station 148); and State Treasurer (Station 39).
Also, don’t forget to send a copy of your report to Maine Municipal Association, 60 Community Drive, Augusta, ME 04330.
A REVIEW OF SOME SAMPLE BUDGET ARTICLE FORMATS
The following examples were taken from a number of actual town meeting warrants. They are presented to show different approaches and the questions which can arise in connection with some of them.
Example #1. Art. _________. To see what sum of money the town will vote to raise and/or appropriate for the fiscal year 1997-1998 in each specific category for the Highway.
Department:
A. Personal Services $ _____________
B. Contractual Services $___________
C. Commodities $______________
D. Capital Outlay $________________
E. Fixed Charges $_____________
Budget Committee Recommendation:
A. $171,730
B. $36,700
C. $69,500
D. $6,660
E. $48,171
________
$332,701
Selectpersons Recommendation:
A. $172,930
B. $34,200
C. $69,500
D. $17,600
E. $49,221
________
$343,451
Discussion: This format makes it clear that the voters are voting on amounts for specific line item categories within a single article. A short-form motion could be "I move the article at the category levels recommended by the Selectpersons" (or "at the category levels recommended by the Advisory Committee"). Alternatively, separate votes could be taken on the amount for each category. (But see the third paragraph of this discussion.) Because it is clear from the article that the figures supplied by the Advisory Committee and Selectpersons are merely recommendations, provided for the information of the voters, and because the article uses the phrase "To see what sum of money" and does not limit or cap either the total amount for the article or for any individual category, the voters can amend the article to insert any amount into the text of the article for each of the categories A through E, and any or all of the amounts could be higher, without limit, than the amounts stated in the two sets of recommended figures.
The effect of the vote in this format is that the director of the Highway Department and the municipal officers will be locked into the amounts specified by the voters-that is, they will not be authorized to obligate or expend for any single category a sum of money larger than the amount specified by the voters, and they will not be authorized to transfer funds between or among the categories, even though the categories all concern only one department in the town.
Example #2. Art.______. To see what sum the Town will vote to spend for General Government under the following accounts and to see what sum the Town will vote to raise and appropriate for the same.
1996 1997 1997
Actual Requested Recommended
1. Officers Salaries and Expenses $29,325 $29,100 $29,100
2. Office Salaries $32,079 $36,169 $36,169
3. Legal Assistance $3,500 $9,000 $9,000
4. Elections and Registrations $3,500 $1,200 $1,200
5. Postage, Printing, Supplies $16,000 $14,731 $14,731
6. Insurance $21,500 $21,871 $21,871
The use of "raise and/or appropriate" in the article leaves some discretion to the voters in choosing a funding source for this article, and therefore a motion must include a clear exercise of that discretion by making a choice. If the sense of the meeting is that it is preferred to fund the article solely by taxation, then the same amendment that specifies the amounts for each specific line item category would also state the motion as one to "raise and appropriate". If the sense of the meeting is that the source will be the town’s unappropriated surplus, then the amendment would be "to appropriate from the town’s general surplus" (or similar language). If the sense of the meeting were to use tax revenues as a partial source of funding and surplus for the remainder, an appropriate amendment would specify the fact and the amounts of each ingredient of the mix. Watch for the "raise/appropriate" language used in the two following formats, and consider the meaning of it in light of this discussion.
Discussion: This format raises two issues. The first is whether, if the town meeting votes to raise and appropriate a total sum, this would lock the municipal officials into the specific line item account amounts displayed for items 1 through 6. (If the total appropriation were for less than the total of those items as printed in the warrant, the argument would be that each of the categories should be reduced pro rata to reflect the reduced amount actually appropriated.) The argument on one side would be that because the amounts (or relative allocations) are shown as "requested" and "recommended," a lump sum which does not disturb those relative amounts constitutes a direction to go with those amounts (or, pro rata, with the relative allocations). The argument the other way would be that all of the information below the first three lines is for information only and is not part of the article. This is in fact not at all clear-the second line of the article uses the phrase "under the following accounts," which can be taken to be an incorporation into the article proper of the categories and the amounts (or relative allocations) shown.
Municipal officers should try through formatting before the warrant is posted to avoid such ambiguities. A wise prospective moderator will examine the warrant before the meeting, seek clarification of the intent and wishes of the municipal officers, and then ensure that amendments elicited at the meeting remove any ambiguity and do not create any new ambiguity.
The second issue raised by this article is whether the wording limits the voters’ ability to specify other funding sources for this article because it says "raise and appropriate" rather than "raise and/or appropriate." A strong argument that the phrase means that the article cannot be amended to change the revenue source taxation to some other, or to a mix including taxation, would exist if the same meeting warrant, in one or more other articles, also used the phrase "raise and/or appropriate." The inference would be that a voter who had read the warrant and stayed away from the meeting should be able to rely on the wording of each article, and thus should be able to depend that this particular article would be funded, if at all, only from new revenue raised by taxation.
Example #3. Art._______. To see what sum the town will vote to raise and appropriate or to appropriate from some other source of funding for the Summer Road Account as follows.
Recommendation:
Beane Road $ 3,000
Mt. View Road $10,000
Hogan Mills Road $38,000
Lewis Lane $1,500
Discussion: This format raises the question of whether the voters are locking the municipal officers and road commissioner into spending this money only on these roads and only in the amounts stated or whether the listing is really only a recommendation. To give the municipal officials involved some guidance while leaving them flexibility to spend on other roads or to transfer between these road items, the words "as follows" should be deleted from the end of the article. To lock the officials into the "recommendation," a colon should appear after "as follows" and the word "Recommendation" should be deleted. Again, if this kind of problem is not identified in the course of warrant preparation, it can be eliminated by clarifying amendments at town meeting.
If the above article had appeared without either the phrase "as follows" or the word "Recommendation," the argument that most readily suggests itself is that the figures displayed for individual roads are nonetheless only for the information of the voters, because the article asks "To see what sum ... for the Summer Road Account." The strongest inference, and it is not particularly strong, would be that only a single lump sum was to be voted, and that the individual road figures were only for information as to the Selectpersons’ plans. This inference would be stronger if the voters voted a total sum which was less than the total of the figures displayed for the four roads, without expressly voting reduced amounts for each of the four roads. The inference then would be that they regarded the individual road data shown as informational and were content to leave the allocation of the reduction to individual roads to the discretion of the Selectpersons. It could be argued, however, that the voters, by changing one amount, intended both that the figures for the other roads would serve as the maximum permissible for each road, and that no funds could be expended on roads not listed.
If they had voted specifically to reduce the amount identified with the Hogan Mills Road (to $20,000, say) and voted a total amount which was the sum of that reduced figure and of the other specific amounts listed, then the inference would be that they were content with the other figures and that in any event not more than the sum specified for the Hogan Mills Road could be expended. All of the following would, however, remain unclear: (1) whether the Selectpersons would then be locked into spending any money at all for the Hogan Mills Road or for the other listed roads; (2) whether they could expend any funds for any roads not listed; and (3) whether they could shift the funds among any of the listed roads (as long as they did not exceed $20,000 for the Hogan Mills Road).
Again, a moderator should ensure that all latent ambiguities in an article are removed by a motion, and that the voters understand the meaning and effect of the motion before voting on it.
Example #4. (Not from an actual warrant) Art. ______. To see if the Town will vote to raise and appropriate the sum of $4,000 for the Town Road Account, additional to the sum already raised and appropriated therefor.
Discussion: The issue raised by this article, because it refers to a sum already appropriated, is whether the town’s taxes for the year have already been committed to the tax collector for collection. This article appears to be from a warrant for a special meeting held sometime after the "regular" or "annual" budget meeting. MMA’s Legal Services Division staff believe that, although there can be more than one meeting at which a town votes to impose real estate taxes on itself, there can only be one commitment of taxes to a collector in a year. Supplemental tax commitments are authorized by 36 MRSA § 713, but the simple imposition of additional taxes is not among their authorized purposes. Therefore, after taxes have been committed to the collector, it is too late to raise additional taxes.
Instead, the purpose for which spending is sought can be deferred, or the voters can be asked by a new warrant article to award borrowing authority to the municipal officers or to vote to draw down on town surplus, if any. The article above could not be amended at town meeting to change it over to one of these alternatives, however. Either would require a warrant and article of its own. (By E.P.C./R.W.S.)