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Financial Management

What Should We Do if Our SAM.gov Account Becomes Inactive?

If your SAM (System for Award Management) registration becomes inactive, it must be reactivated. An inactive status can affect your eligibility for federal funding, such as FEMA Public Assistance and some transportation and community development grants and loans.

Below are the steps you can take to reactivate the account.

Log In to your SAM account.
  • If you are an authorized user, access your municipality’s SAM account using the email address and password associated with your login.gov account. If you’ve forgotten your login credentials:
    • Email Address: If you don’t know what email is associated with your municipality’s SAM account, contact the Federal Service Desk (see Need Help? below) for free assistance.
    • Password: If you don’t have your password, use the “Sign In” function on the SAM homepage then the “Forgot your password?” function on the Sign In page.
  • If you are not an authorized user, you can request that the Entity Administrator for your municipality assign you a role. If the municipality’s Entity Administrator is no longer with the municipality, the municipality can request a new Entity Administrator be appointed.
Verify why your SAM account is inactive.

The first step to reactivating your SAM registration is to verify why it is inactive. Once you are logged in, SAM will provide information about the specific actions required to reactivate your registration. The most common reasons for inactive registrations are:

  • The municipality did not renew its registration in the past year by validating information in SAM. SAM accounts must be renewed each year or they become inactive. There is no fee to renew SAM accounts. It is a free process provided by the federal government. It can be helpful to set a calendar reminder to renew the registration at least one month prior to expiration. This allows sufficient time to work out any challenges during the renewal process.
  • The municipality renewed its registration, but something was missed during the update process. If this is the case and you login to your account, SAM will provide information about the specific actions required to reactivate your registration.
Complete required actions.

SAM will typically provide a list of actions you need to complete to reactivate your registration. These actions may include updating your registration information, renewing your registration, or resolving any outstanding issues.

  • Submit Necessary Updates. If your municipality’s registration requires updates or changes to its information, complete the necessary fields and provide any required documentation. Ensure that all information is accurate and up to date. Inaccurate information may lead to delays in processing grant agreements.
  • Follow the Renewal Process. If your registration has expired (was not renewed in the past year), you will need to go through the renewal process. This typically involves reviewing and updating your information, confirming your eligibility, and verifying your tax identification numbers (TINs). SAM may require you to submit specific documentation to verify your municipality’s identity. Ensure that you provide all requested documents in a timely manner. A common error is to miss using the Submit button after updates are completed and before exiting SAM. If you do not receive a confirmation email, login and check for additional missed items.
  • Verify Your Status. After completing all required actions, log back into your SAM account after a few days to verify your SAM registration status has been reactivated. Ensure that there are no outstanding issues or alerts related to your registration.
Need Help?

Contact the Federal Service Desk through the following methods:

You also can submit your question through VLCT’s Ask A Question webpage. We are happy to help you.

What if I have other SAM questions?

VLCT published a resource on our website that provides Answers to SAM.gov Frequently Asked Questions. These are the questions we receive most often from municipalities.

Publication Date
01/31/2025

Answers to SAM.gov Frequently Asked Questions

Are you having difficulties with your SAM.gov registration? Is your registration inactive? Has the person with administrative privileges for your account left municipal service? 

This resource assists municipalities with finding answers to their most frequently asked questions about SAM.gov (a.k.a. SAM). In most cases, the questions below link directly to SAM's Frequently Asked Question (FAQ). If you have a question that is not included below, you can search SAM's FAQs or submit your question on our Ask A Question webpage. We are happy to help you find an answer.

What Is SAM.gov?

SAM.gov, the System for Award Management or SAM, collects data from suppliers and funding awardees who want to do business with the federal government. Municipalities interact with SAM.gov in multiple ways.

  • Municipalities that are awarded federal funding are required to register with SAM and to maintain that registration through the life of their funding agreement.
  • Municipalities that pass federal funds to other entities (contractors, grant sub-recipients) are required to search for and retain the other entity's registration and exclusion records.
  • Municipalities that use federal funds for construction projects must use wage determinations listed on SAM to meet their obligations under the Davis Bacon Act.

VLCT encourages municipalities to maintain their SAM registration regardless of whether the municipality has current federal funding. Maintaining the registration through annual updates helps ensure federal funding, like FEMA Public Assistance and infrastructure and community development funding, will flow smoothly to the municipality.

Does It Cost Money to Register or Renew a Registration in SAM.gov?

No. Registering in SAM is free. There are private businesses who charge a fee to help you register in SAM. While it is a business decision as to whether the municipality wants to pay a fee to have a third party register them in SAM, there is no cost to register or to renew a registration directly on SAM. 

Registering on SAM generally can be done in less than hour, and registration renewal generally can be done in less than five minutes. The official SAM site is www.sam.gov.

Frequently Asked Questions

General

Confirming Entity Registration and Status

Account Roles

Updating and Renewing a Registration

SAM recommends entities opt in to public display. No sensitive information is available via SAM’s public search. Public display allows the municipality's information to be found easily by granting agencies and so information can be located if employees leave without transferring the Entity Administrator role. Registrations that opted in to public display remain searchable and viewable by authenticated users in SAM. Inactive Registrations that opted out of public display are only searchable and viewable by authenticated federal users and authenticated public users with roles with the entity in SAM. 

Getting Help

Publication Date
01/31/2025

2025 Events & Training Schedule

VLCT offers a variety of trainings throughout the year. This listing is an overview that is subject to change. For details of currently available trainings and to register, please visit vlct.org/events. Most events are posted on the events calendar four or more weeks before they take place. 

Sponsored by Acrisure, VLCT’s exclusive broker partner in providing life and disability insurance and health insurance advisory services to participating VLCT members.

Acrisure Logo

 

 January

TopicEvent DateTimeFormat/Location
VLCT Holiday – New Year's Day 20251/1/2025ClosedHoliday
Town Meeting Prep: Requirements and Deadlines1/7/202510:00 AM - 12:00 PMZoom Webinar
Workplace Matters: Workplace Wellbeing1/9/202512:00 - 1:00 PMZoom Webinar
Grants & Funding Chat: Wastewater1/14/20251:00 - 2:00 PMZoom Meeting
Legal Lunch Hour – January (please note date change)1/15/202512:00 - 1:00 PMZoom Meeting
Selectboard Monthly Meetup1/16/20255:30 - 7:00 PMIn Person - Rutland
VLCT Holiday – MLK Day1/20/2025ClosedHoliday
DER Training1/21/20252:00 - 3:00 PMZoom Webinar
Advocacy Chat1/27/20251:00 - 2:00 PMZoom Meeting
Town Meeting Tune-Up1/29/20259:00 AM - 12:00 PMHybrid

February

TopicEvent DateTimeFormat/Location
Grant Basics: Funders’ Advice for Success - POSTPONED2/4/202510:00 - 11:30 AMZoom Webinar
Advocacy Chat2/10/20251:00 - 2:00 PMZoom Meeting
Build a Better Project2/11/20251:00 - 2:00 PMZoom Meeting
VLCT Holiday - Presidents' Day2/17/2025ClosedHoliday
Legal Lunch Hour – February2/20/202512:00 - 1:00 PMZoom Meeting
Advocacy Chat2/24/20251:00 - 2:00 PMZoom Meeting
Cybersecurity Risk Awareness for Officials and Senior Management2/24/20252:00 - 6:00 PMIn Person - Rutland
Cybersecurity Risk Awareness for Officials and Senior Management2/25/20252:00 - 6:00 PMIn Person - Berlin
Muni Mornings with Kathleen: Selectboard Organization & Onboarding 2/27/20259:00 - 10:00 AMZoom Meeting

March

TopicEvent DateTimeFormat/Location
Money Matters: Investing3/5/202512:00 - 1:00 PMZoom Meeting
Advocacy Chat3/10/20251:00 - 2:00 PMZoom Meeting
Grants & Funding Chat: Climate Resilience3/11/20251:00 - 2:00 PMZoom Meeting
Selectboard Monthly Meet-Up3/12/202512:00 - 1:30 PMIn Person - Windham
Workplace Matters: Onboarding3/13/202512:00 - 1:00 PMZoom Webinar
Selectboard Essentials3/22/20259:00 AM - 2:30 PMHybrid - Montpelier
Advocacy Chat3/24/20251:00 - 2:00 PMZoom Meeting
Legal Lunch March3/26/202512:00 - 1:00 PMZoom Meeting
Muni Mornings with Kathleen: Hiring for Summer Rec Programs 3/27/20259:00 - 10:00 AMZoom Meeting
Selectboard Monthly Meet-Up3/31/20255:30 - 7:00 PMIn Person - St. Albans

April

TopicEvent DateTimeFormat/Location
Grant Basics: Before the Grant4/1/202510:00 - 11:30 AMZoom Webinar
Money Matters: Put the FUN in Fund Balance!4/2/202512:00 - 1:00 PMZoom Meeting
Advocacy Chat4/7/20251:00 - 2:00 PMZoom Meeting
Build a Better Project: Assessing Project Feasibility4/8/20251:00 - 2:00 PMZoom Meeting
Liability & Risk Management for Municipal Leaders4/10/202510:00 AM - 12:00 PMZoom Webinar
Selectboard Monthly Meet-Up4/10/20256:00 - 7:30 PMIn Person - Hyde Park
DER Training4/14/20252:00 - 3:00 PMZoom Webinar
Open Meeting Law for Boards & Committees4/16/202510:00 - 11:30 AMZoom Webinar
Legal Lunch – April4/17/202512:00 - 1:00 PMZoom Meeting
Advocacy Chat4/21/20251:00 - 2:00 PMZoom Meeting
Muni Mornings with Kathleen: Preparing for Summer Storms4/24/20259:00 - 10:00 AMZoom Meeting

May

TopicEvent DateTimeFormat/Location
Intro to CaseBuilder5/1/20251:30 - 2:30 PMZoom 
Advocacy Chat5/5/20251:00 - 2:00 PMZoom Meeting
Money Matters: Fiscal Year-End Considerations and Preparations5/7/202512:00 - 1:00 PMZoom Meeting
Workplace Matters: Conflict Management5/8/202512:00 - 1:00 PMZoom Webinar
Selectboard Monthly Meet-Up: Windsor County5/8/20256:00 - 7:30 PMIn Person - Windsor
Effective BCA Property Tax Appeal Hearings5/14/20259:00 AM - 12:00 PMHybrid
Legal Lunch Hour – May5/15/202512:00 - 1:00 PMZoom Meeting
Muni Mornings with Kathleen: Hiring Your First Town Administrator or Administrative Assistant5/19/20259:00 - 10:00 AMZoom Meeting
Risk Management for Highway Supervisors5/21/20259:00 AM - 2:30 PMIn-Person
VLCT Holiday – Memorial Day5/26/2025ClosedHoliday
Spring Planning & Zoning Forum5/28/20259:00 AM - 12:00 PMHybrid

June

TopicEvent DateTimeFormat/Location
Grant Basics: Developing and Funding the Project6/3/202510:00 - 11:30 AMZoom Meeting
Risk Management for Highway Supervisors6/5/20259:00 AM - 2:30 PMIn-Person
Money Matters: Setting the Tax Rate6/4/202512:00 - 1:00 PMZoom Meeting
Are You Ready for Your Next Disaster?6/10/20251:00 -3:00 PMZoom Meeting
Vermont Land Use Review Board (LURB) Overview6/11/202510:00 AM - 12:00 PMZoom Webinar
Selectboard Monthly Meet-Up: Chittenden County6/11/20255:45 - 7:30 PMIn Person - S. Burlington
Local Officials Golf Tournament6/13/20258:00 AM - 3:00 PMKillington, VT
Legal Lunch Hour – June6/18/202512:00 - 1:00 PMZoom Meeting
VLCT Holiday – Juneteenth6/19/2025ClosedHoliday
Muni Mornings with Kathleen: Highway Hiring6/26/20259:00 - 10:00 AMZoom Meeting
    

July 

TopicEvent DateTimeFormat/Location
VLCT Holiday – Independence Day7/4/2025ClosedHoliday
Grants & Funding Chat: Transportation7/8/20251:00 - 2:00 PMZoom Meeting
Ordinance Adoption & Enforcement7/16/20259:30 AM - 12:00 PMZoom Webinar
Legal Lunch Hour – July 7/17/202512:00 - 1:00 PMZoom Meeting
New PACIF Policy Portal Training7/23/20251:00 PMZoom
Selectboard Monthly Meet-UpTBD5:30 - 7:00 PMIn Person

August 

TopicEvent DateTimeFormat/Location
Grant Basics: The Application8/5/202510:00 - 11:30 AMZoom Webinar
VLCT Holiday – Bennington Battle Day (observed)8/15/2025ClosedHoliday
Unemployment Best Practices8/20/20251:30 - 2:30 PMZoom
New PACIF Policy Portal Training8/27/20251:00 PMZoom
Muni Mornings + Money Matters: Tools & Tips for FY27 Budgeting and Capital Budgeting8/28/20259:00 - 9:45 AMZoom Meeting

September

TopicEvent DateTimeFormat/Location
VLCT Holiday – Labor Day9/1/2025ClosedHoliday
Workplace MattersTBD12:00 - 1:00 PMZoom Webinar
Municipal Budgeting9/17/202510:00 AM -12:00 PMZoom Webinar
New PACIF Policy Portal Training9/24/251:oo PMZoom

October

  TimeFormat/Location
2025 Annual Meetings & Town Fair10/7 - 8/20258:00 AM - 5:00 PMDoubleTree - S. Burlington
Grant Basics: Grant Management10/21/202510:00 - 11:30 AMZoom Webinar
Fall Planning & Zoning Forum10/22/20259:00 AM - 12:00 PMHybrid
Legal Lunch Hour – October10/23/202512:00 - 1:00 PMZoom Meeting

November

TopicEvent DateTimeFormat/Location
Tax Abatement11/5/202510:00 - 11:30 AMZoom Webinar
How to Read Your Audited Financial Statements11/6/202510:00 - 11:30 AMZoom
VLCT Holiday – Veterans Day11/11/2025ClosedHoliday
Workplace Matters11/13/202512:00 - 1:00 PMZoom Webinar
Grants & Funding Chat: Community Economic Development11/12/20251:30 -2:30 PMZoom Meeting
Muni Mornings with Kathleen: Communication Tools11/13/20259:00 - 10:00 AMZoom Meeting
Workplace Matters11/13/202512:00 - 1:00 PMZoom Webinar
Special Topic Municipal Law: TBD11/19/202510:00 AM - 12:00 PMZoom Webinar
Legal Lunch Hour – November11/20/202512:00 - 1:00 PMZoom Meeting
VLCT Holiday – Thanksgiving Day11/27/2025ClosedHoliday
VLCT Holiday – Thanksgiving Friday11/28/2025ClosedHoliday
Selectboard Monthly Meet-UpTBD5:30 - 7:00 PMIn Person

December

TopicEvent DateTimeFormat/Location
Special Topic Municipal Law: TBD12/10/202510:00 AM - 12:00 PMZoom Webinar
Muni Mornings with Kathleen: Budgeting Roundtable12/11/20259:00 - 10:00 AMZoom Meeting
Legal Lunch Hour – December12/11/202512:00 - 1:00 PMZoom Meeting
VLCT Holiday – Christmas Eve12/24/2025ClosedHoliday
VLCT Holiday – Christmas Day12/25/2025ClosedHoliday
Selectboard Monthly Meet-UpTBD5:30 - 7:00 PMIn Person
Publication Date
12/09/2024

Phishing Alert - Email Masking as State of Vermont

Member for

2 years 7 months
Submitted by bwaninger@vlct.org on
cybercriminal completing a phishing attack

The Vermont Office of Purchasing and Contracting is alerting municipalities of a potential phishing attempt. The Office was informed that an existing supplier to the State received an email that appeared to be from, but was not from, the State, asking the supplier to “validate” bank account information. Please be careful to avoid possible ‘phishing’ attempts of this nature. Never provide any confidential information like bank account or taxpayer identification information unless you first verify the validity of the request through a trusted State contact.

Find strategies that help protect you against phishing attempts in It's All About Protecting the Data.

PACIF members can utilize PACIF Learn for 30–60-minute cybersecurity courses. Through PACIF Learn, employers can assign courses to any or all employees, check on their progress at any time, and run reports about the group's progress.

 

Municipal Budgeting

This annual training explains basic municipal budgeting principles, how to comply with legal requirements, and best practices for preparing the budget for town meeting. This year you’ll also learn about VLCT’s new government finance assistance, which is supported by the U.S. Department of Agriculture – Rural Development (USDA-RD). Use this webinar as you embark on your budget development process.

This recorded session has two parts described below. 

ARPA – The "Obligation" Interim Final Rule (IFR)

Member for

2 years 7 months
Submitted by kbuckley@vlct.org on
image of the U.S. Treasury bulding from an official engraving

The U.S. Department of the Treasury has issued the Obligation Interim Final Rule (IFR) to address funding recipients’ questions and comments regarding the definition of obligation. The Obligation IFR revises the definition of obligation in Treasury’s implementing regulations for the SLFRF/ARPA program and provides related guidance to give additional flexibility and clarity to recipients to support their use of SLFRF/ARPA funds. We advise referring to Treasury's two-page “Quick Reference Guide” which informally summarizes the seventeen-page Obligation IFR and Obligation IFR slide presentation.

 

FEMA Public Assistance Tips For Vermont Municipalities

  • Insurance You do not need to wait for an insurance determination before starting recovery work.
     
  • Include everything – Include everything you can think of in your damage assessments, even if you think FEMA won’t cover it. Let FEMA be the ones to decide that. Also, it is much easier to drop things from an application than it is to add them later.
     
  • “Iffy” Projects – Include them. They will not jeopardize other projects, and they might get funded!
     
  • Non-Profit Fire Departments (FDs) – If you have a private non-profit (PNP) volunteer fire department encourage them to apply for PA (not Individual Assistance [IA]).  They will likely qualify because they provide a critical emergency service to the town.
     
  • Who owns the damaged asset(s) ? – In the case of FDs, whether the FD-related expense is claimed under the FD’s PA request or the municipality’s PA request depends on who owns the asset. If the municipality purchased (holds the title to) a fire truck that it provides to a private non-profit FD, the municipality should list damages to the fire truck in its PA claim.
     
  • Municipally owned, Non-Profit operated  – Municipally owned facilities (ex. libraries, recreation facilities) are sometimes operated, overseen, and/or maintained by a non-municipal entity. If the municipality owns the facility, damages to the facility should be listed in the municipality’s PA claim and discussed with FEMA, unless there is an agreement in place that states who the responsible party for any damages is.
     
  • Non-competitive grant  – Unlike most other grants, PA is non-competitive. If you submit a Request for Public Assistance (RPA) and your project meets the criteria, you get paid.
     
  • Volunteer hours  – Track them all. These “donated” hours for Category A and Category B can count toward the municipality’s cost share.  You must track the name of person, phone number, dates they worked, and times worked as well as location, equipment used, and scope of work.
     
  • Volunteer equipment  – Track it all. Include the type of equipment and the number of hours it was used. The FEMA Equipment Rates will be applied, and it likely can be counted toward the cost share. See above.
     
  • Facility maintenance agreements  – In some communities, the municipality owns a facility (ex. recreation fields, library) and volunteers assist to maintain the facility. Having maintenance agreements in place that outline roles and responsibilities can be the difference between a successful PA claim and an unsuccessful one.

 

About PACIF Coverage and Processes
  • Question: Is there a deadline to file a claim with VLCT PACIF related to the 2023 summer flooding?

Answer: No, there is no deadline, but the sooner you report the claim the better. Payments for damage to covered property within flood zone A or prefixed with A will be prorated, and VLCT PACIF will have to know the extent of damage for all affected members before claim payments will be made.
 

  • Question: Does our insurance claim have to be settled within the FEMA 60-day scoping period to be eligible for federal assistance?  

Answer: No, it does not. You need to submit all of your damages to FEMA within the 60-day period to be eligible for assistance, but the status of your insurance claim is not part of the process.
 

  • Question: Will we receive FEMA funds prior to our insurance claim being settled?  

Answer: Yes, FEMA should begin issuing reimbursements even if your insurance claim isn’t settled. Once your claim is settled, you will be responsible to return funds to FEMA for all items that were covered by your insurer.
 

  • Question: Should we start hiring contractors and fixing our building/structures prior to our insurance claim being settled?  

Answer: Yes, you should follow all FEMA requirements and get your buildings operational prior to your insurance claim being settled. The insurance claim settlement process will take some time to close out. Contact Katie Buckley or Bonnie Waninger if you have any questions about FEMA requirements so you do not jeopardize your funding from FEMA.
 

  • Question: Does VLCT PACIF provide coverage for buildings in FEMA designated Flood Zone A or Prefixed with A?

Answer: The building and contents coverage available under the VLCT PACIF Coverage Document is subject to a sub-limit for buildings located in Flood Zone A or Prefixed with A. Each member has $1,000,000 per occurrence subject to a $5,000,000 all-member aggregate. Due to the size of this event, the aggregate cap will likely be met, resulting in prorated insurance payments. Because of the expected proration, the claim settlement process will take time. VLCT PACIF staff will need to know the total cost of the loss for all members before prorated claim payments will be issued. Covered buildings and contents that are not in a flood zone and automobiles/mobile equipment are not subject to the same aggregate cap and payments are already being made on those.
 

  • Question: How do we know if our building is in a FEMA designated flood zone?

Answer: VLCT PACIF staff are reviewing the FEMA flood maps. If any portion of the building is in the flood zone, it is being considered a flood zone property for insurance purposes. If you have questions about how your buildings are classified, please reach out to your VLCT PACIF claims adjuster. Flood map information is also available directly through the FEMA flood Map Service Center. To access that information, visit https://msc.fema.gov/portal/home. Note that not every address has digital information available, so in some cases, actual PDFs of flood maps must be reviewed.
 

  • Question : If we had a project scheduled prior to the flood, should we continue with that work?

Answer: Absent special circumstances such as the building being a total flood loss, yes. Any work that is unrelated to the flood should continue as scheduled, and it will not interrupt your FEMA funding or insurance payments.

Publication Date
11/10/2023

Subrecipient Annual Report (SAR) & ARPA

Member for

2 years 7 months
Submitted by kbuckley@vlct.org on
Grant reporting

The Subrecipient Annual Report (SAR) is required to be submitted to the Vermont Department of Finance and Management annually within 45 days after the end of your fiscal year by all subrecipients of federally funded grants. Since your local ARPA award is federal funding, you must include it in this report.  

When you are completing the Subrecipient Annual Report, you must include only the  ARPA* funds that were expended during your fiscal year for which you are reporting. Here is what you should include for your local ARPA funds:  

In Section III - Subrecipient Schedule of Federal Expenditure:

  • CFDA Number (Catalog of Federal Domestic Assistance) CFDA numbers have been replaced with ALN (Assistance Listing Number). The ALN for ARPA is 21.027.
  • Granting Agency/Department - U.S. Dept. of the Treasury
  • Grant Number - Use your assigned "Town ID" number which can be found HERE.
  • Expenditures - enter your total ARPA expenditures  for the fiscal year on which you are reporting.  (DO NOT enter the total amount of your award or the total amount of cash you've received - you report ARPA expenditures only.)

*  If you expended any ARPA funds as a "subrecipient" of a grant from an entity other than the U.S. Department of the Treasury (ex. a grant from an Agency or Department of the State of Vermont), then you must also report these funds in the Subrecipient Annual Report and do so separately from your local ARPA funds.  They will have the same CFDA/ALN Number but the Granting Agency and Grant Number will be different. 

If you received any ARPA funds as a "beneficiary," then you do not need to include these funds in this report. 

If you are unsure whether you are "subrecipient" or a "beneficiary," please read this FAQ: What is the difference between a "beneficiary" and a "subrecipient"? and if you are still unsure, then reach out to the Agency, Department or entity that awarded the funds to your town/city/village.

  • Common Subrecipient Annual Report (SAR) Questions can be found HERE.
  • Letter #1 (reminder) arrives days after the end date of your fiscal year.  A sample of this letter is HERE.  
  • Letter #2 (delinquent) arrives days after the 45-day window has closed and you are now in a "delinquent" status.  A sample of this letter is HERE.  

Reserve Funds 101

What They Are, Why They’re Beneficial, and How to Create and Manage Them
January 01, 2023

Towns decide to create reserve funds for several reasons, including to ensure specific funds are available for a specific purpose when that need arises, to provide the selectboard with flexibility in spending, and – perhaps most importantly – to prepare a town for the unexpected.  

Municipal budgeting is complex and more of an art than a science; towns can face financial hurdles that are unexpected and unpredictable. Natural disasters such as floods and pandemics come to mind. To help manage financial uncertainty, it is wise to save for a rainy day. Most municipal financial experts agree that a municipality should maintain financial reserves of at least 15% percent of annual operating expenditures. The more unstable a municipality’s revenue base, the more funds it should hold in reserve. However, VT law doesn’t explicitly authorize carrying forward any “rainy day” funds (i.e. a sum of money set aside to address revenue shortfalls or unexpected costs) or unencumbered fund balances. The general rule of budgeting in Vermont law is that money not spent in a budget year must be re-appropriated by the voters for the following year as part of the budget approval process at town meeting. Creating a reserve fund is the only legally recognized method in Vermont to provide a cushion for a town to account for unanticipated cost overruns for the year. 

Reserve funds are established by the voters at a duly warned special or annual town meeting for the purpose of funding a specific public item or project. A reserve fund can be set up to act as a “rainy day” fund to address temporary unforeseen revenue shortfalls and/or unpredicted expenditures that would otherwise require a town to borrow money, go back to the voters and send out a supplemental tax bill, or reduce its level of town services. So, instead of padding the budget with a penny on the tax rate (which is not permitted by law) or borrowing from legally restricted funds, the law gives towns this mechanism for addressing these shortfalls.  

Don’t confuse “reserve funds” with “dedicated” or “designated” funds. A “dedicated” or “designated” fund is money that is set aside by the selectboard in the budget for some specific purpose, but without any legal basis or strings attached. Unlike with a “reserve fund,” the selectboard may spend dedicated or designated funds for another purpose if the need or desire arises within the limits of their existing discretionary budget authority. 

The key elements of a reserve fund are 1) the fund’s creation, 2) the name and purpose of a fund, and 3) the method of appropriating money to the fund. A single article or two articles can be used to create the reserve fund and appropriate money to it. We have developed a Model Town Meeting Articles resource to guide you, which can be found under the “Resources” heading at the bottom of the webpage. While the reserve fund itself will continue to exist until rescinded by the voters, any funding mechanism that is approved is only in effect for the ensuing year. 

Once a reserve fund is established by the voters under 24 V.S.A. §2804(a), the selectboard can only spend money in it for the purpose(s) for which the reserve fund was established.  

The main limitation on a reserve fund is voter authorization. Once created, selectboards can use reserve funds at their discretion – without further voter approval – for the town-related purpose that the voters authorized it for, and nothing else. However, its lone limitation happens to also be its greatest flexibility: the selectboard can always go back to the voters (at an annual or special town meeting) to get their approval to use it for something other than its original purpose. 

Because the law places a reserve fund under the control and direction of the selectboard, it would be wise for the selectboard to adopt a policy for administering the fund. A policy will guide its decisions about how money will be set aside in the reserve fund, the circumstances under which reserve funds will be spent, and how to build back its reserves. Selectboards looking for a place to start can use our Model Reserve Fund Policy with Guidance resource listed last under the “Documents” heading.