[HISTORY: Adopted by the Town Council of the Town of Tolland 9-10-2019 by Ord. No. 96.[1] Amendments noted where applicable.]
This section shall be known and may be cited as the Town of
Tolland Tax Stabilization Fund (TSF) program.
The Town's general tax revenues are sensitive to economic conditions
as well as actions taken by state and federal government. Unanticipated
revenue shortfalls during a fiscal year are usually addressed through
reductions to services or increased taxes. The TSF program is established
for sound financial management and fiscal accountability and enforces
spending discipline by setting aside monies received from higher than
anticipated state revenues allocated to the Town after formal adoption
of the Town budget for the next fiscal year. The TSF program may also
reduce Town borrowing costs due to stronger bond ratings. The purpose
of the Tax Stabilization Fund is to set aside revenue in a fund which
does not lapse at the end of the municipal fiscal year, which monies
would then be available when revenue is stagnant or in decline and
may be expended to prevent large tax increases and protect against
the reduction of services in future years.
There is hereby established a fund pursuant to C.G.S. § 7-148,
Section K, which fund shall not lapse at the end of the municipal
fiscal year. Said Fund shall be known as the Tolland Tax Stabilization
Fund (TSF).
[Amended 10-10-2023]
Allocations into the fund will come from 75% of any additional state revenue received in an amount higher than anticipated in the adopted budget for that fiscal year provided that the amount of the increase is greater than $100,000 after taking into consideration known reductions in any other state or non-state budgeted revenue. This allocation shall occur at the end of the fiscal year once all other revenue sources are reviewed by the Finance Director to ensure that it meets the above allocation provision. The Town Council may, in addition, appropriate money into this account in the same percentages stated herein from fund balance and/or excess revenue from other sources upon recommendation of the Town Manager and Finance Director. The remaining 25% of the additional revenue shall be allocated to the Town's Capital Non-Recurring account (CNRE) to be used for capital projects of the Town and/or the Board of Education. Notwithstanding anything to the contrary herein, the aggregate balance in the TSF shall in no event exceed a maximum of $1,000,000. If at the end of a fiscal year the fund should exceed $1,000,000, then any excess in funds shall be transferred to the General Fund – Unassigned Fund Balance which may be allocated in the future as needed, pursuant to the Town Charter § C9-14 and abide by the Town’s Fund Balance Policy.
The TSF shall not be reduced or used for purposes other than those specifically provided for in § 46A-2 above, Purpose. During the development of the annual budget, the Town Council may authorize a transfer from the TSF to the General Fund. This transfer will be shown as a revenue line in General Fund Budgeted Revenue consistent to the extent possible with Use of Fund Balance entries. The maximum annual transfer shall be $300,000 in any one fiscal year.
The TSF shall be administered by the Finance Director. The TSF
shall only be terminated by an affirmative vote of five members of
the Town Council.
[Added 10-10-2023]
This chapter shall be reviewed by the Town Council every five
years.
