If you are starting to think about your 2021 budget, you might like to know a way to get a little more money.
The Department of Local Government Finance provides Form 4b, which allows you to calculate the funds available for the coming year.
One item you must take into account is the current year unspent appropriations (Line 2 on the old Form 4b and Line 5 on this year’s new Form 4b).
That makes sense. Usually, if the money is appropriated to be spent this year, you should not use it for next year’s budget.
However, most years, your township does not actually expend its full budget. Now that we are half way through the 2020 budget year, you may know of items in the 2020 budget that you are certain will not actually be expended or encumbered.
For example, if your township had a vacancy in a job position, the personal services appropriation for 2020 for that position will not be fully expended, even if the vacancy is filled part-way through the year.
A trustee can put in writing that certain 2020 appropriations will not be expended. Ideally, a board resolution should be obtained to confirm it. If your township sends this paperwork to DLGF, they will usually allow a lower amount on Form 4b for current year expenditures (Line 2 on the old form and Line 5 on the new). That will result in a higher amount available for next year (Line 1 on the old Form 4b and Line 15 on the new).
If, for any reason, DLGF denies the adjustment, they may cut your 2021 appropriations by that amount, but don’t worry. The unspent funds will be in the fund balance in January, and they can be appropriated next year by board resolution.