At the March Selectboard meeting and Town Meeting, a few questions came up about how Elmore pays for major equipment — like trucks, graders, and fire engines — and how our reserve funds work. These are smart questions, and answering them helps all of us understand how we protect Elmore’s financial stability.
What is the Highway Equipment Reserve Fund?
Think of it like a savings account for big, necessary purchases. The fund helps us avoid borrowing money and paying interest when we need to buy or replace essential highway equipment.
Every year, the Selectboard proposes — and voters approve — adding a set amount to this fund. Over time, it builds up. Then, when the town needs a new truck or grader, we can often pay in full — or at least pay down a large portion — using this reserve, significantly reducing or eliminating the need to borrow.
This fund is not “extra money” — it’s financial planning. And it’s working.
Combining Savings with Borrowing
In some cases — such as the purchase of a fire engine or a new grader — we might still take out a small loan. However, by using the reserve fund to cover part of the cost, we reduce the amount we borrow, saving taxpayers money by minimizing interest and shortening loan terms.
Even when borrowing is necessary, Elmore leverages reserve funds to lessen the impact.
Separate Funds, Separate Purposes
Elmore maintains a Highway Reserve Fund, a Highway Equipment Reserve Fund and a Fire Department Equipment Reserve Fund:
- The Highway Reserve Fund is used for general road-related capital needs — like culvert replacements or major repair projects.
- The Highway Equipment Reserve Fund and the Fire Department Equipment Reserve Fund are strictly for equipment purchases by each department respectively.
Funds can be moved from the General Fund into these reserves — but not the other way around. This protects long-term capital planning from being undermined by short-term budget needs.
Ready for Emergencies
This came up at Town Meeting — and it’s a critical point.
When storms hit or roads are damaged, must pay for repairs immediately, often long before FEMA reimbursement arrives. It can take months or years to get reimbursed. We also have to front the cost for grant-funded work like culvert replacements — sometimes $100,000 or more.
To manage this, Elmore keeps some funds liquid — accessible right away — while also investing other portions for higher returns. This strategy, guided by our Town Treasurer, balances growth and readiness.
Capital Equipment & Reserve Fund: Quick Q&A
Q: What is the Highway Equipment Reserve Fund?
A: It’s a savings fund used to purchase large pieces of highway equipment — trucks, graders, backhoes — so the town can avoid or reduce borrowing and save on interest.
Q: Do we still borrow money sometimes?
A: Yes — for very large purchases, like a grader, we might borrow part of the cost. But by using the reserve fund, we borrow less, pay less interest, and shorten repayment periods. That’s smart financial leverage. Same for the Fire Department, their equipment reserve builds over time for future equipment purchasing needs.
Q: Are reserve funds just sitting around unused?
A: No. They’re actively saving the town money. Some of the funds are invested to earn more, while enough is kept liquid for emergencies or matching grants.
Q: What’s the difference between the Highway Reserve and Equipment Reserve?
A: The Highway Reserve Fund is for road projects. The Highway Equipment Reserve Fund is only for buying highway equipment.
Q: Can we use Equipment Reserve Funds for other expenses?
A: No. Once money is in this reserve fund, it can only be used for its intended purpose. You can’t move money back into the general fund or general reserve once it is earmarked for equipment.
Q: What is being earmarked in the budget for the Highway Equipment Reserve Fund this year?
A: The town voted in March to increase the annual contribution to this fund from $35,000/year to $55,000/year. This increase was recommended by the Select Board in anticipation of several significant equipment purchases anticipated in the next 5 – 10 years and in light of this year’s purchase of the new Western Star 47x dump truck. This new dump truck was planned for and purchased from a combination of the Equipment Reserve ($223,777.36) and the Highway Reserve ($72,129.64) without borrowing funds.
Q: What if there’s an emergency — like flooding or a culvert failure?
A: The town covers the cost up front — often before FEMA or grant funds arrive. That’s why we maintain liquid reserves: to respond quickly, without delays.
Q: Who decides how much to set aside each year?
A: The Selectboard proposes annual reserve contributions in the budget, and voters approve them at Town Meeting.
Q: How can I learn more or ask questions?
A: Attend Selectboard meetings on the second Wednesday of each month at 6:00 PM. Join via Zoom:
📞 Meeting ID: 677 090 6765 | Passcode: 8888 | Phone: +1 (646) 558-8656
Meeting minutes and recordings are posted at www.elmorevt.org.
New! Community Q&A Initiative
We’re now publishing regular Q&As to explain and clarify questions raised at Selectboard and Town Meetings. This helps bring the conversation to all residents — even those who can’t attend — and strengthens transparency and trust.
Have a question? Bring it to a meeting, or email us. We’ll answer it — and share it.
— Elmore Selectboard