Edgartown town employees may get their cost of living increase after all this year.

A little over three months into the fiscal year, Edgartown selectmen said this week that the town’s financial position is better than expected, and as a result they will now recommend a three per cent cost of living increase for all town employees.

The news stands in sharp contrast to early last year when Edgarown led the way on recommending no cost of living adjustments (Colas) as the national recession set in.

Town administrator Pam Dolby announced in January that no municipal employees would receive Colas in the coming year amid uncertainty about where the town stood financially. Town leaders emphasized that there would be no layoffs. At the time, Ms. Dolby cited lack of funding for department budgets and fixed costs, along with uncertainty about cuts to state funding, as the reasons for eliminating the annual Colas. She did say the town might revisit the decision if the financial situation turned out better than anticipated at the close of the year on June 30.

Which is exactly what has now happened.

At the regular selectmen’s meeting Monday, Ms. Dolby reported that the town had closed the books on fiscal year 2009, and the outcome was positive, with no deficit and an expectation for plenty of free cash. The numbers are still not final, but Ms. Dolby said she expects they will be by early next week. Nevertheless, she said the town financial advisory committee has agreed to support the reinstatement of cost of living increases for employees this year.

The matter will be decided by voters at a special town meeting scheduled for Oct. 27. If the request is approved, the three per cent increase will go into effect Nov. 1.

“We all knew back a year ago or so that fiscal year 2010 was going to be a tough year,” said selectman and board chairman Arthur Smadbeck yesterday. He continued: “We didn’t know what the ramifications to the budget would be back then. What we did want to do is be conservative.

“I felt at the time that the employees went way more than halfway in meeting the town’s needs. And I thought that it demonstrated incredible loyalty to the town. I think that it’s very important for the town to follow through on its side of that equation.”

In other business this week, selectmen approved a request to transfer $4,800 from the Edgartown Housing Trust to the Edgartown Affordable Housing Committee. The committee plans to use the funds to set up a buy-down program for home owners in conjunction with Bailey Boyd Associates, a community development company that has done work throughout Massachusetts.

Affordable housing committee chairman Janet Hathaway outlined the buy-down program, which is designed to match qualified prospective home owners with properties on the market. The committee finds houses that meet certain criteria and helps supplement mortgage payments to make the housing affordable for the buyer. For instance, if the housing needs of a family exceeds its budget, the committee would match the family with a house and subsidize the difference.

Ms. Hathaway said the $4,800 will be used to help the committee design a structure for the buy-down program, which includes compiling a list of ready-to-buy homes that meet certain standards. She said the real estate transactions will take place directly between buyers and sellers; the affordable housing committee will step in only to help match the two, and to provide assistance to buyers.

The selectmen also voted to approve rules and set dates from the coming bay scallop season, as recommended by the town shellfish committee. Family scalloping will begin Oct. 1 in all areas of town, with a limit set at one struck ten-gallon wash basket per week including shells.

Commercial scalloping will begin Oct. 15 in the outer harbor and in Anthier’s, with dragging allowed only in the outer harbor and dip netting in specific areas north of Sarson’s Island.

Beginning Nov. 2, all areas of Edgartown will be open to commercial scalloping. The limit during the commercial harvest season is three struck ten-gallon wash baskets per day including shells.

Shellfish constable Paul Bagnall said it looks like a good year for scalloping in town ponds.