Chilmark will hold a special town meeting next month to stave off the possibility of a deficit on the cusp of the new fiscal year. 

The select board voted unanimously Tuesday to hold a single-article town meeting on June 29 in order to free up already allocated funds to cover cost overruns related to lawsuits and snow removal. 

The warrant will ask residents to transfer $200,000 to the town’s reserve fund. The first $100,000 would come from free cash and the second $100,000 was previously dedicated to the replacement of school windows but was never used. 

Town accountant Sarah Smith said the town’s finances are not in a crisis and the budget might be able to absorb the deficit without the extra reserve funds. But with a month left in the fiscal year and the possibility of a shortfall looming, the town wants to make sure the money is available for unanticipated expenses. 

“It’s very close,” Ms. Smith said Tuesday. “It’s a good way to make sure we end in a good place.” 

The article is not asking to raise any new money, town officials pointed out at Tuesday’s select board meeting. The money was already approved by the voters in the past, but needs voter approval to be moved into the reserve fund. 

Passage at the special town meeting would mean the existing funds could be used to pay the bills and keep the books balanced ahead of fiscal year 2027. 

The town’s biggest unexpected expense this year was in legal fees for an active lawsuit. A Menemsha homeowner sued the board of health for denying them a disposal works permit, which would have allowed them to construct a septic system for a proposed three-bedroom home. 

The property, 0 Chockers Lane, is in the coastal district on Menemsha Pond. The owners want to sell the property at market value as a developable lot, said town administrator Tim Carroll.

“The board of health didn’t make a willy-nilly decision to deny the applications, it was based on the advice of counsel,” select board member Matt Poole said Tuesday. 

Counsel billed the town for more than $200,000 in legal fees this year, more than three times the $65,000 budgeted. The legal bills came in too close to the annual town meeting to add to the warrant, and the town estimates paying an additional $60,000 in current legal fees associated with the lawsuit.

The town also spent $62,000 more than budgeted on snow and ice expenses this year, which consists of mostly plowing fees, and an additional $10,000 in storm-related tree removal at the cemetery. 

New select board member Rebecca Haag encouraged the finance committee and select board to review the budget on a quarterly basis to prevent issues that may require special town meetings, especially so soon after the annual. Finance committee chair Linda Coutinho said the group is in the process of forming a subcommittee to “figure out our process.” 

“I guess my concern about this is that the first that this was raised was just in the last two weeks,” said Ms. Haag on Tuesday. “We just went through an extensive town meeting, we presented a budget for next year. We never said anything about a potential problem this year. We never made the town aware at all.” 

Mr. Carroll said that legal expenses in the budget were based on projections, and the town only received the actual bill in April. 

“The big issue is we don’t want to end the year on the books in a deficit,” said Mr. Carroll. “While we can cover it, it then affects our bond rating and makes it more expensive to operate in the future.” 

The special town meeting will be held June 29 at 7 p.m. at the Chilmark Community Center.