By Dawn De Busk

Staff Writer

NAPLES — The Town of Naples is reporting a sizable reduction of the revenue usually brought in from interest earnings.

A town official calculated that the loss could be around $10,000 or more by the end of the fiscal year.

So far, the revenue has been $3,000 while the typical income from interest earnings is between $13,000 and $15,000, according to Naples Town Manager John Hawley.

But, there is a safety net that was designed into the budget and approved at town meeting: To offset fiscal shortfalls, the selectmen can use money from a healthy Undesignated Fund Balance. 

The budget update was provided during the Naples Board of Selectmen meeting that was held via Zoom on Monday evening. During his manager’s report, Hawley addressed the interest earnings.

“What will come as no surprise to anyone is that the interest earnings on our bank accounts have tanked,” Hawley said.

He recapped past events, which was putting out to bid the banking services when the Town of Naples chose Peoples Choice Credit Union.   

“One of the saving graces was that when we switched banks more than a year ago, our new bank offered us a really generous interest rate of 2%. So, prior to the pandemic, we over exceeded our estimated revenues on the interest and took in over $25,000 more than we anticipated,” Hawley said.  “But I felt I should make you aware that when the bottom dropped out of the banks back in March, it did not take long for our earnings to bottom out as well.” 

“At this point of this year, we have collected less than $3,000. Unless something changes, that revenue line is going to be significantly lower. I was shooting for $27,000 and I’ll be surprised if we hit $10,000,” he said. 

In March and April, the Naples Budget Committee provided a safety net in the budget. It was after the pandemic began and economic problems were being forecasted. 

Then, in June, the citizens at town meeting gave the selectmen the authority to use the Undesignated Fund Balance to replenish revenue shortfalls.

“A warrant article was approved at the June town meeting that would permit the select board to draw down up to $200,000 from the undesignated fund balance to make up for unreceived revenues. [The board] needs to call a public meeting for the purpose of letting the public know that a drawdown of some of those funds would be occurring and why. A special town meeting would not be needed,” Hawley said.

On Monday, Hawley told the selectmen that he wasn’t too worried about the likely shortfall but he was just informing them of the situation and the potential solution.

“I wouldn’t classify a $10,000 or $15,000 loss as an emergency. But, we are not going to hit our marks with our interest earnings this year.”

Selectman Jim Turpin said, “Bravo for the forward thinking.”