FARMINGTON — Town officials and residents discussed at Thursday’s Select Board meeting the potential shift in its fiscal year from the calendar to a July-to-June system for the town budget process.

Town Manager Erica LaCroix said using a fiscal year is standard practice and offers better budgeting accuracy.

She highlighted the challenges of the current system in her one-year anniversary report in December, where the budget year begins in January but the first tax payments are not collected until November. This requires the town to rely on reserve funds for daily operations during the first 10 months of the year, delaying project and capital spending until at least April.

“Tax year in the state of Maine always starts April 1,” she said. “It doesn’t matter what budgetary system your town is on. That’s when values are set. That allows all of our real estate agents to know how taxes are going to be split up for the year. It’s not something that we can change.”

LaCroix also pointed out cash-flow issues, noting that the town only collects taxes once a year in November. This creates a financial gap, forcing the town to use reserve funds or borrow money, as it did last year by taking money from the sewer account to pay bills.

She said few towns still use the calendar year, with many relying on funding from entities that use the fiscal year system.

LaCroix said transitioning to a fiscal year could be accomplished through a short-term six-month budget covering January through June, followed by a full 12-month budget beginning in July.

Taxes for the six-month budget would be due in spring, while the full-year budget would have payments split between fall and spring. This change would not raise taxes but would provide money sooner and allow for reserves to be invested.

Selectman Byron Staples said the bill could be paid in full when received, if desired.

Selectman Dennis O’Neil said the town should operate like a business and plan ahead. He noted the importance of maintaining a three-month operating capital balance, as advised by auditors.

Several residents shared concerns about changing to a fiscal year.

Attorney Paul Mills warned that the shift could result in a significant tax burden for residents, because they would pay two sets of taxes within a year. He also expressed concerns about the impact on cash flow and the risk of investing tax revenue too early.

“If we go to the July 1 fiscal year, that would mean that half the $12 million tax commitment would be paid six months earlier than it is now,” Mills said. “A $575,000 problem, however, should not require a $6 million solution.”

Resident Bill Crandall suggested that interest earned on taxes be directed into taxpayer accounts, while Craig Jordan, a local business owner, raised concerns about the timing of tax payments, particularly for those with seasonal or variable income.

Jon Bubier, owner of Ron’s Market and other properties, said money comes in the summer. Wilton uses fiscal year that sends out one bill for taxes with two tabs in it and paying the second half can be overlooked, he said.

Selectman Richard Morton said those he has spoken with would rather have two bills, it would be easier to pay two small bills.

Erik Johnson of Sandy River Farms said spring is when he buys most supplies. His crops are a gamble, he doesn’t know how much he will get for them until late fall. The past five years he has had to pay interest. The farm provides free access on its land. It can be shut down and charging for access started, he noted.

While sympathetic to farmers and others, LaCroix said, “It’s not my will, it is up to the board. There is no perfect answer. We are just discussing at this point.”

Select Board Chairman Joshua Bell said valid points had been made and he wanted to stay with the current system until after the revaluation was completed.