The Board of Finance is optional by state statute but has great financial power if established.

The Waterford finance board was established with five members when the town charter was initially approved, but in 1998 the document was changed to allow seven members. Four members were first elected in 1999 and three members in 2001.

Three members will be elected on Nov. 7.

By charter and statutes, the BOF is responsible for the budget preparation and the laying on of taxes. This has been altered slightly by the charter revision of 2011 that required all general government budgets to be approved by the Board of Selectmen before submission to the BOF.

The Board of Education does not have its budget reviewed by the selectmen before submission to the finance board.

The BOF reviews and tentatively approves all departmental budgets in March, culminating in a public hearing and final budget approval at the end of March. This allows sufficient time for the Representative Town Meeting members to review the proposed budget before the RTM budget meeting in the first week of May.

The RTM may decrease a line item appropriation recommended by the BOF but it may not increase the appropriation unless it is being appealed to the RTM by the department or the selectmen. The BOF then sets the mill rate after the RTM approves the budget.

The BOF is also responsible for arranging for the annual audit and publishing an annual report. The BOF may transfer unexpended funds from one budget line to another and also approve any special appropriations that may be needed throughout the year.

Such special appropriations must also be approved by the RTM. Fund transfers do not require RTM approval.

If a BOF is part of town government, statute places a stringent barrier for town department heads.

Funds may not be expended for activities not specified in the budget or appropriation unless the BOF recommends and the RTM approves the appropriation.

No contract expenditure “shall exceed the appropriation for the department.” There is a statutory exception if the appropriation is for repair of highways, bridges, sidewalks, water and sewer systems, and the town poor. Even here the overage limit is $1,000.

If the additional appropriation exceeds $20,000 then the RTM must also approve the new appropriation.

Each department in town is permitted aggregated additional appropriations of $4,000 approved by the BOF in a budget year without approval of the RTM. This limitation does not impact the ability of a town to approve an expenditure through the issuance of bonds.

State statute also gives the BOF the power to apportion a tax over a period not to exceed five years if “in the judgment of the board” the resulting tax is so high as “to be inconsistent with the public welfare.”

To the best of my knowledge, this power has never been used in Waterford.

The Waterford Code of Ordinances give the BOF additional authority to audit any building project and the responsibility to ensure that building committees comply with reporting requirements.

The BOF also has review authority over town vehicles.

So, if you are interested in how your tax dollars are spent, you should be interested in who is determining how those dollars are spent.

Watch for the campaign flyers and then vote for the best qualified for the BOF on Nov. 7.

John W. “Bill” Sheehan is a former Democratic Town Committee chair in Waterford.