The Bedford Town Council discussed switching to a fiscal year at its Oct. 28 meeting.

No decisions were made, and the council will discuss the issue again later in the year.

The switch would take the town from a calendar that runs January to December to one that runs July to June. The town’s school budget and the state budget both run on a fiscal calendar.

With a calendar year, the town meeting in Bedford, held in March, is three months after the beginning of the budget year. Taxes are collected in arrears, six months after the start of the budget year.

With a fiscal year, the town meeting could remain in March, or be moved back to May, and the budget would still be formally adopted before the budget year begins, eliminating the months of expenditures the town now goes through before they can bill and collect taxes.

A fiscal year would also help with cash flow in the town, since the government would no longer need to “float” unreserved funds while awaiting tax revenue, Town Manager Russell Marcoux said.

Crystal Dionne, finance director, said just as a person would not spend money they did not have in their bank account yet, the town should try to avoid spending tax revenue before it is received and before a budget is finished. She said most towns of Bedford’s size operate on a fiscal year.

“Changing to a fiscal year is important to the stability of the town,” she said. “It’s very unusual for a community our size with a budget our size to have a calendar year, to collect taxes in arrears.”

The biggest concern that emerged last night was how to fund the town for January through the end of June in the year of transition.

During the change period, the town would need to bring taxes in arrears up to date, and collect the taxes in advance, which would significantly increase that year’s tax rate, Marcoux said.

If the council decided to make the change, it could bond the six-month transition period and repay it over a sixyear or a 10-year term, which could get expensive, he said.

Another option would be to collect one 18-month budget in a 12-month period, which would require enabling legislation from the state, he said.

If the town did not change over quickly, the cost can be spread out, Marcoux said; they could transition five years from now, and collect an extra month’s worth of the budget for each year until then to be saved.

Town Councilor Michael Scanlon suggested that instead of putting that money away, the town could use it for a 13- month budget for five years. This would push the budget back further each month until they were at the July goal, when they would start collecting a 12-month budget on a fiscal year schedule.

Dionne said the town was lucky it had not had to send out tax anticipation notices yet to hold the town over as it waits for tax revenue, but it could have to in the future if taxes continue to be collected in arrears.