JAY – Auditor Ron Smith told selectmen the town is financially healthy but urged them to err on the side of caution in this economy.

The town has $7.4 million in surplus money with $6.1 million of it undesignated and $1.3 million in designated surplus for the Jay School Department.

To operate 30 to 90 days the town would need $1.7 million to $5.3 million, he said. The town has 115 days of operating money, if no other revenue was coming in.

Town Manager Ruth Marden said the town will need about $500,000 of the surplus to cover Jay’s share of the Franklin County budget when it changes from a calendar year to a fiscal year. Commissioners are working on a six-month budget to cover Jan. 1, 2009, to June 30, 2009, and then will go through a second budget process to cover July 1, 2009, to June 30, 2010.

Towns will have the option of paying for the additional six months budget over five years or to pay it all at once.

“Financially, this town is healthy,” Smith said. “That paper mill has been a great luxury for the town of Jay” but in these economic times the town needs to be prepared.

“Err on the side of caution; $6 million is all you got,” Smith said, talking about surplus.

He also noted since the town relies heavily on one industry it should probably build up its surplus account more.

Town Financial Director Lisa Bryant also explained that all of the town’s money is insured through the FDIC, and she is in the process of taking steps to be sure it will remain safe and secure and accessible when needed.

Among options the town is using is the Certificate of Deposit Account Registry Services that provides insurance on deposits up to $50 million. Those certificates are staggered so than one matures every 28 days.