PHILLIPS — Voters on Saturday will make several critical decisions about the future of their town government.

The annual town meeting will begin at 9 a.m. at Phillips Elementary School. After electing a moderator, a school board director, a town clerk and one selectman from the floor, townspeople will decide whether to continue with a town manager form of government.

The town’s first manager, Laura Toothaker, retired in 2007 at the age of 86. Over the next three years, Phillips saw three managers come and go. Karen Olivieri, who replaced Toothaker, accepted a position as tax collector in her hometown of Rangeley. Lynn White, a retired construction engineer, took the position but left because of urgent family health issues.

Selectmen then hired James Collins, who resigned unexpectedly before last year’s town meeting. Interim Town Manager Elaine Hubbard, who also serves as tax collector and treasurer, registers motor vehicles, does the payroll and performs other town services, currently reports to three selectmen.

Many meetings and hearings helped selectmen narrow choices for voters. A yes vote will eliminate the town manager position at the 2012 town meeting. Administrative authority will go to the Board of Selectmen, which may include appointing the treasurer and tax collector and the town clerk.

Voters also may decide Saturday that those three positions should be elected. Other articles include voting on an ordinance that would allow citizens to recall elected officials.

The budget is in good shape, Hubbard said.

“We’re under (the allowable increase, based on state law) at $944,000, and the less than 1 percent increase over last year’s budget is because fuel prices have gone up so much,” Hubbard said.

Since all articles are approved from the floor, the final budget can be increased or decreased by voters. Part of the town’s financial concerns stem from unpaid taxes, which place an extra burden on those who pay regularly. Collection costs can be expensive, Hubbard said, and although selectmen can begin foreclosure proceedings, some taxpayers will pay just enough at the last minute to stall that process.

“We sent out 260 overdue notices by certified mail at $5.59 apiece, so we spent $1,453.40,” Hubbard said. “Trying to collect unpaid taxes takes a lot of time.”

Hubbard anticipates receiving more than $459,000 in state revenues, but no money will be taken from surplus funds to reduce the taxpayers’ burden, he said.