VERNON -- In a surprise move, town voters late Tuesday slashed funding for the Vernon Police Department in the next fiscal year, leaving only enough cash to seek outside law-enforcement coverage.

The vote came as officials and residents debated the fiscal year 2015 budget, which takes effect July 1 and had included $302,095 for the police department.

But, amid talk of tough decisions due to the pending closure of the Vermont Yankee nuclear plant, voters proposed an amendment cutting that allocation to $40,000 -- and directing the Selectboard to hire either the Vermont State Police or Windham County Sheriff's Department to take the place of local officers.

The amendment was approved on a 118-112 paper-ballot vote, the results of which led some in the audience to gasp. Moments earlier, Vernon police Sgt. Bruce Gauld had warned voters that eliminating the local department would lead to fewer and slower police responses.

"Make an informed decision," Gauld said. "If that's the kind of service you want, then OK."

But others had pushed for the change, saying the town doesn't need full-time police coverage.

"I am wholeheartedly in favor of this amendment. This is something that needs to be done," resident Josh Unruh said, adding that, "I don't think it will lead to an increase in crime."

Residents debated Vernon's budget for about two hours Tuesday night before approving it via voice vote at $1,850,690. That represented a reduction in the Selectboard's proposed budget of $2,106,609.

Much of that reduction came via the police changes, which will force Selectboard members to seek a law-enforcement agreement with an outside entity.

Residents were in a budget-cutting mood: Earlier, a majority of voters rejected a move to restore funding for the town auditors, who had their wages drastically reduced by the Selectboard in favor of an outside audit.

Selectboard members have argued that the auditors' change and other cuts are necessary with Yankee's closure coming.

"We can't continue to do business as usual and survive," Selectboard Chairwoman Patty O'Donnell said. "I want people to understand how serious this is."

Tuesday's edition of Town Meeting was cut off just after 10 p.m. with much still left undone. Voters and officials will reconvene at 6 p.m. Wednesday at Vernon Elementary.

On Monday, the first night of Vernon's Town Meeting, voters paved the way for the town to switch to a "pay as you throw" trash-collection system.

The change will be mandatory under a new state law by July 1, 2015. But Vernon is switching a year earlier.

That allowed the town to take $135,000 currently earmarked for curbside garbage collection out of the budget, since property owners will fund pay as you throw via mandatory stickers on each bag of trash they place at the curb.

The price of those stickers has been estimated at $3.30, but officials warn that they have not yet finalized that figure and other details of a program that will begin July 1.

"Before all this goes into effect, we will do a mass mailing and you will all know what to do," Selectboard member Sandy Harris said.

The program is designed to encourage recycling, since there is no sticker required for curbside pickup of recyclables.

Also on Monday, voters rejected a request from Vernon Town School Board to discontinue use of Australian Ballot voting to approve the school budget. Board member Mike Hebert said voting on the budget from the floor at Town Meeting allows for better communication between the school board and the public.

But there were concerns about losing the confidentiality that Australian Balloting provides, as well as the greater access it affords: It is much easier to swing by the polls sometime during a 12-hour window, the argument goes, than it is to attend Town Meeting.

Voters requested a paper ballot to decide on the school board's request, and it was rejected by a 174-86 tally.

Results of the town's Australian Ballot voting were announced late Tuesday evening, including:

-- The proposed $4.4 million Vernon Elementary School budget for fiscal year 2015 was defeated on a 265 to 257 Australian Ballot tally. "A special meeting will be needed for another budget vote," said Tim Arsenault, town moderator.

-- Selectboard members Chris Howe and Jeff Dunklee retained their seats, defeating three challengers.

Mike Faher can be reached at mfaher@reformer.com or 802-254-2311, ext. 275.