GuidelinesThis year’s budget presented unique challenges due to the fiscal impact and uncertainty caused by the COVID-19 pandemic. The leadership team approached the budget with the following guiding principles:
- Close major budget gap due to COVID-19.
- Deliver responsible services.
- Implement Strategic Plan as possible.
- Pandemic impact would be viewed in a one-year horizon.
- Considerations for residents and businesses financially hurt by COVID-19.
Key Budget Factors
- A $1.44 million budget gap necessitated a different approach.
- This fiscal year contained a 27th pay period (most years have 26, the 27th occurs once every 12 years). This explains why personnel costs in most departments seem high.
- The heavy loss of parking revenue required $525,000 in reallocations of personnel costs from the parking fund to the general fund. This also adds to general fund personnel costs in those departments.
Property Tax ImpactFor tax rate planning purposes, the budget assumes an independent ballot item for the Kellogg-Hubbard Library at their requested amount. The Council has also approved a $23,500 ballot item for Central Vermont Home, Health, and Hospice.
- The net result of revenues and expenses is that $10,378,512 in property tax revenues are required for the municipal portion (non-school) of the budget and the ballot items. This is a slight increase of $41,322 (0.4 percent) from FY21.
- Requires a 0.5 cent (0.4 percent) increase in the property tax rate. For the average residential property, this represents an increase of $11 on the average tax bill.
- The FY22 General Fund Budget totals $14,686,595, which is a decrease of $391,695 (−2.6 percent) from the comparable FY21 spending plan.
- The FY22 General Fund non-tax revenues total $4,248,083, which is a decrease of $433,017 (−9.3 percent) from FY21 non-tax revenues.
- Consistent with the Council’s fund balance policy, no general fund balance is used to offset the budget and reduce taxes.
- Revenues from the State of Vermont such as Highway Aid and Grand List Maintenance funding have been assumed to remain at their present funding levels. Payment in Lieu of Taxes (PILOT) revenue was adjusted down by $230,000 to protect against state revenue losses. Local Rooms, Meals, and Alcohol tax revenues were adjusted down by $67,000 to reflect the downturn in business in local restaurants and hotels.
- Grand list value was held the same as the FY21 level with no additional property tax revenue raising capacity. With the projected Grand List, $87,483 represents one cent on the tax rate.
- The Capital Projects, Equipment and Debt Service Program is funded at $1,925,649. This is a reduction of $474,341 (−19.8 percent) from FY21. Of this $866,427 is in annual funding, $590,183 is in existing/projected debt service, and $469,049 is for equipment.
- The Capital/Equipment Plan had reached the targeted total to bring funding levels to a projected steady state of maintenance and improvements and accommodate the new bond proposals. The FY22 reduced proposal is in direct response to COVID-19. If things return to “normal” and revenues return, we will restore funding in this area. After FY22, we will return to steady-state funding, consider annually adjusting equipment and/or capital funding consistent with CPI and look at a possible short-term bond to catch up from these years of cutbacks. The Capital Plan includes funding for the acquisition of 12 Main Street, a new City Hall elevator, and an upcoming property reappraisal.
- The total number of Full Time Equivalent Employees (FTEs), is 119.65, however 6.0 FTE positions are being held vacant in the FY22 budget. Positions kept vacant are one police officer, one finance department account clerk, one DPW engineer, one DPW street worker, and two Recreation Department maintenance workers.
- As with prior years, many lines have been held tight to stay within fiscal guidelines. Operating expenses are reduced by $110,603 (−3.2 percent). Department operating budgets remain very tight after multiple years of reductions.
- Police: This budget retains the social worker housed in Washington County Mental Health Services, shared with the City of Barre and partially funded with grant money. The police budget continues the contractual relationship with the Capital Fire Mutual Aid System for dispatching services. The Police Department continues sharing administrative support with the Fire Department. One police officer position is held vacant.
- Fire and Emergency Services: Paramedics continue being successfully integrated into the department. Emergency management funds have been increased slightly to provide for additional preparation training.
- Planning, Zoning and Community/Economic Development: The Planning and Development department budget has been left largely unchanged.
- Public Works: DPW holding one engineer and one street position vacant. They are focusing on implementing the stormwater master plan, completing the major upgrade to the Water Resource Recovery Facility, the Montpelier in Motion transportation plan, and the new parking garage.
- Government Services: The Finance and Manager department are holding one finance position vacant.
- Community Services: The budget continues implementing the Community Services department plan, which consolidates work between the Senior Center, Recreation, and Parks/Tree departments. The combined tax appropriations for these three functions is decreased by $125,000 from FY21. This decrease is mostly due to the retirement of two full-time Recreation maintenance positions, which are held vacant. Parks staff will assist with summer field maintenance as an interim measure until revenues return.
- $131,050 for the Community Fund.
- $50,000 for the Housing Trust Fund (down from $110,000).
- $45,000 for the Homelessness Task Force.
- $60,000 in funding for the Downtown Improvement District is shown in the budget as both expense and revenue.
- Montpelier Alive is funded at $32,600, although $7,500 for July 3rd and a fall celebration have been removed.
- $5,000 for the Montpelier Energy Advisory Committee.
- $10,000 for Social Equity and Justice Advisory Committee.
- $40,000 for the new GMT MyRide program.
- $0 for the Montpelier Development Corporation (down from $100,000).
- $0 for the Public Art Program (down from $20,000).
Items Not Included
- Central Vermont Public Safety Authority.
- Petitioned ballot items.
- 55 Barre Street improvements ($6 million).
- LED street lighting in downtown ($140,000).
- Citizen Survey (3-year funding) $5,000.
ConclusionI appreciate the hard work of our management team and all city employees. This budget is a team effort from start to finish. The department heads worked diligently to meet our budget goals. I would like to particularly recognize the efforts of Finance Director Kelly Murphy, who bears the greatest brunt of this effort. We have not previously worked on a budget in an environment like this. There are many challenging decisions to be made. Thank you for reading this article and for your interest in Montpelier City Government. Please feel free to contact me at 802-223-9502 or email@example.com with any questions, comments, or concerns. Paid for by the City of Montpelier.
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