GuidelinesThis year’s budget presented challenges because of the fiscal impact and uncertainty caused by the COVID-19 pandemic and unpredictable economic recovery. The leadership team approached the budget with the following guiding principles:
- Implement Strategic Plan.
- Rebuild from FY22 COVID-19-related cuts.
- Deliver responsible services.
- Address challenges with revenues.
- Stay within 6 percent inflation rate.
Key Budget FactorsThe following major factors impacted the budget.
- Past demand for infrastructure and equipment due to COVID reductions.
- The presence of ARPA funding and a one-time infrastructure reserve.
- Clear direction from the city council about priorities.
- Implementation of collective bargaining and personnel plan adjustments.
- Rebounding but not fully recovered revenue sources.
- Higher inflation rate than in recent years, as documented through the Consumer Price Index (6.2 percent) and Social Security (5.9 percent)
Property Tax Impact
- The net result of revenues and expenses is that $10,905,596 in property tax revenues are required for the municipal portion (non-school) of the budget. This is an increase of $508,444 (5.0 percent) from FY22.
- Requires a 6.4 cent (5.45 percent) increase in the property tax rate. For the average residential property, this tax rate represents an increase of $145 on the tax bill.
- FY23 General Fund budget totals $15,975,320, which is an increase of $1,268,726 (8.6 percent) from the comparable FY22 spending plan.
- FY23 General Fund non-tax revenues total $5,008,365, which is an increase of $760,282 (17.9 percent) from FY22 non-tax revenues.
InfrastructureThe Capital Projects, Equipment, and Debt Service Program is funded at $2,149,165. This is an increase of $223,506 (11.6 percent) from FY21. Of this, $1,073,500 is in annual funding, $716,117 is in existing/projected debt service, and $359,548 is for equipment. Although this is an increase from last year, it remains $225,000 below our pre-COVID target. The Capital Projects, Equipment, and Debt Service Program is supplemented with ARPA funding, one-time capital-reserve funds, and significant bonding. The city has received $1.1 million in American Rescue Plan Act (ARPA) funds to date and will receive another $1.1 million in 2022. The initial group of funds fall within the lost revenue category and are proposed for projects and equipment that had been approved in the FY21 and FY22 budgets but deferred when COVID hit. The second group of funds is proposed for some specific uses addressing strategic plan priorities. Due to project deferrals and other budget reductions, the capital fund has an unusual reserve of about $430,000. These funds are also proposed to be used for delayed projects and equipment. Bonds totaling $27 million ($7.3 million general fund, $19.9 million water/sewer funds) are being proposed. We have currently recommended them in five “bundles.” Bonding is proposed for East State Street, purchasing recreation land, the Barre/Main intersection, street lighting, DPW garage heating (net zero priority project), the Marvin Street retaining wall, Confluence Park, and the final upgrades to the water resource recovery facility (WRRF). Anticipated debt service payments for these bonds have already been built into the FY23 budget. More detailed information about bond proposals will come later.
PersonnelAll city staff positions are fully funded in the FY23 budget. Six full-time-equivalent positions were held vacant in the FY22 budget but are restored this year. Cost-of-living allowances, step increases, and base wage adjustments are built into all employee wage and salary accounts consistent with collective bargaining agreements and personnel policies. For this budget that represents 2.5-percent adjustment for all non-union employees, 2.25 percent for Fire Union, 2.0 percent for Police Union, and 2.0 percent for Public Works Union. The budget continues the high deductible health insurance plan that was implemented eight years ago. We are fortunate that the city’s health insurance rate dropped by 5 percent for 2022. We have budgeted for a net 4.8-percent increase for the full FY23.
Other ServicesAfter struggling with funding in these areas last year, most appropriations are being returned to FY21 levels:
- $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 with $4,500 for July 3 and other celebrations.
- Montpelier Energy Advisory Committee remains at $5,000.
- Social Equity consultant remains at $10,000.
- The Green Mountain Transit My Ride system remains at $40,000.
- The budget includes funding for the monthly Montpelier Bridge article.
- Housing Task Force is fully funded at $110,000.
- Homelessness Task Force remains funded at $45,000.
- Public Arts Commission is funded at $10,000 ($20,000 in FY21, $0 in FY22).
- Capital Area Neighborhood services are funded at $10,000 (down from $20,000 in FY22).
Other Key Items Included
- Expansion of Social Worker program to work with police.
- Body-worn cameras for police.
- Most recommendations of the Police Review Committee.
- $50,000 for economic development.
- ADA Transition Plan items.
- Additional street paving funds.
- Website upgrade/public communications.
- Public restroom funds.
Items Not IncludedWhile developing the budget within the financial target, several items were given consideration but are not part of this proposal.
- Central Vermont Public Safety Authority.
- Petitioned ballot items.
- Potential Use of Federal Infrastructure Bill funds.