With annual voting happening on or before March 1, there has been much discussion about the budget, proposed bonds, and infrastructure in general. Some of this information is review from prior articles.
It has been noted that the budget is increasing by 9.7% from last year. This needs to be viewed in context. The budget was reduced in FY22 below FY21 funding because of COVID factors. With non-tax revenues increasing by 17%, this budget is simply catching back up to prior service levels. The budget is only 7% higher than it was two years ago or 3.5% average per year.
More funding is being directed to or requested for overall infrastructure investment than in any prior year. In addition to the bond proposals, the city council is allocating approximately
$2.5 million in one-time funding for infrastructure and capital expenses.
The
first $1.1 million in federal ARPA (American Recovery Plan Act) funding is being allocated to infrastructure projects and equipment purchases that had been approved in the FY20 and FY21 budgets but deferred due to revenue losses. Approximately $600,000 is being allocated for road and retaining wall work. Approximately $400,000 is being allocated for delayed equipment replacement, with the balance restoring funding to the Housing Trust Fund and some smaller efforts.
The
second $1.1 million in ARPA money is being allocated to eligible activities within the funding guidelines. This is currently planned as $75,000 for community outreach; $425,000 for housing/homelessness issues, including a potential public bathroom facility; $50,000 for an electric vehicle charging station for municipal vehicles; and $450,000 for water/sewer infrastructure upgrades.
The city also has
$435,000 in money reserved from prior budgets for capital projects and expenses. These funds were held as a hedge against more substantial revenue losses. The money includes $180,000 being added to existing paving money to finally reach the targeted funding level of $750,000 to achieve and maintain proper road conditions over the long run. Another $221,000 is being allocated for equipment purchases. The remaining $34,000 is to study possible removal of dams in the Winooski and North Branch rivers.
The emphasis on capital funding doesn’t end with these items. The annual capital budget was reduced drastically in the last couple of years due to the revenue crisis.
The proposed budget would restore $223,500 to the capital plan up to a total of $2,149,165.
Additional potential projects resulting from the new federal infrastructure bill are not included, since those guidelines have not yet been issued.
The city is proposing four bonds:
1. $7,200,000 for East State Street ($4,000,000 from the general fund, $3,200,000 from water/sewer funds). The project includes complete reconstruction of East State Street from Main Street to College Street. New water and sewer lines will be installed underground. A rebuilt road base and surface as well as improved sidewalks will be installed above. A sewer overflow (CSO) issue will be corrected by installation of a new stormwater outfall. The Blanchard parking lot behind the fire station will also be improved. This project will also correct the periodic odor problem at the East State and Main intersection. Funding for the project is aided by a $1,420,000 ARPA grant.
2. $1,815,000 from the general fund for a group of infrastructure projects. These projects have been in various planning and design phases in recent years. They include:
- $600,000 for Confluence Park.
- $550,000 for the Main Street and Barre Street intersection
- $250,000 for street lighting upgrades.
- $250,000 for a pellet heating system at the DPW garage.
- $165,000 for Marvin Street slope repair.
3. $2,000,000 to purchase the former Elks Club property for future recreation use. This proposal has created the most discussion. The city is proposing to purchase the land and buildings at 203 Country Club Road. If the bond passes, the city will embark on an extensive public planning exercise to determine the future of the parcel. It is anticipated, however, that housing will be the top priority followed by a new community center. It is anticipated that this project will be done in conjunction with a private non-profit group called The Hub, which seeks to create some recreation facilities.
The need for housing at all price points is well known. The city’s recreation center on Barre Street has significant problems, including lack of accessibility, terrible HVAC systems, and asbestos throughout. Renovating this building for modern recreation use will cost at least $6 million while retaining the existing footprint restrictions and lack of parking. A potential recreation center at the Elm Street rec complex (pool/fields/courts) also has size restrictions and competes with the existing facilities for space and parking.
4. $16,400,000 from the sewer fund for improvements to the water resource recovery facility (known by many as the sewer treatment plant). Our recent upgrade modernized the plant, made it energy efficient, and created the ability to accept and process commercial organic (food) waste, which generates revenue. This new process resulted in increased methane production to meet all of the plant’s heating needs.
The primary purpose of this bond is to use methane to dry residuals — known as biosolids or “sludge.” This will greatly reduce the number of costly and environmentally unfriendly truck trips between Montpelier and Coventry. It will also update all of the remaining aging infrastructure in the plant. A much smaller financial portion of this project is to fix the much stronger smells coming from the plant and address a state-issued correction order.
Required first year payments for the proposed bonds have already been built into the full budget.
What is a Bond?
A bond is a loan, used for long-term financing, typically 20 years. The general rule of thumb being that the term cannot exceed the useful life of the equipment or project (up to 30 years). Bonding is used for roads, bridges, sidewalks, streetscapes, water projects, sewer projects, energy efficiency projects, and equipment.
What Does it Mean if I Vote Yes at Town Meeting?
This action authorizes borrowing for the above-mentioned items; it is the first step to securing bond funding. It is, however, conceivable that if authorization is granted, debt may not be incurred if a project does not move forward. For budget purposes, interest and principal payments are estimates based on current information for voters to consider. This will not be “officially” set until after voter authorization, the project is underway, rates are locked in, and the bond is issued.
The accompanying spreadsheet illustrates estimated debt service for the city from FY22–FY26.
Thank you for reading this article and for your interest in Montpelier city government. Please feel free to contact me at wfraser@montpelier-vt.org or 802-223-9502 with any questions, comments, or concerns.
UNDERWRITING SUPPORT PROVIDED BY
