Although revenues exceeded expectations in last year’s budget, and 52% of respondents to a city survey said they do not want property taxes increased, the Montpelier City Council considered a proposed fiscal year 2024 budget last week that came in $1.2 million higher than this year’s. If approved by council and voters, the budget could increase property taxes by 7.4%.
The council will revisit this budget at its Dec. 21 meeting at 6:30 p.m. before holding two public hearings about it in January.
“A target above inflation is uncomfortable to defend,” said councilor Cary Brown. “I might be interested in suggesting to get it down a little bit,” she added.
“Whatever the inflation rate is at the moment changes,” councilor Dona Bate said. “… it had been 7.7 — now it’s 7.1 — who knows what it will be by town meeting — I feel comfortable with that, or maybe even higher, if we find some need we need to increase …”
City Manager Bill Fraser presented the budget. He pointed to the goals behind it, which he said are to “implement the strategic plan, retain and stabilize staffing levels, continued investment in infrastructure, deliver responsible services, and stay within 7.7% inflation rate.” (The inflation rate has gone down to 7.1% since he developed the budget).
The proposed budget requires nearly $11.5 million in property tax revenue, ($819,821 over last year) and a 9.34-cent (7.4%) increase in the property tax rate, an increase of $212.94 for the average residential property of $228,000, Fraser said. The proposal also assumes water/sewer rates will increase 8.7%. Water and sewer rates increased by 8.1% last year. If the council approves the budget as written, and voters pass it in March, residents will see a total 16.8% increase in water/sewer user rates over two years, in part for upgrading water pipes as part of a 50-year master plan to fix the city’s aging, leaking water system.
Increased line items in salaries added to the budget, including an additional $121,522 for salaries in the police department, plus an additional $67,978 for police overtime. Fraser said the city has beefed up personnel expenses in general after having been short staffed last year, such as an added $93,600 for public works fleet operations among many other salary increases.
In the water fund, $244,975 was added in expected revenue from water user fees, from $2,815,800 to $3,060,775, along with increases in salaries.
Fraser expressed a concern that the city has taken on more debt, which negatively impacts money available for capital improvements. The debt service “almost doubled” from FY23 to FY24, he said, from $716,117 to $1,144,695.
Councilor Jack McCullough said he heard from residents that maintaining Montpelier’s road and water systems is critical. “Inflation is a factor that we can’t disregard and maintain needed services,” he said.
Councilors also pondered the skyrocketing costs of “Confluence Park,” from an initial estimate of $1.2 million (shared between grant funds and the city), to a current estimate of $3 million. Fraser recommended the council wait to decide whether to keep or scrap the park until seeing a design that’s nearly complete.
Mayor Anne Watson asked if a decision about whether to go forward with the park or not should be made as part of the budget discussions.
“The only decision you have to make is to rework that ballot item to make it more flexible — assuming it passes, (it) can decide the fate of the project,” Fraser said.
A council budget workshop is planned for Dec. 21 at 6:30 p.m. If needed, another budget workshop will be held Jan. 4, Fraser said, followed by two public hearings about the budget — one on Jan. 11 and a final hearing on Jan. 25 — after which the council is expected to make a final decision. The budget will then be decided by voters on Town Meeting Day, March 7, 2023.
To see agendas and login information for budget workshops and hearings, go to montpelier-vt.org/129/Agendas-Minutes.
City Budget Survey Results
The city of Montpelier surveyed 268 residents about the city budget. The majority of respondents — 52% — said they do not support increasing revenues through increased taxes and fees, and 44% said that some department budgets should be reduced, although the survey did not go into detail about which departments or why.
Asked “Do you support the current budgeting of government services in Montpelier?” only 17% said yes; 44% said no, some departments’ budgets should be reduced; and 17% said yes, some departments’ budgets should be increased. Twenty-seven percent said they didn’t know.
One hundred fifty-four respondents left comments and suggestions. Out of these comments, some patterns emerged. We broke them down by topic. The top five topics are below, and a sample of comments appear below.
Do not increase property taxes / Property taxes are too high:33 comments
Focus on infrastructure / roads and water: 29 comments
The survey should be more nuanced/ allow for more than three priorities in city services: 16 comments
Cut staff / stop increasing city staff / question compensation of management: 12 comments
Control spending: 10 comments
“On fixed income. Montpelier seems determined to become a city only for the relatively wealthy.”““I don’t exactly support increases in taxes and fees, but how else can the city increase its revenue and thus better serve the residents?”“Please increase the budget for infrastructure repairs… deferred maintenance just makes things more expensive down the line.“I have lived here all my life and now cannot afford to retire here because of the costs, taxes, etc.”“We need to focus on essential services and wait on optional projects. No one I know received an 8% increase in income this year.”
—comments from Montpelier residents on the city budget survey