City Council Continues Tax Rate Increases: Final Budget Hearing Jan. 25

The Montpelier City Council once again increased next year’s budget at a hearing Jan. 11, despite public entreaties to keep property tax increases in check. The council reinstated an unstaffed social worker position, adding another $20,000 to the budget, which ratchets up the budget to increase the property tax rate 7.6%. At its Dec. 21 meeting, the council added $13,000 to its working budget and increased the tax rate to 7.5%. 

The council will meet for a second budget hearing on Jan. 25, when it plans to finally adopt the FY24 budget to go on the ballot for Town Meeting Day in March. 

In the first draft of the budget, property taxes would increase 7.4%. Despite a city survey showing that 52% of the 268 respondents said they do not support increasing revenues through increased taxes and fees, a few weeks later the council increased the budget to a 7.5% tax rate, and then increased it again at its latest budget hearing.

 Also at its Jan. 11 meeting, after a last-minute addition to the agenda of an executive session, the council allocated $52,000 to purchase 51.42 acres on Gould Hill Road for a “housing and conservation project” that will expand North Branch Park. There have been two previously announced executive sessions regarding this purchase with no action taken. City Manager Bill Fraser, who will complete the paperwork, and parks director Alec Ellsworth will “pursue Vermont Housing and Conservation Board (VCHB) funding to reimburse the city fully and to authorize the city manager to advance funds to be reimbursed to facilitate this purchase.” The VHCB will decide whether or not to fund this project at their next board meeting on Jan. 26.  

Other business:

• The next public budget hearing is moved to Wednesday, Jan. 25. At that time potential charter change language will be discussed that could institute a local option sales tax and a withdrawal from the the Central Vermont Public Safety Authority. An ordinance and proposal to form a stormwater utility will also be on the ballot.
• The council will meet at noon on Friday, Jan. 27 to review petitions for people running for office and to finalize the budget warning.

• Pelin Kohn was sworn in as District 2 councilor to fill Conor Casey’s term until Town Meeting.
• City Manager Bill Fraser informed the public that because the city disagreed with the state’s conclusion regarding the city’s water pressure, and at the request of the state, they conducted an independent study of the water system, which concluded that our high water pressure is not the issue. The report, which will be released soon, recommended that the city continue to replace lines as they are financially able. 
• According to Fraser, the city’s debt service, which accrued because of the upgrade of the water treatment plant, constrains the city’s bonding capacity. “The $500,000–$600,000 a year in debt payment is coming to an end soon, freeing funds for aggressive upgrading of the lines.” According to Fraser the city’s debt is below the legal limit, but does hinder the implementation of the Capital Improvement Plan.
• The FY23 budget to actual figures for the first half of the fiscal year were on the consent agenda without review. Several items were noteworthy at the midpoint in the fiscal year. Only $2,625.61 out of anticipated $45,000 in interest/investment revenue has been realized. In addition, five departments, Parks, Water, Sewer, Senior Center, and District Heat, anticipate deficits based on the high percentage of the budget spent to date.
• Jennifer Morton will not run for re-election in District 3.
• The council approved wording changes to last year’s $1.8 million bond to allow the city to shift the allocated money among the projects, including Confluence Park and the DPW garage heating system. The council has yet to decide what to do with the Confluence Park concept given its spiraling cost estimates.