Facts Matter: Budget and Infrastructure
Infrastructure and budget policy are key issues in Montpelier and merit a review of pertinent information. John Hollar’s Feb. 22 commentary in both The Bridge and the Times-Argus invokes comparisons between 2012 and 2018, when he served as mayor, and between 2018 and 2023, when Anne Watson served as mayor. The facts show that the Watson-era council’s combination of annual capital funding and infrastructure bonding exceed any prior level of capital investment.
The 2012 Hollar-era council adopted a “steady state” plan called the Capital Plan, which includes roads, sidewalks, storm drains, buildings, bridges, bond payments, and equipment/vehicles — not just paving. The plan called for increasing annual funding for these items from $1,572,404 in FY12 to a target of $2,400,000.
The Hollar council made the policy choice to incrementally raise this funding over a number of years to avoid large tax increases. As such, the $2.4 million target was never reached under the Hollar council. They, in fact, reduced the amount of Capital Plan funding by $54,308 in FY17 as part of their overall budget decisions.
The Watson council continued implementing the Capital Plan to the penny until it reached the full $2.4 million target in the FY21 budget.
The pandemic hit two weeks after the FY21 budget was approved. The city faced a revenue shortfall of about $1.5 million. Twenty-seven city employees were furloughed and services widely curtailed. To address the shortfall, the Watson council canceled or delayed $702,970 in Capital Plan items and reduced the FY22 Capital Plan from $2.4 million to $1.925 million — a reduction of $475,000.
For the FY23 budget, the Watson council increased the Capital Plan from $1.925 million to $2.155 million, an increase of $228,000, although still below the $2.4 million target. Given the totality of budget needs and demands (including inflation impact) they chose to keep the Capital Plan funding at $2.155 million for this proposed FY24 Budget.
Comparing FY22, FY23, and FY24 budgets to the Capital Plan target shows a budget “shortfall” of $965,000 over those three years. Adding the $702,970 in delayed items makes a total of $1,667,970 that was delayed or reduced during that time.
In response, the Watson council allocated $1.525 million — $1,090,000 of ARPA Money and $435,000 of Capital Fund reserve — to restore the Capital Plan. Therefore, the Watson council provided an average of $2.35 million per year toward the Capital Plan over the last three years — barely shy of the $2.4 million target. That amount exceeds any Capital Plan budget proposed by the Hollar council.
The Watson council also addressed issues that had been deferred by prior councils. They invested $7.2 million for a total overhaul of East State Street. They invested $1.215 million for the Barre/Main intersection, downtown street lighting, retaining wall repair, and sustainable heating at the Department of Public Works facility. They took on the longstanding problems of an inadequate recreation facility and lack of housing by purchasing the Country Club Road property. They also budgeted to implement the net-zero energy goal adopted but not funded by the Hollar council.
Mr. Hollar suggested that the city’s plan for replacing water and sewer infrastructure — paid from water and sewer rates outside of the Capital Plan — is inadequate and stretches for too many years. Yet this plan was reviewed and approved by the Hollar council in 2017 and remains city policy. The Watson council continued implementation of this plan as adopted. The Watson council also allocated an additional $450,000 of ARPA money for water and sewer infrastructure.
Montpelier has had high water pressure since the inception of the water system a century ago. The Hollar council was briefed on this and did not express any concern nor initiate any action. Now, the city is completing an independent engineering study to provide specific recommendations about water pressure and to identify the highest priority water lines for improvement.
The Hollar council defined a sustainable budget as staying within inflation, meeting Capital Plan funding goals, and continuing the water and sewer plan. Over the last three years, the Watson council proposed cumulative increases of 15% against 14.9% inflation. The Watson council funded the Capital Plan, maintained the water and sewer plan, took on lagging projects, fully staffed departments, jump-started net-zero, and provided a full array of services all within the cost of living during a pandemic.
As we enter the next mayoral era, we can reflect on the leadership of the recent past with a full understanding of the facts. Could the city spend more on roads and water/sewer lines? Of course. Every council wrestles with this balance and reaches decisions about how to allocate Capital Plan funding and the appropriate level of taxes and fees. The next mayor and council will face the same difficult choices.
