Work Continues on City Budget

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Thursday January 11, 2018

Sustainability was the theme of the evening as the city council held a special meeting January 4, dedicated to hearing from department heads, City Manager Kevin Dorn, and Deputy City Manager Tom Hubbard about factors that influence the FY 2019 budget. Last year, the budget came in at a 2.97 percent increase, and this year the council had given guidance that they would like to stay around the three percent increase mark. However, as they discovered throughout the evening, even a 3.44 percent tax increase would only marginally maintain the city’s current level of service and does not allow for a number of proposed initiatives including establishing a stabilization fund, a new police vehicle, and an increase to funding for the sick bank.

Tom Hubbard began the evening by outlining what a 3.44 percent increase would cover, including meeting all of the city’s contractual and bonded debt obligations, providing limited support to the Capital Improvement Program (CIP), funding annual assessments, supporting the Housing Trust Fund, and maintaining existing funding levels for the stewardship plan and sick bank. The city did have positive revenue factors this year including a ¾ percent growth ($221,000) in the grand list. However, there was a decrease in revenue from fire and electrical inspections as well as police department impact fees which total $125,000.

“There is only so much lack of funding the CIP can tolerate before it becomes an obsolete tool for long term planning,” Hubbard said. The city is continuing to work in depth on a ‘Lean Process’ over the next three months and will report back to the council on the results of those efforts. City management also is continuing to seek regionalization and coordination of shared services with neighboring communities as a way to help offset rising costs.

The taxpayer impact of a 3.44 percent tax increase would be $57.14 annually on an average home valued at $336,000 and $39.33 for the average condo valued at $231,000.

In terms of the city’s salary related expenses, which are contractual, public safety personnel accounts for an increase of $166,000 while non-public safety employees salaries result in a $70,000 increase. Health insurance tacks on a 12 percent increase, at $218,000, and pensions total $290,000.

Proposed cuts to the budget include reducing the designated reserve by $50,000, the undesignated reserve by $21,000, social services funding by $25,000, and the City Center Reserve Fund by $110,000. The delta, as a result, would only be $27,000.

Hubbard said, “This was one of the toughest budget proposals for us to date. Many hours of deliberations have been held with departments to put this budget in its present form, and we know that there is shared concern from managers about the future operations of their respective departments.”

These thoughts, which were later echoed by several department heads, point out that budgets such as the one being outlined for FY2019 are not sustainable moving forward without a larger growth in the grand list or additional funding.

While some city departments came in with close to identical budgets from the previous year, such as the city clerk’s office, others sacrificed positions and equipment in order to make their budgets fit into a prescribed figure. Fire Chief Doug Brent had to eliminate new winter jackets for half of his crew, along with airpack maintenance, and hoses and nozzles, among others items. These are tough reductions given that South Burlington is one of the busiest fire and ambulance departments in the state. Brent mentioned that the department had answered more than 95 calls between 8 a.m. on Christmas day and 8 a.m. New Year’s Day.

Police Chief Trevor Whipple said his budget reduces fleet replacement by one vehicle and continues to leave unfilled, a position that is needed to cover administrative duties that currently fall to police staff. Whipple explained that one of the challenges of crafting his budget is that he only has an 18 percent margin with which to work since 82 percent of his budget is for personnel, in the form of salaries and benefits. He did caution that if the city can’t grow its budget in the future, he will have concerns.

These concerns were echoed by Public Works Director Justin Rabiddoux, who this year will forgo filling a new position of a bike and pedestrian coordinator as well as seeing a reduction in his fleet and delaying some paving and striping projects among other items. Rabidoux explained that while he tried to find ways to meet the council’s directive, “Something is going to give moving forward and services will likely suffer.”

The final numbers for the library budget are much the same as last year, although there was a bit of shifting in how and where those dollars will be spent. For instance, while leased space at University Mall is $16,000 less than what was paid to the school for the shared space in the high school, those savings are spent in another line-item, with $16,335 in expenses designated for janitorial services at the new space.

Holly Rees delivered details about the Recreation and Parks department’s budget outlook. Community programs such as CityFest and Bikes and Bites were popular and well received last year, but carried a high price tag. The department is currently in talks with a sponsor to cover the cost of the Bikes and Bites programs so it is sustainable going forward. Plans for City Fest’s ongoing sustainability were also discussed. Changes in children’s programming have negatively affected revenue since the School’s Out program has taken over a number of after school programs and summer camps, and going forward, the city department will no longer be providing a summer-long day camp program. In addition, the department will discontinue their Pre-K program. However, a number of specialty camps will be offered throughout the summer. Another revenue challenge the department faces is in the adult programming sector, due to problems securing appropriate space, Rees explained. City Hall has limited activity spaces and consistent access to the schools has proven difficult. The department hopes to see a boost in revenue from keeping Red Rocks Park open longer this year, from Memorial Day through Labor Day.

After listening to the narratives and contemplating the proposed school budget numbers, Meaghan Emery suggested adding some items to the budget including funding for the police cruiser, paving, line striping on streets, IT hardware, fire department jackets, and airpack maintenance, as well as adding to the City Center reserve. However, when funding was added for those items, the result bumped the tax rate up to a five percent increase, which was deemed not feasible by councilors. Helen Riehle added that she felt uncomfortable with the delta being so close to the city’s bottom line. She was most concerned about the undesignated and TIF reserve and felt they were fiscally important. Those figures are $21,000 and $110,000 respectively. Nowak said she thought the issue of funding was twofold and that there needed to be an emphasis on working with the business community and growing the grand list as opposed to placing the emphasis on raising taxes. Barritt applauded the hard work and duress of the department heads, acknowledging the effort that went into budget development.

With the idea that council is willing to look at expanded numbers to include important budget items, Dorn and Hubbard will put together some graduated tax rate budgets for the council to review at their next meeting, January 17. It is at this meeting where council action on the budget will be necessary.


SOURCE: Corey Burdick, Correspondent