City Steering Committee Reviews Budgets and Ballot Articles

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Thursday January 28, 2016

Town meeting day is a little over a month away, and the city council and school board have finalized their budgets and ballot language for the upcoming election. Both groups have worked hard through the budget process; a steering committee meeting held January 20 provided an opportunity for the respective bodies to present their annual budgets and ballot articles.

The City Budget and Ballot

The city will present three ballot items to voters in March: the election of officers, the budget, and the re-allocation of one half of the one cent currently designated for the open space reserve fund, to be used for improvements to open space areas.

Under the leadership of City Treasurer and Deputy City Manager Tom Hubbard, the city is proposing a 2.98 percent increase in the budget. This is a 1.37 cent increase in the tax rate, and maintains the current level of service.

Major factors contributing to the increase are rising costs of health and property insurance, a 60 percent increase from FY ‘16 in the pension contribution, contractual salary increases, and a dedicated reserve of $156,000 for the possibility of a loss of revenue as a result of a pending tax appeal by the City of Burlington for the Burlington International Airport. This budget also funds the majority of recommendations in the human resources investment plan (HRIP) as presented to the council by department heads late last year. It also establishes, for the first time, a designated fund for stewardship of city buildings at a rate of $75,000.

The budget does not include a number of items that were put forth for consideration, such as including full funding of all HRIP requests, renovations to Fire Station 2, full restoration of the reserve accounts back to 2013 levels, funding all requests in the capital budget (21 percent of projects were left unfunded), a stabilization fund, and phase II of the stewardship plan.

Expenditures are up $1,781,464 over the current fiscal year, but revenues are also up $1,058,106 over the FY ‘16 approved budget. Major drivers for this increase in revenue include fire inspection fees, planning and zoning permits, reduction in workers comp, grand list growth, local options tax, electrical inspector fees, and an offset from the enterprise accounts.

Enterprise funds include water, sewer, and stormwater. The annual increase per utility user is $14.76. The bottom line? The amount to be raised via property taxes is $13,995,642, which equates to a tax rate of $0.4737, a $.0137 increase over the FY ‘16 approved tax rate. The average homeowner ($366,000 assessed value) would see an annual increase of $50.14 or $4.18 per month while the average condo owner ($226,000 assessed value) would see an increase of $30.96 annually, or $2.58 per month.

The School Budget and Ballot

The school board has gone through seven iterations of their budget on its way to approval. The board has been quickly and seamlessly adapting to the spending cap thresholds placed upon them under Act 46. The Act 46 cost containment measure initially set the maximum cost per equalized pupil for the South Burlington School District at $15,174.39. This figure, when plugged into prior versions of the budget showed that the district would be under the spending cap threshold and thus, avoid a penalty.

Then, January 15, school districts around the state were notified that the formula for calculating the allowable growth threshold had been revised by the state. This change lowered the cap for South Burlington to $15,051.93, but the district was still able to avoid a penalty by increasing their tuition estimate by $28,292 and increasing the state aid for transportation by $70,000. The spending per pupil is now exactly at the capped rate.

The board and administration arrived at this budget figure after substantial discussion, particularly around the need for FTEs (full time equivalent). At the first budget meeting in January, the board reviewed a preliminary budget that included, among other items, several new hires, an HR generalist position and moving two HowardCenter clinicians from contract to employee status.

Superintendent David Young presented a revised budget with those positions removed January 13. The deletion of the HR generalist position removed $78,553 from the budget and keeping the HowardCenter employees under contract saved another $27,420. While the HR services that would have been performed by a generalist are still needed, the district will contract out for those projects as they arise and have budgeted $35,000 for that purpose.

The preliminary budget indicated an increase of 11.44 FTEs in FY 2017. The final budget shows 8.44 FTEs. Young provided the board with a list of consequences if the 8.44 positions went unfilled. The majority are due to legal requirements to meet student needs through board certified behavior analysts and paraeducators.

Voters will also see several other ballot items on the school side: the election of officers, establishment of a capital reserve fund ($300,000) to allot money to be used in future years, and a $2.5 million bond to address significant identified needs.

The bond is being proposed in the amount of $2,500,000 to be financed over 20 years. Projects to be financed by the bond are primarily for ADA compliance issues and hazardous materials remediation at the middle and high school.

Bottom line? The total budget approved by the board comes to $46,973,703 and residents will see a school tax decrease. The residential tax rate impact prior to income sensitivity will be a decrease of $36 per $100,000 of assessed value. That means the owner of a condo valued at $226,000 will pay $3,580, a decrease from FY ‘16 of $81 or $7 per month. The owner of a home valued at $366,000 will pay $5,798, a decrease from FY’16 of $130 or $11 per month. These figures are prior to income sensitivity.

Budget books, which include answers to frequently asked questions, are in the process of being constructed. You can also check out budget information on both the district and city websites. Mark your calendars for the pre-town meeting day information session Monday, February 29 at 7 p.m. in the Frederick H. Tuttle Middle School cafeteria. Voting takes place on Tuesday, March 1.

SOURCE: Corey Burdick, Correspondent