VERGENNES — Vergennes aldermen on Tuesday made final their decision to adopt a $2,087,959 city budget that means a 9-cent increase in the municipal tax rate, of which 7 cents will pay for the new Vergennes police station.
The new rate aldermen adopted on Tuesday to solely fund city services, not schools, is 72.5 cents, up from the current 63.5-cent rate.
Aldermen said considering the 7 cents devoted to the new Main Street police station, the remaining 2 cents of the hike is a responsible rate increase. Prior to small increases in each of the past two years, the Vergennes municipal rate had been 60 cents from 2008 to 2012.
“I think everybody knew when they voted for the police station that 7 cents was going to be part of it,” said Alderwoman Lynn Donnelly. “We’ve done our part by making it 2 cents.”
The council decision will mean an additional $90 in taxes per $100,000 of assessed value during the 2014-2015 tax year.
According to council minutes, Vergennes officials expect the city’s residential school tax rate to rise from $1.26 to $1.44. Residential taxpayers will see an increase of $180 per $180,000 of assessed value in the coming year in school taxes, but those eligible for rebates would see relief in the following years.
About two-thirds of Vergennes homeowners were eligible for rebates in the most recent year for which data is available.
City Manager Mel Hawley on Tuesday projected a year-end fund balance of about $161,500, a figure that he said could move up or down at least somewhat depending on delinquent tax collection, the size of outstanding bills for June, and the final amount of some police department grants.
Aldermen plan to use $110,000 of that projected cash-carryover from the current fiscal year (which ends on June 30) to reduce the tax rate.
Hawley said each penny on the tax rate equals $22,000 of revenue. Therefore, that $110,000 reduced the new tax rate by 5 cents.
Aldermen on Tuesday discussed whether to use another $11,000 of the fund balance to reduce the tax rate to 72 cents.
Alderman Michael Daniels said he preferred a 72-cent rate, and would like to “challenge the department heads” to save more money in their budgets.
Hawley said that in previous years the council had preferred to leave $50,000 in the fund balance as a cushion against problems that might crop up. In 2013, aldermen used $130,000 of a $180,000 fund balance to offset taxes, he said.
“Every time you save that half-cent, you challenge the fund balance,” Hawley said.
Alderman Joe Klopfenstein cited what he called the “magic” the public works department had performed in coming under budget despite a tough winter. He said in preferring the $50,000 fund balance that expecting a repeat performance might be asking too much.
“I would like a little flexibility there,” Klopfenstein said.
Ultimately, aldermen unanimously backed Alderman Lowell Bertrand’s motion for the 72.5-cent rate.
That Vergennes general fund budget of almost $2.1 million tops the $2 million mark for the first time.
The general fund budget does not include the city’s self-sustaining sewer and pool funds. It does include the city’s share of the cost of the Vergennes Fire Department and city recycling center. Those costs are shared with surrounding towns. The city fire department is the first responder to Panton and Waltham and parts of Ferrisburgh, and the city recycling center also serves other towns.
The general fund budget rose by 12.25 percent from the 2013-2014 budget of about $1.86 million, with most of the increase due to the police station cost.
Unlike other county towns, in Vergennes residents do not vote directly on budgets. Instead, they are adopted annually by the city council.
The general fund budget includes:
• $742,918 for police, a figure that reflects bond funding for the police station and the salary of the sixth fulltime officer, an amount that was previously grant-funded. Hawley said that $43,000 of salary and benefits essentially equaled the 2-cent increase that city officials targeted when they started the budget process. “There that went,” Hawley said.
Overall, police spending rose by about $189,000, including paying the bond for and maintenance on the new station.
• $189,593 for general expenses, which includes the city’s share of fire and recycling costs; support for the Bixby Library, Vergennes Partnership, Vergennes Area Rescue Squad, Addison County Transit Resources and other organizations; county tax; and Vergennes Day funding. Hawley said an increase in the VARS assessment from $12,940 to $16,822 was the only significant change.
• $31,379 for appropriations approved by residents in March, an unchanged figure.
• $751,117 for public works, an increase of about $13,000. Hawley said the planned resurfacing of the access road and parking lot for Vergennes Falls Park caused almost all of the public works spending hike.
• $372,592 for administration, an increases of about $14,700. Hawley said the line item for city hall maintenance was boosted by $12,500 to $20,000 to pay for roof repairs, gutter removal, and the study of a possible reconfiguration of the building’s first floor now that police have moved out. “We may not do much, but it is an opportunity to look at our floor plan,” Hawley said.
Andy Kirkaldy may be reached at [email protected]