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Middlebury dips into option tax surpluses

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Posted on August 14, 2014 |
By John Flowers



MIDDLEBURY — The Middlebury selectboard on Tuesday agreed to take $200,000 from the town’s local option tax fund that is reserved for Cross Street Bridge-related expenses in order to bankroll the relocation and undergrounding of utilities and power lines associated with the soon-to-be built new municipal building at 77 Main St.

It was on March 20, 2008, that Middlebury voters endorsed a 30-year local option tax of 1 percent on sales, rooms, meals and alcohol purchases in town in order to bankroll the community’s $7 million debt on the Cross Street Bridge project. Middlebury College agreed to underwrite the remaining $9 million for the $16 million project.

Fortunately, Middlebury’s local option tax revenues have comfortably exceeded the town’s annual debt service for the bridge, to the extent that the fund had, as of June 30, around $500,000 in reserves, according to Town Manager Kathleen Ramsay. It’s money that town officials have agreed must be dedicated to Cross Street Bridge-related expenses, including maintenance. The local option taxes have been yielding an average of $770,000 per year, around $110,000 more than the town has been conservatively projecting. Middlebury College’s annual contribution to the debt service amounts to $600,000.

Middlebury’s payback on the bond is slated to decline gradually to around $540,000 in year 30.

Past selectboards have discussed the concept of someday using surplus local option tax money for other municipal projects, but have said that such a move would be imprudent without first gauging the Cross Street Bridge’s long-term financial needs while also involving the public in the conversation.

But on Tuesday, after around 20 minutes of sometimes heated debate, the board agreed to take $200,000 from the fund to pay to relocate or put underground utilities for the municipal building project. The move came after selectboard members agreed that the work could be linked to the nearby Cross Street Bridge site. Selectboard members Dean George and Nick Artim argued the relocation of utilities had been a part of the original scope of the Cross Street Bridge project, but that work ultimately did not get done because it would have exceeded the $16 million budget.

“Essentially, this is completing work that had already been slated,” said Artim, also a member of the Town Offices & Recreation Facilities Building Committee.

The budget for the 9,900-square-foot town office building currently stands at $3,571,400, while the recreation facility/UD-3 team rooms project is being estimated at $3,712,100. That totals $7,283,600, which is $383,600 over the projected budget. But selectboard members also point to the $872,000 built in for contingencies.

There is currently $100,000 built into the municipal building project budget to relocate and underground on-site and nearby utilities and power lines. But that budget, noted Bread Loaf Corp. Senior Architect John Dale, would result in a basic project that would likely have to be adjusted, at additional expense, when and if the adjacent Ilsley Public Library expands and when the nearby, town-owned “Economic Development Initiative (EDI)” property off Bakery Lane is developed (see related story, Page 3A).

Dale presented a more ambitious, $200,000 utilities relocation plan that he said would also accommodate for Ilsley Library expansion and an EDI project. And Dale said time is of the essence for the town to commit to either the $100,000 or $200,000 plan. That’s because Green Mountain Power officials on Wednesday confirmed they will file, as early as this week, a request with the Vermont Public Service Board for a 37-percent increase in what it charges for its share of utilities-related construction work.

Kristin Carlson, director of media for GMP, explained the company needs to update its rates in the wake of its 2012 merger with Central Vermont Public Service Corp. She said CVPS had not updated its construction-related rates in 14 years.

“We’ve got to make a decision tonight on this … or incur additional costs,” George said Tuesday.

The board voted 5-0 (with Selectman Brian Carpenter absent and with the board carrying a vacancy created by the recent resignation of Selectman Travis Forbes) to use the $200,000 in local option tax reserves for the utilities project, but not before Selectwoman Susan Shashok raised her concerns about the plan.

“We haven’t had that discussion (on using local option taxes) at all,” Shashok said.

“What irritates me is I have been trying to have that discussion for a long time, and now you have had that discussion with someone else,” she added, referring to the Town Offices & Recreation Facilities Building Committee.

Shashok said she’s concerned about what might happen if some major, unanticipated Cross Street Bridge expenses crop up with a smaller local option tax reserve fund. She agreed to support the $200,000 appropriation with the proviso that the town moves forward with a planned 2015 study of the Cross Street Bridge’s potential long-term needs.

Selectwoman Laura Asermily said she hopes the town can recoup some of its $200,000 investment in the utilities relocation once the EDI land is sold. She said the ready-made utilities infrastructure should make the land more valuable.

In other town office/recreation center news, board members received a recommendation from the Town Offices & Recreation Facilities Building Committee that construction work on the new town office building and the new recreation facility off Creek Road be postponed until next spring. Work had been slated to begin this fall. Artim explained that a delay until the spring would avoid around $200,000 in winter-related construction costs and might result in more bidding competition among contractors.

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