MIDDLEBURY — Middlebury selectmen on Tuesday got their first look at a draft 2011-2012 municipal budget that would maintain current staffing levels and services, but would require approximately $250,000 more in local tax revenues.
The municipal tax rate would need to be increased by almost 4 cents (from the current 80.9 cents) to generate $250,000 in additional revenues, according to Middlebury Assistant Town Manager Joe Colangelo. That would translate into a property tax increase of $74 for the owner of a homestead valued at $200,000, he said. It would be Middlebury’s first municipal property tax hike in three years, as the selectboard, in recognition of the sluggish economy, offered spending plans that maintained a level tax rate during this and the previous fiscal year.
While the selectboard is likely to make some revisions to this $8,302,283 draft spending plan during the weeks ahead, officials acknowledged the chances of avoiding a municipal tax hike for the third year in a row are slim. Town department heads have gone without raises for two years in a row, while health insurance rates continue to climb.
“I am personally not going to be trying to hold the line on a tax increase,” said Middlebury selectboard Chairman John Tenny. “At the same time, we are going to have to be careful and modest in our requests of the public.”
Colangelo pointed to four main factors driving the need for new revenues:
• The anticipation of no growth in Middlebury’s grand list. While the grand list has remained relatively stagnant this year, it is expected to grow next year with the addition of the Eastview at Middlebury retirement community under construction off South Street.
• An expectation that employee benefits will rise by around $161,000, mostly due to a rise in health insurance premiums. The town currently offers health insurance under a Vermont League of Cities and Towns Cigna plan. Rates are expected to rise by 17 percent and 10 percent for calendar years 2011 and 2012, respectively. Also, some individual employees recently switched to more costly family plans.
• A proposed $63,000 increase in the capital improvements budget. Proposed capital improvements spending of $814,324 is actually on par with what was spent for capital improvements this year. But this year’s budget was helped by a one-time infusion of flood-related money from the Federal Emergency Management Agency (FEMA) that helped defray some gravel road expenses. That FEMA money will not be available in this year’s budget and will therefore need to be absorbed by the town.
• A desire by town officials to maintain the same level of municipal services in fiscal year 2012 as are being delivered this year.
“We are not recommending any staff reductions,” Colangelo said. “We are getting by with a pretty small staff as it is.”
The town currently has employs 54 people.
Since the town has already made substantial cuts to keep the municipal tax rate flat the past two years, there is little “fat” to be cut from the budget, according to officials. With that in mind, Colangelo is offering the board some more meaty options from which to make cuts — if that is the route selectmen want to take. Those cutting options include instituting a “hiring frost” through which employee vacancies could be left unfilled for long periods of time; a possible reduction in annual town meeting allocations for local social service agencies; cuts to the capital improvement budget; and applying a larger-than-customary portion of the town’s fund balance to the spending plan in order to reduce the amount needed to be raised from property taxes. The town keeps a fund balance of roughly $450,000, money that is usually reserved for emergencies. The selectboard last applied $101,000 in fund balance toward this year’s budget.
“It might be appropriate to apply more (fund balance) this year than we have applied in the past,” Colangelo said.
It should be noted the current budget draft does not include any money for some new economic development and marketing initiatives the selectboard hopes to implement this year. The draft also assumes that the Battell Trust will again agree to donate enough rental proceeds from the Chipman Hill telecommunications tower to cover one penny on the tax rate (around $71,000) that raises money for local conservation projects.
All of these variables figure to add up another tough budgeting exercise for selectboard members.
“It will involve some hard choices this year,” Tenny said.
Reporter John Flowers is at [email protected].