Vergennes gets level city tax rate

VERGENNES — Vergennes aldermen on Tuesday made final a 2011-2012 budget and adopted a municipal tax rate for the upcoming fiscal year that will remain level for the fourth year in a row.
The budget features few spending increases other than a modest pay raise for some city employees.
The city’s municipal property tax rate will again technically stand at 60.07 cents. Including between 0.023 cents and 0.025 cents to account for tax breaks Vergennes offers to disabled veterans and to the Masonic lodge on School Street, the rate will again round to 60.3 cents, unchanged since 2008.
Vergennes and Addison Northwest Supervisory Union officials do not expect state officials to announce the city’s education tax rates until the end of the month.
However, according to ANwSU estimates, the city’s residential school rate could drop by 6 cents.
That change could translate to a decrease in taxes of $120 for a Vergennes home assessed at $200,000.
The full effect of that decrease would probably only be felt by households that are not eligible for tax relief under Act 68. In 2008, 74 percent of Vergennes households received school tax rebates.
Aldermen on Tuesday made only minor changes to the budget that City Manager Mel Hawley first presented to them in late May.
They bumped up city’s per capita assessment to the Vergennes Area Rescue Squad, and adjusted for a slight decrease in the value of the city’s grand list of assessed property to account for successful tax grievances.
Most notably, they made official an up-to-3-percent salary increase for city workers, exclusive of Hawley and City Clerk Joan Devine. Hawley will determine the exact amount of the raise each worker will get, in concert with department heads, with a 3 percent maximum.
Aldermen unanimously backed Deputy Mayor Randy Ouellette’s motion that the raises be up to 3 percent, the upper end of the raise spectrum the council had discussed during budget sessions.
“The people in public works, the people in the office, they have worked their butts off,” Ouellette said.
The result was a general operations budget for fiscal year 2012 that features spending of $1,707,874.
It contains:
•  An administration budget that will drop by about $1,200 to $351,017.
•  A police budget that will increase by about $34,500 to $488,117. Higher salaries and benefits are driving much of the increase.
•  A public works budget that will rise by $19,000 to $712,195.
The budget includes $10,000 more for winter road maintenance and $60,000 for a vehicle purchase, and $50,000 less for paving ($100,000, down from $150,000).
•  Less money for both the fire department ($5,000 lower, thanks to less bonded debt) and the recycling center ($10,000 less, thanks to lower tipping fees).
The sewer budget is also lower, down $17,000 to $593,000. That budget is funded by user fees, however, not by taxes.
Higher revenues are also brightening the city’s financial picture, Hawley said; that revenue is deriving from increased payments in lieu of taxes from the state for property it owns in the city, better interest earning on city funds, and increases in police fines.
Hawley recommended that aldermen keep the tax rate in check by using roughly $122,000 of a year-end surplus he estimated would stand at $154,000 when all current fiscal year bills are paid.
City officials estimate that each penny on the tax rate raises $21,000. Therefore, using that $122,000 prevents a tax increase of almost 6 cents.
Aldermen agreed to do so, but there were rumblings that the tax rate would be difficult to hold in check indefinitely. They briefly discussed a local option tax — Middlebury and Williston are among communities that have added to the statewide sales tax for local purposes — as a way to fund infrastructure maintenance or upgrades.
And aldermen said the city’s infrastructure cannot be ignored much longer.
“I am concerned about the infrastructure,” said Mayor Michael Daniels. “At some point there will have to be a tax increase … or a different tax.”
Hawley also noted that a year ago, aldermen had a larger surplus — $229,000 — out of which to take about the same amount of cash to stabilize taxes. And he noted that this year’s delinquent tax picture is a bit more troubling.
Daniels also took note that even including a $24,000 tax rebate the city will receive from an education tax overcharge two years ago, Vergennes will begin this year with a financial cushion of roughly half the size it had in 2010.
“What we do today affects next year’s balance,” he said. “If we don’t want to go backward, we have to find another revenue source.”
Andy Kirkaldy may be reached at [email protected].

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