Two-cent city tax hike first since 2008

VERGENNES — Vergennes aldermen on Tuesday approved the first increase in the municipal portion of the city tax rate since 2008, a 2-cent hike that will bring it to about 62.3 cents for the 2012-2013 fiscal year that begins on July 1.
Addison Northwest Supervisory Union officials and City Manager Mel Hawley expect the city’s residential school rate to drop by a little bit less than a penny, meaning the overall residential property rate in Vergennes should rise by a little more than a penny.
A 1-cent increase in the Vergennes tax rate would mean an extra $10 in taxes for every $100,000 of assessed value.
That hike would translate into a little more than $20 of additional taxes for a $200,000 home, assuming its owners were not eligible for property tax relief. More than half of Vergennes homeowners are eligible for property tax relief according to the most recent figures available from the Vermont Department of Taxes.
Still to be calculated by city officials is a small portion of the municipal rate that is determined by the size of exemptions for the Masonic building on School Street, plus property tax breaks for a half-dozen disabled veterans.
In anticipation of that approximate quarter-cent on the tax rate, alderman actually adopted a tax hike that brings the rate to 62.07 cents, with that quarter-cent to be added in to bring the rate up to 62.3 cents.
Before aldermen adopted the city budgetthat will be supported by the new tax rate, they also agreed to give money to the Vergennes Partnership and Vergennes Opera House from the city’s Water Tower Fund (see story), and to give Hawley the right to boost city employees’ pay by up to 3 percent.
Transferring partnership funding to the Tower Fund took $5,000 out of the budget, while putting pay raises in added almost $22,000.
Aldermen are applying $95,000 of an unspent amount of about $119,500 from the 2011-2012 budget to keep the tax rate down. Officials said most of those savings were due to the mild winter, and some due to increased revenue.
Without the pay raises approved on Tuesday, no tax rate hike would have been necessary if aldermen had devoted all the carryover to tax reduction.
When aldermen agreed to the 2-cent hike that preserved some of the carryover, that meant there would be some money left over for next year if the budget is accurate, and there would be a cushion if unexpected expenses crop up.
Two aldermen voted for a 3-cent increase — Randy Ouellette and Peter Garon — on a motion made by Ouellette. Both advocated for a bigger rainy day fund and carryover.
“I’ll be the bad guy. It’s got to happen,” Ouellette said. “I’m trying to be fiscally responsible.”
Garon pointed out that without the carryover from the 2011-2012 budget, the 2012-2013 spending aldermen approved on Tuesday would require a 4- or 5-cent hike, and that he expected a similar situation a year from now.
“This budget really does need an increase in the tax rate,” Garon said.
Hawley did not dispute Garon’s position, and said there were no more easy ways to save money in the budget.
“I can tell you it’s actually more than 5 cents,” Hawley said. “Whether you go up 1 cent or 2 cents … I can tell you all the low-lying fruit is gone.”
City Counselors Renny Perry, Joe Klopfenstein, Ziggy Comeau and Bill Benton voted against the 3-cent hike, and aldermen then unanimously backed the 2-cent increase.
Aldermen wanted to emphasize that by raising the rate 2 cents — more than the 1 cent absolutely necessary to cover the raises they approved — they were preserving some of the carryover.
“It doesn’t hurt to say we’re doing that by not using more of the fund balance,” Perry said.
The general fund budget aldermen approved on Monday totaled $1,774,459, up almost $38,000 from the 2011-2012 budget.
That budget does not include fee-backed sewer spending, or the Vergennes Fire Department and city recycling center budgets. In the latter two cases, costs are shared with surrounding towns, and the city’s general fund budget just includes the city’s share.
Department by department, aldermen backed:
• $364,039 for administration, a $13,000 increase due mostly to higher building maintenance and auditing costs and salaries.
• $507,472 for police, an increase of about $18,000, largely due to salaries and overtime.
• $710,450 for public works, an amount that is roughly level-funded.
• $138,100 for the Vergennes Fire Department, up about $17,000 due to gear and maintenance costs.
• $160,819 for general expenses, which are up slightly despite a shift of the city’s $5,000 support for the partnership to the Tower Fund. The higher city fire department share is here, as are rising unemployment insurance costs and more support for the Vergennes Area Rescue Squad.
• $31,679 for voter appropriations, up almost $1,000.
• $595,000 for the sewer fund, up $2,000. Changes in the sewer fund do not affect taxes.
Aldermen will meet just once in July, on the 17th, when they will handle two major issues.
They will hold what could be the final public hearing on new zoning regulations proposed by city planners and recently amended in a joint meeting of planners and aldermen. That joint meeting followed the first council hearing on the laws, and some changes were made based on testimony at that initial council hearing. Aldermen believe they might be able to wrap up their work on the 17th.
“It is my strong hope that we pass the regulations … the planning commission worked so hard on,” said Mayor Michael Daniels.
They will also deal with the policy for displays on the city green, including the popular and longstanding Christian crèche during the winter holidays. Aldermen could make final that policy, which they have been working on in recent months but set aside to focus on the budget and new zoning. After they circulate a final draft among themselves, they expect to make it available at vergennes.org.
Andy Kirkaldy may be reached at [email protected].

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