Middlebury local option tax receipts exceeding expectations

MIDDLEBURY — Middlebury’s 1-percent local option tax on rooms, meals, sales and alcohol continues to deliver more-than-adequate revenues to pay debt service on the Cross Street Bridge, according to the latest figures released by the Vermont Department of Taxes.
Middlebury took in $215,171 during the third quarter (July-September) of this year, the best third-quarter performance of the taxes since they were instituted in late 2008. By comparison, the taxes yielded $203,588 during the third quarter of 2011; $190,420 during that same time period of 2010; and $186,917 for that timeframe in 2009.
That represents a 15 percent increase from 2009 to 2012.
It was during the fourth quarter of 2008 that Middlebury first instituted local option taxes (with voter approval) to cover $7 million of the $16 million Cross Street Bridge debt. Middlebury College gifted the remaining $9 million to help cover debt service on the 30-year bond.
Town officials have been counting on $650,000 in annual revenues from the local option tax to cover debt service on the new bridge. The tax netted a total of $682,000 in fiscal year 2010; $713,342 in fiscal year 2011; and $746,368 in fiscal year 2012.
“We had a dip (in revenues) in 2009, but things have been looking up since then,” Middlebury Town Manager Kathleen Ramsay said. She noted 2009 proved to be a particularly bad revenue year because of the recession.
Any surplus money raised through the local option tax is placed into a fund dedicated to the bridge project and its maintenance. The balance of the bridge fund is expected to be $74,780 by the end of this fiscal year (June 30, 2013), according to town officials. The fund has been tapped recently for ancillary expenses associated with the construction of the bridge, according to Ramsay.
The bridge fund balance is expected to grow during the coming years as more of the interest and principal of the project gets paid back. Future disposition of that balance — assuming it is not needed for any extraordinary Cross Street Bridge expenses — will likely be the subject of a lot of debate among Middlebury residents. Ramsay noted it would take a vote of the public to use the funds for anything other than Cross Street Bridge-related purposes.
Future debate over use those surplus funds could include pay-down on a new community center/town office complex for Middlebury. The town has already hired an architect and formed citizen committees to put together a proposal to build a new facility in place of the current deteriorating municipal building at the intersection of College and South Main streets.
Selectman Victor Nuovo is the leader of a committee looking onto the financing of a new community center/town offices. He said his committee has not seriously explored the use of excess local option tax revenues as a potential funding source for a new municipal center. Rather, the committee is examining ways to cover the estimated $4 million to $6 million price tag from “outside sources” — namely, through a federal appropriation, foundation grants and/or private donations.
“We are working on a list (of possible funding sources) and preparing a brochure describing what we want to do,” Nuovo said.
Ideally, according to Nuovo, success in raising money from outside sources would negate the need to ask property taxpayers to underwrite some or all of the costs through a bond issue. Nuovo and his colleagues hope to be able to tell residents next year they have raised at least a substantial portion of the project costs and be able to identify how much (if any) would need to be raised through a bond.
At this point, planners have sketched out only a rough idea of what a new municipal center might look like. Nuovo and many of his colleagues would like to see the new center built with renewable energy technology so that it manufactures virtually all the electricity it needs.
“It would be innovative and pioneering,” Nuovo said, a fact that could increase the project’s allure to potential donors and serve as a model that could be duplicated statewide or even nationwide.
Reporter John Flowers is at [email protected].

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