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Overall Vergennes tax hike seen at 13 cents

VERGENNES — The Vergennes City Council on Tuesday used some creative accounting and a new, larger projected fund balance to hold the 2016-2017 increase in the municipal portion of the city tax rate to 4 cents, while adopting a $2.23 million general fund budget. 
The new municipal tax rate will be 79 cents, up from 75 cents in Vergennes’ 2015-2016 fiscal year that ends on June 30.
The municipal tax rate increase of about 5.3 percent will translate to an additional $80 a year in taxes on a $200,000 home.
Before Tuesday’s meeting, the council had been working from a $2.3 million draft budget that, if adopted with a $60,000 carry-over of money unspent this past fiscal year, assumed an 84-cent municipal rate — a 9-cent increase. 
Also late on Tuesday afternoon, Addison Northwest Supervisory Union business manager Tonia Mears said she had been informed by state officials that the city’s new residential school tax rate would be $1.6021.
That amount represents a 9.087-cent hike in the homestead school tax rate of about 6.2 percent. 
In all, therefore, city homeowners will be facing a tax hike of roughly 13.1 cents, one that will translate to $262 more on a $200,000 home.
The roughly two-thirds of city homeowners who qualify for the income sensitivity provisions in Vermont’s school financing laws will receive some of that money back in the form of prebates on their taxes for the following year. 
In 2014, for example, 6,918 Addison County residents received an average tax bill adjustment of $1,587, according to state data.
BUDGET ADJUSTMENTS
On Tuesday, the municipal budget the council adopted had one major change: City Manager Mel Hawley said Vergennes could essentially borrow money from itself to buy two new police cruisers, a move that he said would save $60,000 and help drop the budget from roughly $2.3 million to $2.23 million. 
Hawley said the actual cost of the cruisers had also been determined to be $45,000 each, not $50,000, because of a municipal discount, knocking another $10,000 off a $100,000 line item. 
He proposed tapping the “continuation” portion of the city’s Water Tower Fund for the remaining $60,000, with the city making the fund whole again over the next two years. 
That portion of the fund, per city policy, is not tapped for supporting infrastructure projects, but is to remain whole to ensure that something remains for the future if the source of the fund — payments from cell phone firms to hang broadcast equipment on the city’s former water tower — dries up.
“I think that’s a great idea,” said Alderman Renny Perry. “I hadn’t thought of borrowing from ourselves.”
The other major factor in allowing the council to set a lower rate was Hawley’s announcement that he had pegged the year-end fund balance at $158,000, more than he had originally estimated. The mild winter and higher-than-anticipated delinquent tax collections both helped the bottom line, he said. 
Hawley said the council could safely use about $100,000 of the balance to offset the tax rate, $40,000 more than he previously recommended.
Combined with the police savings adopted by the council, the total budget and spending adjustments made on Tuesday came to $110,000. 
Because every $22,000 in spending cuts or additional revenue allows the council to shave a penny off the city tax rate, council members were able to reduce the 84-cent preliminary rate by 5 cents to 79 cents. 
BUDGET DETAILS
Even with the $70,000 cut in proposed police spending, police spending approved on Tuesday rose by about $100,000 to $866,668. In the prior year police spending increased by about $23,000.
Overall, the 2016-2017 general fund budget the council approved on Tuesday — not including the sewer budget, which is supported by user fees — rose by $110,000 from the current $2.12 million. 
Some council members said the trend in police spending, boosted this year also by the loss of $70,000 in grant funding for the detective’s position, cannot continue. Alderman Matt Chabot said the budget should be level-funded next year.
“We need some guidance and expectation that we are not going to keep jumping $100,000,” Chabot said.
Mayor Bill Benton said he had been considering at what point the police department was big enough and expensive enough to meet the city’s needs.
“I think we’re getting real close to that,” Benton said.
Police Chief George Merkel and Hawley said buying two cruisers was necessary, although after selling a 2010 vehicle they said was a lemon the purchase would bring the department’s vehicle count up to six. They said two older vehicles were in poor condition, while newer vehicles would lower maintenance costs and restore the proper timing to the fleet’s purchasing schedule because the department had not bought a new cruiser in five years.
Hawley added the department’s qualifications and specialized work demands it, because four officers — Merkel, the department’s detective, the commercial vehicle enforcement expert, and the canine officer — all drive their own vehicles. But he said on Tuesday he wanted the department at no more than five vehicles by the end of this year.
“I want to be back at five where we belong,” Hawley said. “I just don’t want us carrying six cars.”
Other departments’ spending made final on Tuesday showed small increases except in the case of public works, which dropped $6,400 to $745,916, largely due to a decrease in equipment purchases. 
The administration budget increased about $10,500 to $384,207, with small hikes in insurance, legal and IT line items. 
The city’s fire department and recycling costs — surrounding towns share those expenses — rose by a few thousand dollars.
There was some debate on sewer fees. Hawley proposed and the council backed, 5-2, with Aldermen Mark Koenig and Jeff Fritz opposing, an increase from $87.50 to $96 per quarter, in the base rate for most residential and commercial uses. That equates to an increase of $34 per year. 
A corresponding increase in the few larger commercial users who pay by the gallon will also be put in place, Hawley said.
Koenig and Fritz said because it had been 10 years since the last sewer rate increase a bigger hike would be justified, rather than revisiting the issue in a year or possibly two years, as Hawley said was likely. 
Andy Kirkaldy may be reached at [email protected].

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