Middlebury tax surplus eyed for major projects
MIDDLEBURY — This year’s Middlebury town meeting warning will include funding requests for major infrastructure projects, including a new passenger rail platform, water main replacements, flood mitigation work in the Middlebury River, and the repurposing of some of the former wastewater treatment plant buildings for storage.
The good news for Middlebury taxpayers is that town officials are seeking to substantially fund these projects using surplus from the local option tax (LOT) fund.
It was on March 20, 2008, that Middlebury voters endorsed a 30-year local option tax of 1 percent on sales, rooms, meals and alcohol purchases in town in order to bankroll the community’s $7 million debt on the Cross Street Bridge project. Middlebury College agreed to underwrite the remaining $9 million for the $16 million project.
Middlebury’s local option tax revenues have comfortably exceeded the town’s annual debt service for the bridge, to the extent that the surplus has now grown 2,628,437 million, according to Town Manager Kathleen Ramsay. Town officials have been considering uses for at least some of the surplus, which has far exceeded the purpose for which it’s intended: Maintenance are repairs for the Cross Street Bridge.
The selectboard on Jan. 28 is scheduled to endorse a fiscal year 2021 budget of around 11.5 million, of which roughly $7.5 million would be raised through taxes. That budget — which will be fielded by voters at the March 2 annual meeting — would call for a 1.38-cent rise in the municipal tax rate. But Ramsay on Tuesday said that tax rate bump could be lowered to a penny if local option tax surplus is applied to debt service on the four capital projects to be featured on the March 3 Town Meeting Day ballot.
Here are those projects:
• A $2.5 million plan to replace deteriorating water main in the Court Square area (see related story). Ramsay is suggesting that $1 million in LOT tax surplus — spread over four consecutive fiscal years — be applied toward that projects, with water ratepayers and potential grants picking up the rest.
• Using a combined total of $557,040 in LOT surplus for miscellaneous capital improvements ($400,000); the town’s share of a new passenger rail platform that to will be built in between Middle Seymour and Maple Streets ($57,040); and scheduled downtown sidewalk and curbing improvements ($100,00) to be made in concert with the $72 million Middlebury rail bridges project.
• Covering the town’s $500,000 share of a $2 million plan to make the Middlebury River less prone to flooding in East Middlebury village. The Federal Emergency Management Agency would cover the remaining $1.5 million in improvements, to include repairing the existing flood wall and extend it 150 feet downstream, armoring sections of the Ossie Road berm, and removing sediment from chute entrances and the top of large sand bars.
Floating a seven-year-bond, with the debt paid through LOT surplus, as opposed to a conventional 20-year bond would save the town $105,00 in interest, according to Ramsay.
Ramsay has recommended the LOT money be tapped over seven years to meet the town’s $550,00 share.
• Using $850,000 in LOT surplus, spread over seven years, to rehab small outbuildings at the former wastewater treatment facility on Lucius Shaw Lane. Those buildings would be used by Middlebury Police — whose headquarters is located on the former treatment plant land — for storage of vehicles and equipment.
Floating a seven-year-bond, with the debt paid through LOT surplus, as opposed to a conventional 20-year bond would save the town $178,809 in interest, according to Ramsay.
“It looks like you have the capacity to do this,” Ramsay said of the LOT appropriations.
Ramsay provided estimates for the LOT yield through fiscal year 2030. And those estimates indicate that even with the draw-down she is recommending for the aforementioned capital projects, the LOT surplus is conservatively projected to climb to around $3.2 million within 10 years. And that also reflects an ongoing annual appropriation of $400,000 in LOT money to beef up the town’s capital improvement budget through fiscal year 2030.
Adding to the good financial news, according to Ramsay: The town’s lending institution recently re-issued bonds for the Cross Street Bridge project at a lower interest rate, an adjustment that’s expected to save the community $1 million during the remaining life of the 30-year bond.
The board is scheduled to approve the 2020 town meeting warning at its Jan. 28 meeting.
Selectboard Chairman Brian Carpenter supports Ramsay’s proposal for use of the LOT surplus.
“The nice thing is… it does not impact our Cross Street Bridge fund balance; we’re just using what we’re gaining each year,” Carpenter said. “And we’re still able to draw $400,000 in additional support for other infrastructure projects that we know we’re behind on. I would love to see us support something of this nature.”
In other action on Tuesday, the selectboard:
• Heard pitches from the nonprofit organizations End of Life Services and Middlebury Area Land trust for increases in the amount of community funding they receive on town meeting day. MALT officials are requesting a $1,600 bump, from the current $5,400 to $7,000; End of Life Services is seeking an increase of $1,000, from the current $2,000 to $3,000.
Reporter John Flowers is at [email protected].
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