VERGENNES — The Vergennes City Council on Tuesday dropped a penny from the municipal portion of the Vergennes tax rate for the upcoming 2021-2022 fiscal year, lowering it from the 92 cents of the past two years to 91 cents per $100 of assessed property value.

Councilors also adopted a general fund budget — exclusive of the sewer collection and treatment system, which is funded by user fees — that lowers spending from the current year by about $48,700 to $2,719,557.

The council also chose to use $109,750 of a fund balance from the fiscal year that ended in June 2020 to lower the tax rate.

City Manager Ron Redmond and City Treasurer Abbie Farrar estimated that fund balance to be $240,340. That means if Vergennes can live exactly within its adopted budget this fiscal year — July 1, 2021, to June 30, 2022 — it would enter the next fiscal year with a $130,370 general fund balance.

Vergennes officials — like those in other county and state communities — are still waiting for confirmed statewide school-tax rate data to allow them to send out full property tax bills.

But according to the most recent estimates from the Addison Northwest School District, the Vergennes homestead tax rate could drop from $1.8458 to $1.8220.

If those estimates are accurate, city homeowners could be looking at about a 3-cent drop in their tax bills, or roughly $30 less per $100,000 of assessed value in their tax bill for the coming year, assuming they pay on the full value of their homes.

In Vergennes those bills will include a small additional municipal charge, well under a penny, that allows the city to offer voter-approved property-tax breaks to disabled veterans and service organizations, such as the Vergennes Area Rescue Squad and a Masonic Lodge.

Tuesday’s council decision to set the city rate at 91 cents followed two years of a 92-cent rate. Councilors pegged the municipal rate at a little more than 80 cents in 2017 and 2018.

There was debate on Tuesday whether the council should wait one more week to set the rate. Councilor Mel Hawley said more research into where the city stood on delinquent tax collections and other last-minute financial questions could reveal a rosier picture — possibly even by as much as $50,000.

“I think our position is better than that,” Hawley said.

That amount would allow the council to devote more money into infrastructure work, especially sidewalks and paving. Hawley pointed out, and other councilors agreed, the fund balance came largely from public works, which could not complete many projects in the 2020 fiscal year due to the COVID-19 pandemic.

Redmond and Farrar were skeptical the extra week would confirm the numbers, however.

“I think it’s going to take until the end of July to see,” Farrar said. “I don’t think it’s going to make a huge difference in a week.”

Councilors including Sue Rakowski, Dickie Austin and Ian Huizenga suggested the council could pivot during the fiscal year and authorize infrastructure work if Hawley’s prediction proved to be correct.

“This could help ease the sting out of some of these cuts,” Huizenga said.

Councilors ended up approving the budget as Redmond presented, with Mayor Matt Chabot asking Redmond to monitor the finances to see if the city could afford “the capital projects that have been discussed.”

BUDGET DETAILS

Unlike in other Addison County communities, in which voters approve spending plans on Town Meeting Day that have been proposed by their selectboards, in Vergennes the city council sets the tax rate before the close of each fiscal year (June 30).

To do so, first they most also craft a budget for the upcoming fiscal year. The council reviewed and discussed in the past two months each individual department’s spending plans and largely reached consensus on each before Tuesday. 

Technically, the council also approved the sewer budget, but it is not included in the tax rate. They also approved a Vergennes Fire Department budget, but because that department also receives funding from Ferrisburgh, Panton and Waltham, for which it also serves as a first responder, the city general fund budget only includes the city share of the department cost.

An across-the-board 3% salary increase for all employees not in the police department is incorporated into the budget. Police salaries also rose, but officers have a separate union contract.

The single largest component of the budget remains the Vergennes Police Department, at $959,787.

On paper, that figure is up by about $108,000 from the current level, but $72,500 of that is due to an accounting change.

Rather than leave the annual bond payment for the city police station’s construction in the general fund, councilors decided that it should be included for accounting purposes in the police department budget.

Other than that, the major apples-to-apples increase in the police budget included contracted wages for the members of the department totaling more than $20,000. Overtime projections dropped by $6,000, but other smaller line items rose.

The next largest department budget is that of public works, budgeted to drop about $9,000 to $828,514. Salaries and the cost of winter road materials are increasing for public works, but the increases are more than offset by lower health insurance spending and other decreases.

The administration budget is pegged to rise almost $30,000 to $552,949. An increase in hours for the administrative assistant position, higher salaries, and more expected legal expenses are pushing costs up, even with a drop in expenses now that a backlog of recording and accounting has been dealt with, according to Redmond.

General fund expenses are dropping by about $36,000 to $284,307. The move of the police station payment is behind the lower face value, but a payment for a new public works dump truck ($23,000) and a larger city share of Vergennes Fire Department expenses ($7,000) is moving the needle back the other way.

Also included in the budget was a $7,000 raise for the city’s recreation coordinator and $5,000 for recreation improvements.