This is intended to provide insight to the revised fiscal 2015 Barre budget proposal to be voted on Tuesday. It is also intended to address some often heard comments and/or misperceptions regarding the city’s operating budget and the municipal tax rate components and proposed increase.
It is important for voters to realize the significant effort that went into the development of this budget proposal by department heads, the city manager, the budget committee and your City Council. All the city residents who volunteered were appointed to the budget committee by the City Council.
While the committee has lost three members over two years due to attrition and the time commitment required to serve on the committee, there are four very knowledgeable members remaining: Chairman Justin Johnson, John Hannigan, Linda Couture and Aimee Pope. Each of these individuals brings solid budgeting knowledge to the committee due to their private and/or governmental sector budgeting experience and/or specific knowledge of city operations.
This volunteer committee represents you, the voters, in critical budget scrutiny that is separate and distinct from the city manager’s office and City Council. This committee has been your eyes, ears and direct citizens representation to the budget preparation process. The budget committee has gone on record to unanimously endorse the budget proposal being presented to the voters.
Both the original budget defeated on Town Meeting Day and the revised budget proposal to be voted on next week reflect substantial work by all who participated in the budget development process. Preparation of the budget started last July with the budget committee meeting 12 times to critically review and revise this budget proposal. The $11,185,472 general fund operating budget being voted on next Tuesday represents the ninth version of the budget. While this represents a 3.15 percent increase in the municipal tax rate over fiscal 2014, only 1.3 percentage points of that increase is due to operations. This compares very favorably to the 2013 Social Security cost of living increase of 1.5 percent.
The overall projected increase for the fiscal 2015 tax rate is projected to be 3.15 percent. Here is how that increase breaks down:
General operations, inclusive of limited new initiatives, 1.3 percentage points.
Cemetery debt retirement plan, 0.33 percentage point.
Voter-approved assistance requests, 0.03 percentage point.
Local agreement rate, 1.49 percentage points.
The increase in the operating portion of the budget contains very limited new initiatives to include a half-time delinquent ticket administrative clerk; a half-time meter enforcement assistant (both positions are part-time with no benefits); parking administration fees and a revenue anticipation note installment payment supporting the revamped downtown parking meter program, which is projected to increase meter and permit (nontax) revenue by approximately $105,000. The total cost of these initiatives is approximately $64,000 of the estimated $108,000 increase in the operating budget.
The balance (roughly $44,000) of the operating budget increase comes principally from inflationary increases in expenses. Also new this year is a $26,000 expense to begin to retire the former cemetery commission debt that was absorbed into the general fund budget, with explicit voter approval in 2013, for the specific purpose of recognizing and paying off this debt.
It is important for voters to realize, and hopefully appreciate, that only 1.3 percentage points of the increase in the tax rate comes from operations, and that the balance of the 3.15 percent overall tax rate increase comes from increases in a number of non-operating expenditures separately and explicitly approved by the voters March 4. These separate expenditures include: streets/capital equipment budget ($835,500), 19 separate voter-approved assistance requests for central Vermont nonprofit organizations ($139,900), and the local agreement rate ($143,000). The large increase ($119,900) in the local agreement rate in fiscal 2015 comes principally from the local economic development initiative most notably seen in the City Place and Blanchard Block redevelopment projects, and their corresponding tax stabilization agreements. However, there are also a number of other new, but much smaller, tax stabilization agreements that are helping to renew dilapidated structures within the city and, equally importantly, grow the grand list over time.
It also merits noting that the local agreement rate also includes tax exemptions for Good Samaritan Haven and Project Independence, and a local increase in the veterans exemption from $10,000 to $40,000, all of which again have been separately and previously approved by city voters and have nothing to do with the city’s operating budget.
The city administration and City Council are working diligently to find additional sources of non-property tax revenue to minimize increase in the tax rate. Increases on the revenue side, which help offset expenses, include increased parking meter and parking permits revenue through the recently implemented meter revitalization program, increased parking permit sales, including all the new workers at City Place and Blanchard Block, more effective parking ticket enforcement and fines collection, and a significant (greater than 50 percent) increase in cell tower site fees at the auditorium — due to successful renegotiation of contracts with cell carriers and expanded carrier facilities requests.
Other operational and/or cost containment initiatives that the city is undertaking are the formation of a regional public safety authority with the city of Montpelier, and a comprehensive organization and management review of the city’s staffing and operational model. The latter has been independently conducted by Special Projects Manager Pat McDonald at the request of the city manager, and is currently undergoing thorough review by the City Council over the course of three workshops over the next five weeks, which are open to the public. An initial assessment of this review is that the city is leanly staffed and is operating with a minimal staffing to support the full array of municipal services currently expected by our residents. However, Ms. McDonald has also identified other ways to explore improving the efficiency of operations and to possibly generate more revenue to offset operating expenses in future years.
All of the ideas and recommendations of the report will be thoroughly vetted by the budget committee and City Council over the next few weeks. Those initiatives that survive the review process will then be implemented by the city manager and department heads.
We have arranged for the last three or four spring and fall seasons to conduct joint yard waste events with Barre Town, which the city has funded through grants from the Central Vermont Solid Waste Management District at no cost to the city. The city fire and police department directors are very proactive in negotiating dispatch service contracts for seven other agencies for additional contract revenue of approximately $70,000 per year. In addition, we are now providing contract ambulance billing services to four other ambulance services. Annualized service revenue from the agencies under contract at this time is projected to be approximately $35,000, if not more.
We have a very active local energy committee (BEAR), which has been very active in assisting city staff and Efficiency Vermont to pursue energy saving (and cost reduction) initiatives including the citywide street lights LED change-out that is projected to save $50,000 in power costs starting in January. The committee is also proactive in assisting with energy audits aimed at reducing the heating and power costs of facilities including City Hall, the BOR and the city water and wastewater treatment facilities, to name a few.
A significant new initiative implemented by your city manager, with assistance from all department heads, and with council and voter approval, is the development and funding in fiscal 2014 and 2015 of a capital equipment plan. This long-overdue initiative is intended to avoid, over time, the “crisis” purchases of new equipment to replace old equipment in city inventory that is well beyond its safe and useful life.
The needs identified for planned rotation and replacement of city equipment over the next 12 years exceed $500,000 per year. While the initial funding levels are somewhat less at approximately $420,000 for each of the first two years, this is a major step forward toward expense control and management. This capital equipment plan is funded, at least initially, by reallocation with voter approval of approximately half of the annual street reconstruction funding over the next two years. Just as importantly, this planned capital equipment program and funding reallocation responsibly avoid a tax increase and/or adding this $500,000 to the general fund (operating) budget, and the unaffordable tax increase that would follow.
Similarly, I am working with Jeff Bergeron, facilities director, to develop a facilities capital plan to program the vitally needed upgrade of our municipal buildings. This would be for identifiable needs that go beyond the routine annual maintenance of our buildings’ infrastructure. I anticipate having this plan developed over the summer for funding consideration by the budget committee and City Council as they undertake the fiscal 2016 budget preparation process. Again, the intent is to responsibly plan and fund these very real physical plant needs without adding to the operating budget.
I also wish to address some of the comments or complaints I hear periodically regarding certain areas of city operations. Staff “overtime” related to the city budget seems to be a chronic hot button item. First and foremost, one need to remember that no overtime is unilaterally initiated at the staff level, and virtually all overtime expense in the city is triggered by constituent requests or public safety requirements, whether planned or emergency. All non-civic overtime support required by contractors or others (police details, public works utility support, Civic Center event support, etc.) is billed to the initiating contractor or renter.
The gross general fund overtime expense ($670,374 in fiscal 2013) is the total overtime generated by all eight city departments. Unfortunately, this gross number seems to be taken out of context and is often misperceived to be attributable to just the Fire Department. Granted, this overtime expense is significant, but put in perspective, this cost represents approximately 10 percent of the total personnel expenses for the city in fiscal 2013. That does not appear to be out of order.
In addition, it is important to remember that most of the overtime expended in any given year is attributable to services rendered that also generate revenue. These additional revenues come primarily from ambulance billings, special police details, Department of Public Works contractor charges, and civic center billings. In fiscal 2013, the city received approximately $785,332 in overtime-induced revenue against general fund overtime expenses of $670,374. Thus, the labor revenue generated from overtime billings in fiscal 2013 was $115,000 in excess of overtime expenses.
There seems to be a common misperception that overtime and related expenses are mismanaged and/or “out of control.” This is a chronic misperception and simply not reality. As city manager, I take very seriously my responsibility to see that misuse of overtime is not occurring. That is not to say that we can’t and won’t work hard to find additional overtime cost control, but the illusion that overtime expenses are out of control is just not credible.
Another issue that tends to prompt taxpayer critique is the practice of some city staff taking city-owned vehicles home at the end of the workday. Most, if not all, of these personnel are essentially on call 24/7 to be available for immediate response for fire, ambulance or public works responsibilities. However, I am undertaking a review of this practice and will issue a new city vehicles policy within the next 30 days to address this practice to ensure that city vehicle use is for essential city needs only and in the best interests of the city taxpayers.
Please keep in mind all that this budget proposal supports, and the real progress your City Council and city employees are making on numerous fronts to aggressively continue the redevelopment of the city and the revitalization of our streets and infrastructure. As I approach my fourth year as your city manager, I continue to be convinced of two things: 1) there has never been in the city’s history so many simultaneous community development initiatives and real, visible progress toward the revitalization of our city and the repair/upgrade of the city’s infrastructure, and 2) Barre City continues to improve as a place to live, work and conduct business. This is evidenced by the following projects that have recently been completed or are underway now by the administration and City Council.
Projects completed include: refurbishment of City Hall Park; Merchants Row/Enterprise Alley master plan; Elm to Merchant Street master plan; North Main Street reconstruction project (Big Dig); Barre City Place.
Projects in the grant application, planning or design phase: Barre City/Barre Town connector bike path design; granite museum bike path — segments one and three; Enterprise Alley contamination remediation and redevelopment; Granite Street storm sewer replacement project; North Main and Fourth Street storm sewer upgrade project.
Projects in, approaching or completing the construction phase: Matthewson School playground restoration; downtown electric vehicle charging stations; Cobble Hill transmission main trestle replacement project; granite museum bike path — Smith Street segment; Campbell Place parking lot development project; 12 Keith Ave. (Ormsby property) parking lot development project; Nelson Street hydroelectric project.
The above projects do not include the $4 million Central Vermont Community Land Trust Summer Street campus redevelopment project that is anticipated to start construction this fall, which will be a significant contribution to our downtown revitalization.
It warrants noting that the city education tax rate will remain essentially level. Accordingly, the resulting combined municipal and education tax rate increase being requested Tuesday is projected to be 1.82 percent. This overall increase is very reasonable and compares favorably to the 2013 Social Security cost of living increase of 1.5 percent.
If you got this far, I appreciate the time you have taken to read this commentary and hope this helps to accurately clarify city operations, the ongoing, proactive initiatives to improve our city and to control or reduce costs yet maintain the full complement of municipal services requested by city residents and taxpayers, and the revised budget proposal. It is important that as many voters as possible make the commitment and remember to go to the polls Tuesday to vote. If you still have questions about the proposed budget, please feel free to contact me by phone at 476-0240 or email at email@example.com. Thank you.
Steven E. Mackenzie is the Barre city manager.
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