MONTPELIER – The cost of running the Capital City would drop nearly $400,000, and the municipal portion of the tax rate would tick up less than 1% based on a budget proposal that will be the subject of the first of two public hearings Wednesday night.
City councilors, who tentatively settled on the $14.7 million spending plan after making a last-minute addition last week, are ready to consider public feedback during their online meeting at 6:30 p.m. Wednesday.
The hearing – the first of two that will be held before the council must finalize the city’s Town Meeting Day warning Jan. 20 – will test support for a proposal that was crafted amid ongoing fiscal uncertainty associated with the COVID-19 pandemic.
With the School Board considering a budget that would require an estimated 17.6-cent increase Montpelier’s education tax rate, the budget embraced by the council would add less than half a cent to the tax rate. Approval of a separately voted $23,500 appropriation for Central Vermont Home Health and Hospice would boost that figure to 0.7 cents, or 0.6%.
Those numbers reflect a deliberate attempt to provide relief to citizens and businesses that are struggling financially as a result of the pandemic and a response to an anticipated revenue shortfall caused by the COVID-19 crisis.
The $14.7 million budget calls for spending nearly $400,000 less than the $15.1 million councilors adopted a year ago – a 2.6% reduction.
Though the spending plan prepared by City Manager William Fraser will retain a full range of city services, and doesn’t contemplate any layoffs, it is built on the assumption six currently vacant positions, including a police officer and a pair of public works employees – an engineer and street crew member – won’t be filled during the coming fiscal year. A vacant position in the finance office will remain that way, and two retiring recreation maintenance positions won’t be filled.
The budget reflects a negotiated 2% pay raise for unionized employees and a better-than-expected 4% increase in health insurance expenses.
Fraser also recommended one-time adjustments to the city’s capital projects and equipment plans. The budget the council is considering calls for cutting nearly $430,000 from the capital plan and trimming an additional $46,000 from the equipment plan – a combined savings of roughly $475,000.
Fraser has indicated those cuts could be restored if outside funding becomes available, or non-tax revenues, which are projected to drop 9.3% during the coming fiscal year, rebound.
Councilors have made some surgical revisions to the budget proposal in recent weeks. Members restored $131,050 for the city’s “community fund,” which is a source of revenue for outside agencies that don’t petition for ballot access. Councilors also added $45,000 for the local homelessness task force, and restored $50,000 of the $110,000 Fraser had suggested could be cut from the Housing Trust Fund.
The council, which met with representatives of the Montpelier Development Corporation last week, has not restored $100,000 that was cut from that organization, though a future commitment was discussed. It also appears ready to embrace a one-year reduction of $20,000 to the “arts fund.”
Councilors did agree to include $20,000 in first-time funding for the Capital Area Neighborhoods (CAN) project that served as useful resource for residents, as well as a way to promote participation during the pandemic.
For budgeting purposes the city is projecting a reduction of $230,000 Montpelier receives under the state’s payment in lieu of taxes (PILOT) program, a $67,000 reduction in local option tax collections, and a $525 reduction in parking-related revenue.