South Burlington’s city council approved a lean general fund budget just one percent higher than last year — despite rising utility costs, scrawny Local Option Tax Fund gains and lasting aches from the COVID-19 pandemic.
It comes in at $26,599,754.
At a Jan. 4 meeting, Deputy City Manager Tom Hubbard described it as the “most challenging” of his tenure in South Burlington government. Both he and City Manager Kevin Dorn plan to retire this year, unrelated to budget stress.
Councilors also approved budget proposals for a capital improvement plan and enterprise fund at the meeting. Voters will decide to keep or toss out the three budgets in March.
Should voters approve the proposed general fund budget, the tax rate will increase by 0.98 percent. Assuming the grand list increases by about one percent, Dorn said the cost for an average condo will increase by $13.01 and the cost for an average single-family home will increase by $18.76.
The main cost drivers for the proposed budget include climbing healthcare, water and stormwater costs; reduced interest rates in investments; worker’s compensation; property taxes; and income loss from Local Option Taxes.
An anticipated revenue drop of $262,000 — another COVID-19 casualty — will likely affect the budget, Hubbard and Dorn reported. The decrease is mainly because of the Local Option Tax fund, which usually rakes in buckets of tourist dollars. Not in a pandemic year, though. The normally reliable income took a hit last year when state officials discouraged tourists from visiting Vermont, forcing many restaurants, bars, hotels and other businesses to limit in-person traffic or shutter altogether.
The 2022 general budget allows for the rising cost of water and stormwater. For an average user, the cost of water from the Champlain Water District will increase about $5 per year. Other costs relate to chemicals needed to maintain phosphorus discharge, and unplanned stormwater expenses along Kimball Avenue Bridge, according to Justin Rabidoux, public works director.
For all three utilities — water, sewer and stormwater — the total cost for an average user will increase to about $14.50 for next fiscal year.
City officials also left nine staff positions empty in their proposal for fiscal year 2022.
In lieu of the missing staffers, some administrative positions will merge into one, adding responsibilities to current staff; positions in the Recreation and Parks Department vacated last year will remain empty; and other requests for staff to South Burlington Fire, South Burlington Police and to the Planning and Zoning Department will go unmet.
Paul Conner, director of planning and zoning, had hoped to hire a city planner to broaden the number and range of projects the department could spearhead. The community is interested in more than just regulations, he noted, but projects like the climate action plan, pop-up markets for entrepreneurs and sustainability initiatives will be postponed without a city planner.
Fire Chief Terry Francis said fire and rescue saw an increase in non-coronavirus related calls and that certification should be budgeted for before it runs out in 2023. Should the department lose training certifications, Francis stressed that people may have to wait up to an hour and a half for mutual aid to respond.
The absence of an additional firefighter will eventually catch up with the city, Francis cautioned.
Councilor Meghan Emery questioned what the tax rate would look in the future if the city’s desired level of staffing, training and services were restored. Hubbard postulated, based on past experience, that the tax rate would likely jump 2-3 percent, although the rate would likely be revenue-based.
Alternatively, he suggested taking money out of the fund balance to try to restore deleted budget items without affecting the tax rate. “Or you could go to a separate bond vote on a particular item,” explained Hubbard, which could allocate money to special projects without raising the tax rate.
“I think the council in future years will have those decisions to make,” he said.
Registered voters will choose yes or no on the general fund, enterprise and capital improvement plan come March 2.
City officials plan to host a budget session night before Town Meeting Day in keeping with tradition.