The town of Milton’s fiscal year 2019 budget offering is only expected to raise the tax rate by a halfpenny, if all goes as planned, town manager Don Turner said.
The $7.67 million general fund budget represents a 2.2 percent overall spending decrease. The $5.75 million tax levy, or the amount raised with property taxes, is up 2.3 percent, town numbers show.
If the grand list grows as expected, the proposal would raise property tax rates by just $.0052. This translates to an additional $12.94 on a $250,000 assessed home, finance director Jessica Morris said.
Selectboard chairman Darren Adams called the budget conservative.
“People can’t afford the tax bills they have now,” he said. “I’m one of those people with a $250,000 home. I’d love to see my tax bill be significantly less than it is.”
The tax rate includes ¾ cents for the fire/rescue reserve fund. A halfpenny each for recreation and roads and sidewalks was eliminated, however, consistent with the selectboard’s vote to stop funding these reserves when it set the FY18 tax rate last August.
The town’s proposal to be voted on Town Meeting is a dramatic decrease from the initial numbers Turner and Morris showed the board in September. Back then, Turner compiled a budget representing the town’s actual needs: At a near 7 percent, 5-cent tax rate increase, he knew it wouldn’t pass muster, but he wanted to show an accurate picture, he said.
Over the course of five meetings, the administration and selectboard pared down the proposal, starting with paving.
In FY18, the town budgeted $600,000 for paving that, when combined with a state grant and fund balance, totaled nearly $1 million.
“We didn’t need to spend all that money in paving,” Turner said of FY19. “[The selectboard] backed out $300,000.”
Still, Turner expects the town to land another $175,000 state paving grant and said with an anticipated $180,000 left over from FY18, the town will spend nearly $600,000 on paving in the calendar year. The paving reduction alone halved the original budget increase, saving nearly 3 cents.
A savings of $109,000, almost a penny, came from switching property and casualty insurance from the Vermont League of Cities and Towns to Travelers through Hickok & Boardman.
The move was prompted by other insurance increases, namely a 15 percent bump for healthcare. The town’s recent turnover introduced employees with varying insurance needs, a cost the town can’t predict or easily budget, Turner said.
The town is now asking all employees to contribute to their premiums. As-is, neither police nor non-union employees pay toward their premiums, but members of the AFSCME union contribute 1.5 percent of their base wages, Morris said.
The matter is still being negotiated, and without wanting to share the town’s proposal, Adams said the concept is a fair ask.
“We’re roughly 50 full-time employees that are receiving healthcare benefits through the town, and it only makes sense that whether you’re in public works, police department or finance that you all be paying … toward health insurance,” he said.
The town will continue shopping around contracted services for auditors, legal and the like, hoping for more savings in FY20, Turner said.
The town also considered capital needs in introducing a $1.9 million bond for a fire truck, excavator, bucket loader, grader and additional sidewalk plow. The general fund will pay about $30,000 in interest on the 10-year loan in FY19, and the first $119,000 principal payment will be due in FY20.
Turner budgeted this strategically: The town has traditionally relied on $340,000 of fund balance to offset the tax rate increase by about 3 cents each year. In FY19, however, Turner proposed reducing this transfer by about $100,000. He’d resume the full transfer in FY20, just in time for the loan principal to kick in.
“That will, in effect, reduce the amount we need to raise in taxes to cover those principal payments that will be due,” Morris, the finance director, said, adding impact fees will also contribute.
Turner said keeping the status quo could have offset the FY19 tax rate by a penny, but “I didn’t think that was fiscally responsible, knowing full well that next year we’re going to have this jump.”
Adams still worries about capital needs but said Turner’s approach was responsible.
“We do the best job we could do [with] the equipment and capital projects that we needed to without having a huge hit to the taxpayers,” he said. “We know that no matter what, there’s going to be significant increases to the school budget, which is really what’s going to drive your tax bill up.”
The town is still finalizing its capital budget. The general fund, however, contains a number of projects for recreation, including repairs to the Milton Outdoor Performance Center, roofing for the dugouts and pavilion, improved electricity at the basketball court and solar motion lights for the parks, all totaling just under $24,100.
The budget also invests in technology, particularly cloud storage for police body camera footage and selectboard documents.
Adams said the budget keeps taxes lower at the cost of not fulfilling program, staffing and capital needs. Turner said he’s “above thrilled” with his first budget proposal as town manager and thinks its strikes a needed balance.
“We are getting this stuff done,” he said. “It gives our employees the tools they need to do their job, and it puts us in a better place.”
Read more about the town’s FY19 bonds in an upcoming issue of the Indy.