The saying goes that democracy is messy. But on Monday night, as the City Council acted on Burlington’s budget and related financial decisions covering the fiscal year that begins July 1, the process was neat, efficient and close to unanimous.
A dozen FY 2013 budget resolutions were approved without objection, including $64 million in general fund expenses, $4.6 million for capital improvements, and authorization of bonds and borrowing for the Burlington International Airport and Public Works Department. The local property tax will decrease slightly, but the school tax will rise with the March approval of an 11 percent school budget increase.
The only official objection came on the question of whether rates for water and wastewater services should increase. According to the resolution, “the current rate schedule will not meet the over-all revenue requirements.”
Democrat David Hartnett cast the only no vote of the evening on increasing the water rate from $3.17 to $3.33 per 100 cubic feet. The wastewater rate will go from $5.18 to $5.44. Afterward Hartnett called it a vote against a tax increase. Yet even he praised the overall process and the effectiveness of the new administration.
Hartnett, a key backer of Republican Kurt Wright in the recent mayor’s race that put Miro Weinberger in office, offered another note of skepticism when the council voted to extend a $1.2 million services agreement between the city and the University of Vermont for one year. The current deal is set to expire this week, but UVM’s new president, Thomas Sulllivan, doesn’t start work for a few weeks. Weinberger and Interim President John Bramley met recently and agreed to extend the status quo.
“A year is a long time,” said Hartnett. He pointed to mounting pressure to address housing problems related to students and the responsibilities of the university, matters that have consumed considerable council time in recent months.
The wait for an answer to another lingering question will be considerably shorter. Weinberger also announced on Monday that on July 2 he will announce his “go-no go” decision on what to do about the languishing project to redevelop the Moran generating station on the waterfront.
Downgrading, creative thinking and good fortune
Earlier in the day, Weinberger briefed the press on the proposed budget in his City Hall office, flanked by Council President Joan Shannon and Interim Chief Administrative Officer Paul Sisson. In the process he stressed the fulfillment of another campaign pledge: addressing the city’s immediate financial crunch without a property tax increase.
He also highlighted plans to increase spending for the Penny for Parks program, complete rebuilding the bike path after hurricane flooding in 2011, and address the “liquidity concerns in the water and wastewater enterprise funds.” The latter were a contributing factor to a recent downgrading of Burlington’s debt rating from A3 to Baa3, “with a negative outlook,” by Moody’s Investors Service.
The downgrade is expected to increase the cost of municipal borrowing but leaves the city at “investment grade.” In practical terms this could add $55,000 in interest on $3 million in long-term debt in the next year, according to the CAO’s office.
In a statement issued after the downgrade, Weinberger noted that the Moody’s analysis calls for less reliance on short-term borrowing and reduced cash pool loans to city enterprises. “This roadmap confirms the prudence of numerous rehabilitative actions taken over the last year, including new initiatives by my administration during the last two and a half months that will positively shape the coming year,” he said.
Shannon attributed the smooth budget development and approval process to early involvement of the City Council during a series of work sessions held over the last month. The process revealed several areas for modifications, she said, specifically mentioning initial revenue projections provided by the Parks and Recreation and Fire departments.
“In the past there was little time for councilors to develop responses,” Shannon added. This year they had the opportunity. The final budget vote on the Board of Finance was unanimous, a sign that the process was effective.
The resolutions approved on Monday were introduced and defended by Sharon Bushor and Karen Paul, two independent members of the Finance Board. Paul described the budget as part of the “path to right our city’s ship.” She also called it the result of a combination of “some good fortune,” in the form of revenues that exceeded early projections, along with creative thinking.
Bushor, who most consistently raises budget questions on the Finance Board, appreciated the new process and was generally satisfied with the outcome. But she did have lingering concerns. As an example she pointed out that budget modifications may be needed if various assumptions embedded within it prove to be incorrect.
The example she provided was the expectation that AmeriCorps volunteers will be available to assist with a Fletcher Library project for new Americans. If that does not happen, she wanted some assurance that the necessary change would be made in the budget.
Sisson has pointed out that the new technology being phased in by his office will increase the ability to monitor and manage budgets. Asked whether this could mean more frequent council review and modification, Shannon said it was possible but “we’ll be better educated in the process.”
Republican Vince Dober, a frequent critic of past budgets, was happy to admit that the administration had done “an awesome job. I’ve been asking for years, decrease our taxes, you guys did it, so thanks guys.”
Borrowing, parks and building capacity
In addition to adopting a budget and setting the annual property tax rate, the council approved $5 million in short-term borrowing by the airport for capital improvements and up to $5 million more to help with its normal operations, based on anticipated revenues.
Other resolutions covered short-term borrowing in anticipation of revenue from the water and traffic divisions of the Public Works Department, $1.25 million in school bonds for capital improvements, and $7 million in public improvement bonds for the city and Burlington Electric Department.
Not even the resolution covering the use of Penny for Parks funding produced debate. Last year, residents repeatedly turned out in force at City Council sessions for heated discussions of spending the one-cent tax earmarked for park improvements. The main dispute was over $150,000 for a new concrete skatepark on the waterfront.
During development of the new budget, Weinberger pointed to a different problem: the city has been under-spending on the whole program. Although Penny for Parks makes about $350,000 available annually, less than a third of the authorized investment has actually been used in the first three years, “and numerous Park properties have been allowed to unnecessarily deteriorate,” according to a June 15 memo from the mayor to the City Council.
The new budget reverses this trend, allocating more than $580,000 for dozens of projects next year. Big ticket items include $120,000 for renovations to the upper deck of the boathouse and $75,000 to overhaul the softball field at Leddy Park. Also on the list are bike path improvements, completing the skatepark overhaul, and a major project to re-imagine and remodel City Hall Park.
“We’re also building capacity,” Weinberger added. This includes having the right personnel to design and complete various projects, along with an overall plan that “will give the City a detailed roadmap for making future Parks investments.”
After the budget votes Weinberger reassured the council that even the downgrade of Burlington’s credit rating has a silver lining. The financial community has reacted well, he claimed, and the impact so far is “not as significant as feared.” The jump in borrowing rates is half of what was anticipated, Weinberger noted, “a sign of confidence in our collective direction.”
