CEDO’s enterprise fund, which is separate from the city’s general fund and is mainly funded by federal grants, has carried a budget deficit for about 10 years. The fiscal year 2015 budget marks the first time the city has included a plan to address the deficit, said Peter Owens, director of CEDO. Previously, CEDO would borrow funds from the city to cover the deficit at the end of the fiscal year, Owens said.
The city approved the fiscal year 2015 budget with this potential deficit in mind and had identified that gross receipts tax revenues could provide $105,000, the traffic fund could provide $50,000 and the sale of the Browns Court city-owned lot could provide $25,000 to cover the deficit, according to the city’s Budget Year End Transfer Resolution.
Mayor Miro Weinberger said CEDO’s budget deficit has been a chronic issue. The federal government has been cutting back funds the department uses and tightening the rules that CEDO has to follow in how they spend certain money, he said.
“So, some of what CEDO has done historically, they no longer have the funds to do,” Weinberger said.
In the fiscal year 2014 budget, which was the first budget with Owens as director, the department ended up with a $240,000 deficit, despite attempts to develop new revenue, Owens said.
To address the deficit ahead of time, CEDO presented a budget plan for the fiscal year 2015 budget that would not require it to borrow money, Owens said. First, CEDO reduced its expenditures by cutting one position and other efficiencies, which pared the deficit to $180,000, he said.
“We have made the decision in the FY16 budget that CEDO is becoming part of the general fund, not its own enterprise fund as it has been in the past,” Weinberger said.
Weinberger said that, while it is unfortunate that CEDO is not able to continue to pay for all its activities through federal dollars, he feels it is important to provide the difference after reflecting on the work it does for the community.
The fiscal year 2016 budget was approved by the city council at its June 15 meeting, according to that meeting’s agenda.
Karen Paul, Ward 6 city councilor and board of finance member, said that she doesn’t believe anyone is particularly happy with having to fill the gap, but the reality is that it has to be filled.
“We’ve made a commitment that we will follow this along and that we will make sure that we’re keeping to our budget so that we’re not in a situation like this next year,” Paul said. “Based on that, I am supportive of this.”
During Monday’s board of finance meeting, Sharon Foley-Bushor, Ward 1 city councilor, was not as pleased with the resolution, especially when it came to the use of the traffic fund.
“I feel like we’re robbing Peter to pay Paul,” she said.
Weinberger didn’t see the situation in the same way as Foley-Bushor.
“From my perspective, it’s not robbing Peter to pay Paul, because Peter is substantially more wealthy because of Paul,” Weinberger said.
The way the Burlington city charter is written, the traffic fund can only be used for expenses related to the parking system, Weinberger said. The fund is basically used to make investments in the garages and pay for capital costs related to Burlington’s on-street parking meters, he said.
“The pot of money had basically run dry about a year ago,” Weinberger said. “The revenues coming in were no longer keeping up with operating costs, let alone the very substantial capital costs and investments that need to be made to the garage system.”
CEDO was a “key partner” in making the traffic fund solvent again through a partnership with the Department of Public Works and the Burlington business community that brought the public’s attention to the parking system’s issues, he said. Because of this, Weinberger said he sees CEDO using some of the traffic fund to help cover their deficit as “totally appropriate.”
The sale of Browns Court has been delayed after the Development Review Board’s denial of the development plans from the buyer last spring, Owens said. Browns Court is a city-owned lot at the corner of King Street and St. Paul Street, and is in the process of being sold to Champlain College, he said.
The college plans to combine the lot with the adjacent former Eagle’s Landing lot that they purchased in 2009 to build an apartment complex with 115 total units, according to plans it presented to the Burlington Development Review Board at the March 18, 2014, meeting. After the board’s denial, it took about a year to negotiate a settlement, but the path is now cleared for a sale and the lawyers of Champlain College and the city are drafting the final purchase and sales agreement, Owens said.
“We are reasonably confident that [the sale] will happen in the next three to six months,” Owens said.
The budget transfer was unanimously approved by the board of finance and the mayor at the July 6 meeting, and is being recommended for City Council approval at its July 13 meeting.
