This story by Corey McDonald first appeared in The Other Paper on Aug. 31.
The South Burlington City Council last week was presented with a pretty good problem: how to spend all its extra money?
Following two years of conservative revenue projections made in Dec. 2021 during the Covid-19 pandemic, the city now has well over $2 million in surplus funds that it is allocating toward 11 different departments and projects, as well as to its fund balance — money kept in reserve to keep up on operation costs in the event of emergency.
“We are in a really privileged position with this conversation tonight. We have a significant surplus being driven by revenues,” city manager Jessie Baker said. Expenses came in roughly $100,000 over budget on the city’s $28 million budget, she said, “which is very tight, so this privilege is really driven by revenues.”
The main drivers of the revenue surplus include local option tax revenues, ambulance billing services, planning and zoning permitting fees, interest-earned income, and fire and electrical inspection fees that significantly out-performed projected budget amounts.
Revenues from the local option tax, generated from room and meals taxes and sales taxes, for example, came in nearly $1 million over budget, according to city records, and revenues from fire and electrical inspection fees came in more than $850K more than originally budgeted.
“This is the biggest surplus, I would say, in the last two years,” said Martha Machar, the city’s finance director. “We’ve seen surpluses over $1 million, but this is the first time we’ve had over $2 million at the close of the fiscal year.”
Machar continued that the recent construction boom in the city was a significant driver in the fire and electrical inspection fees, as well as the planning and zoning fees, which came in at $185,000 higher than originally budgeted.
“Not every year do we see a lot of buildings going up — that’s why those fees are as high as they are currently,” Machar said.
The council last week voted unanimously to allocate the surplus funding to 11 different one-time spending allocations, including:
• $13,000 for the Trinity Education Center, a youth center in South Burlington headed by Dr. Travia Childs that provides youth and young adults in the community with a safe, inclusive, educational and empowering space.
• $24,028 for new talent acquisition software for the city’s human resources department.
• $200,000 for additional paving projects — the specifics of which will be determined by the city’s public works director.
• $60,000 for the implementation of a school zone on Market Street, and for a school zone engineering study on Dorset Street.
• $130,000 in surplus funds to complete the Dorset Street Signals project.
• $250,000 in surplus funds for upgrades to the city’s police dispatch center.
• $100,000 to the 2024 Illuminate VT community event.
• $164,000 to pay for the costs incurred in fiscal year 2020 for the conceptual design and cost analysis for a public indoor recreation center and other assessed indoor recreation needs.
• $50,000 to pay for grant consulting expenses toward acquiring grant monies to fund the bike/pedestrian bridge project over Interstate-89.
• $15,000 in one-time funding allocations toward a number of social services organizations, including Age Well, Common Roots, COTS, Howard Mental Health, SB Food Shelf, United Way Northwest VT, and others.
• $100,000 for bathroom and kitchen renovations at the city fire department’s Station No. 2 location.
The remainder of the balance, officials said, will be directed toward the fund balance — a budgeted line item that maintains a minimum balance of one month of operating expenditures.
The city, over the years, has grown its fund balance from less than $100,000 to approximately $2.8 million, but the city has made a goal of keeping the balance at a percentage of two months’ worth of operating expenditures, which the injection of remaining surplus funds achieves.
“This is a huge success for our community,” Baker said. “We’ve been able to secure a much more stable financial position for ourselves.”
