Final budget on the way

Mountain Times
By Stephen Seitz

KILLINGTON – Next year’s town budget should be ready by the next time Killington selectmen meet, Town Manager Seth Webb told the board at the regular meeting on Jan. 6.

“At the end of the year (2014), we had just over $6.68 million in debt,” he said. “That’s composed of things that are in bonds — garage, highway, library, golf,” he said. “That also includes $890,000 for the Route 4 sewer. Then the third area is equipment leases and loans, things like the fire trucks, the grader, the loader, and golf equipment which we have annual payments on.”

Despite progress on the debt last year, the town had a net gain in debt this year.

“Last year at the end of the year, we were at about $5.9 million,” Webb said. “We paid off approximately $1.1 million in principal this year, but we did take on a little more than $1.7 million in new debt.  We had the highway bond to fix Killington Road and West Hill, as well as the two bridges on Thundering Brook.”

Other reasons for the debt included financing a number of town purchases: a brush truck for the fire department, a plow truck for the highway department, a police cruiser, and a loader.

“For the big picture, we’re obviously paying down our debt,” Webb said. “We took a big step down last year, and then we made a little bit of progress because we took on new debt this year, but we had a net gain in debt. We’re well within the legal limits of how much debt we are allowed to carry. According to Vermont law, you can carry 10 times the amount of the grand list, and we’re carrying less than one times the amount of the grand list.”

Chairwoman Patty McGrath said she was impressed by the progress made in paying off the golf course debt.

“So the total golf debt is $3,455,000?” she asked. “That’s down considerably in five years, because in 2009 we were over $5 million.”

“The majority of what we paid down this year was golf debt,” Webb replied. “We have another $217,000 put away for the balloon payment, when that comes due in 2022.”

Webb said he wanted board guidance in order to finish the budget.

“I have basically updated the budget with the changes we have made to date,” he said, “and I have updated the projections for the end of 2014. We’re putting in the final expenses and revenues for 2014 right now, and we’ll have that for the next meeting. This should give us enough of a tool to understand what we’re looking at for the end of the year, because I updated the major revenues, and I know our expenses held the line.”

Webb said the one of the significant increases in the budget for next year is the plan to hire three new full-time people for the police, library and recreation departments, which results in increased costs for salaries and benefits.

“Health insurance represents a 33 percent increase due to the addition of three positions. That’s health care for three different positions, and that’s about 61 percent of the (health care) increase. The rest of the increase is due to the increased cost of health insurance,” he said.

Webb said the town was projecting an operating surplus of about $213,000 this year.  He advised against using the all of surplus to offset taxes.

“If we use the surplus to artificially deflate taxes, then the rise will be steeper in future years, and we want to make things more predictable,” he said.

McGrath wanted to know more.

“Does the $213,000 include the increase (from FEMA) we hope to get?” McGrath asked.

“No,” replied Webb, “that’s conservative. I’m hoping it will be higher.”

The town’s cash flow situation is getting better, he said. “At the end of this year, we had $4.5 million in the bank, and we owe $4.4 million in June. Last year, we had $4.3 million in the bank, and we owed $4.4 million in June, so we’re about $200,000 up on our cash flow,” he said.

Selectman Chris Bianchi said he didn’t like the idea of raising taxes just for the purpose of funding town operations.

“I feel like we’ve been underfunding capital a long time, and we’re trying to correct that,” Bianchi said. “So a tax rate increase due to capital funding is easier for me to justify. The operating we should try to keep as flat as we can.”

Bianchi also cautioned against expecting too much flood reimbursement money.

“Let’s say we don’t get the $200,000 from FEMA,” he said. “At some time we’ll have to cut our losses there and zero out that account. Maybe we can put the $200,000 toward zeroing out that account. If we get the revenue from FEMA next year, then we’re assured, and that money can go into the capital in the following budget, because now it’s a done deal.”

“Where do you put it in the short term?” Webb wanted to know.

“That’s the problem,” Bianchi said. “I don’t know. Technically, we know about it, so we’re supposed to use it to offset taxes, unless we use it in the budget.”

The board is scheduled to meet again on Jan. 20.