Killington homeowner takes town to court over rental

Mountain Times

January 23, 2019

By Katy Savage
The Killington Zoning Board of Adjustment determined Thursday, Jan. 17 that a vacation home is a commercial facility.
The board voted unanimously to uphold Zoning Administrator Dick Horner’s decision that a homeowner should have obtained a permit for a commercial facility when he started renting his single family dwelling unit through the vacation website, Vacation Rentals by Owner.
Homeowner Vincent Connolly purchased the three-bedroom home on Estabrook Road in 2005 as a primary residence.  He shortly thereafter  started renting it to up to 28 people.
The home has caused a stir in the community. Neighbors have complained of loud noise and firecrackers coming from the house.
“This can have as many as 14-20 cars a day that are staying at his house,” said Ed Fowler, who lives a half-mile away.
Connolly’s attorney, Brooke Dingledine, challenged the language in Killington’s bylaws at the Thursday public hearing. She read several definitions from the zoning bylaws and said the home meets the town’s definition of a single family dwelling unit.
“You people wrote the law,” she said. “And now you want to apply it incorrectly.”
This is the first time the town has issued a zoning violation to a vacation home.
Dingledine said it appeared Connolly was being singled out and cautioned the board about proceeding.
“You’re setting a precedent,” she said. “If he’s going to be the sacrificial lamb then you have a lot of work to do.”
Dingledine advised the town to look into all of Killington’s other vacation homes. Kevin Brown, a lawyer who represented the town, shot down that argument, explaining the town doesn’t have the administrative capacity to go after every vacation home.
“It’s akin to ‘look at all these other people speeding,’” Brown said. “[The board] does not have to prosecute everybody. It has to enforce the zoning law.”
This was the second zoning violation Connolly received. He was issued a notice on Aug. 2 for violating zoning bylaws that limit a bedroom’s capacity to two people. The Zoning Board upheld the letter last fall. Connolly appealed that decision to the Environmental Court.  Connolly did not attend Thursday’s hearing but Dingledine told the board that Connolly would appeal this decision as well.

Killington Select Board considers new options for budget

Mountain Times
January 16, 2019

By Katy Savage
KILLINGTON— The Select Board’s consideration to borrow $14 million next year to pay for future costs over a 10-year period has been thwarted.
Town Manager Chet Hagenbarth told the board Tuesday, Jan. 8, that the town can’t borrow the large sum of money up front because the Vermont Municipal Bond Bank requires the town to spend the balance within two-to-three years.
“It has all kinds of legal ramifications – it becomes a nightmare,” Hagenbarth added in a phone interview.
Hagenbarth prepared a 10-year plan for the town at the Select Board’s request.
The $14 million would have been spent on a new public safety building, a new town hall, a new pool at the recreation center and improvements to roadways.
To go from behind other resort towns to ahead of them,“This is what it’s going to take,” Hagenbarth said.
Engineer and scoping studies have not yet been completed for the projects. Board members said the spending timeline changed their minds about borrowing money upfront.
‘“There’s no fluff up there,” Select Board chair Steve Finneron told the audience on Tuesday, explaining the 10-year plan shows only needed expenses. “What we’re looking at now is more of a stepped process.”
The board is now considering borrowing money to pay for some of the expenses next year. The board wants to retire about $2.4 million old debt and pay $1 million to fix roads that have “failed,” including East Mountain Road and Dean Hill Road next year.
The board also considered an article to reinstate the 1 percent sales option tax, which was repealed in 2017, but all three board members said Tuesday they did not want to ask voters to reinstate it.
“It made a little bit of sense when we were trying to do everything all at once but we’re not doing that,” Finneron said.
Killington Resort President and CEO Mike Solimano said the sales option tax burden fell on the resort, which paid about $1.3 million annually.
“We view that as a tax directly on us,” Solimano told the board.
Killington Resort announced a $25 million capital investment this year – the largest in 30 years.
“There’s going to be a whole lot more [investments],” Solimano said. “It’s going to be a lot harder if every time something comes up in town, someone wants to do, they talk about bringing the option tax back.”
In another special meeting on Friday, Jan. 11, Brown Golf Management presented the board with three options for Green Mountain National Golf Course expenditures, which needs about $1.5 million in upgrades over the next five years to stay operational.
The Select Board is expected to vote on a budget for the golf course in another special meeting Tuesday, Jan. 15, after the Mountain Times’ deadline.
Per state rules, the board is required to finalize the budget and article that will appear on the Town Meeting Day ballot by Jan. 24  – 40 days prior to the vote.

Finneron and McGrath weigh in on Killington budget

January 16, 2009
Mountain Times

By Polly Mikula
Towns across the state are putting final touches on their budgets and articles in preparation for the Town Meeting Day vote, March 5.
In Killington, the town is bracing for what is likely going to be a fairly significant municipal tax rate increase, due to retiring past debts (left over from Tropical Storm Irene and Green Mountain Natonal Golf Course, which the town owns) as well as building a sustainable capital fund, which all three members of the current Select Board support.
Last week board member Jim Haff spoke with the Mountain Times. This week we’ll hear from Select Board Chair Steve Finneron and member Patty McGrath.
The Select Board is scheduled to meet Tuesday, Jan. 15, to determine what will be included in the general fund budget and what will be included on the ballot as separate articles to be voted upon on Town Meeting Day. These interviews were done and the Mountain Times went to press prior to that meeting. Visit mountaintimes.info for breaking news.
All viewpoints herein  reflect those of the individual, not necessarily the board as a whole.
Q&A with Steve Finneron
What do you think are the most important facts for residents to consider before casting their vote for or against the budget?
That we have over $1 million in debt that’s been carried on our books for eight years. It’s there. It needs to be addressed.
We’ve put a lot of work into accessing the past, current and future expenses and started this process by looking at them all. Since then, we’ve stepped those plans down to only the things that we feel are very important to address right now – namely the past debts we’ve been carrying, properly funding the town’s current infrastructure and creating a sustainable budget to continue to do so, and building a public safety building to meet current and future needs.
One of the items we are no longer planning to finance at this point in time is the $7 million bond proposal to do Killington Road. [The proposal included sidewalks and lights on both sides of the road, extending it to the resort, redoing the road, and rerouting portions.] That item will not be on the ballot this Town Meeting Day. After starting out with everything, we dropped that one. It was one of the biggest ticket items and something that we still hope to do, but not until after we get these other things working.
I also think that voters should remember that we have no plans to start the public safety building until after other bonds retire, so it will not have an effect on the tax rate.
There’s no fluff in this budget.
We need to get away from taking bridge loans regularly, they just add to the town’s debt. It’s not a sustainable way to budget. And we need to build up our reserve funds again. The state recommends having enough for three months of town operating costs.
We’re taking a longer view approach. This budget is not for just next year. It’s a sustainable budget that properly addresses capital funding for the town’s infrastructure. As it gets implemented, it will save us money down the road. Some of these things need to be done on the front end. It’s not easy. We [being the town] have created this situation. It wasn’t one individual or small group, it’s just been an accumulation over time. This Select Board wants to take care of the town’s needs.
Do you think there is anything frequently misunderstood by the public regarding town finances?
People who ask questions get answers and they’re informed. They may not necessarily like the answer they get, but they get answers. Unfortunately, a lot of people are going to vote who didn’t bother to get answers to their questions. A lot of people don’t know where the money is going. A lot just see the tax rate.
[Town Manager] Chet Hagenbarth has a breakdown of the tax rate by category so you can see exactly what the money is going toward and what makes up the total rate. It helps answer a lot of questions. Some expenses are there whatever you do. That’s what you start with.
I encourage every voter to look into where the tax money is going. It’s not going in anyone’s pocket. I firmly believe that if we can explain what the money is for, voters will be more likely to support it. Really, they are all necessary expenses.
If you want to see a no-frills operation, walk into the town garage! You better have your boots on! And we’re looking to do that sort of thing, elsewhere: Functional and lasting, that’s what we’re after. For example, with the public safety building, we’re looking at materials that will last 60-80 years – this cannot be your traditional wooden structure. We’re not building the future into it now but when the future shows up we’ll be able to easily add on without difficulty or unnecessary costs then.
Also, when something comes up, we’re going to address it. In fact, we’re already doing this with new guard rails up and down the Access Road. Early snow stopped this project early, but we plan to continue in the spring as snow allows.
A lot of folks also don’t understand that we’re literally a couple million dollars behind the 8 ball when it comes to capital funding. When Act 60 was implemented [June 1997], the town started cutting its capital investments in order to offset the large tax rate increase from the state. So this has been a problem that’s been building for years, and we have just been kicking the can down the road.
If the budget and/or articles are voted down, what will be the first things cut?
I don’t think I can say. There’s really no fluff in the budget. We’d have to have open meetings with the public to discuss it. We’ve done this successfully when we had the golf course situation, and with the town manager, and each of those times 30-40 people showed up and we got some good input.
We just hope sthis doesn’t have to happen. We’re available now to explain how we got to where we are and we hope we can answer questions in advance of the vote. We want to put the town in a better place financially and physically.
With regard to paying off the debt, we have to ask: How much money are you willing to spend in interest to pay off a debt that is eight years old? We are currently paying for this interest. Yes, you [the tax payer] are paying for it whether you realize it or not. By getting rid of that debt, it puts us in a better financial situation and on a sustainable path.
One of the options for voters will be to reimplement the 1 percent option tax to help pay bonds to fund future infrastructure development. Do you think this is a good option?
None of us on the Select Board are in favor of reimplementing the 1 percent option tax on sales. But, it’s our job to present different scenarios for different situations, to get public input, and to put the question out there. In the end, we’re only four votes. It’s the townspeople who get to decide.
Personally, I’m against the option tax because there’s an agreement between the town and resort, and the resort has held up their part of bargain. They’ve taken over a lot of the town’s cost and in the past year they’ve also put a massive infusion of money into the ski area. While that investment money doesn’t directly go to the town, it does a lot to make them more competitive with other resorts, and all of that gets more people here and into our restaurants, shops, hotel beds. Right now we’re working well with them and they’re doing a lot that benefits all of us.
Mike Solimano [president and GM of Killington and Pico] was at our last meeting and he said that he’s not against paying their fair share of the tax rate. But the situation we’re in wasn’t brought on by resort, it’s not their fault, and I just think that the town needs to rectify this on its own.
Anything else?
We’re still appealing the $296,000 that FEMA is now requesting that we pay back from [Tropical Storm] Irene. But we’re no longer planning to get it. That debt is included in the total debt we’re planning to pay off. If we do end up getting to keep those funds, they will go into the general fund.
Also, when building the budget, Chet is projecting that the Grand List will only grow 1 percent per year – that’s essentially a flat Grand List, based on historicals. That doesn’t account for any of the new developments planned or listing values increasing – either or both of which could easily happen in the next few years. Any change to that will increase the town’s Grand List and would help lower the tax rate. But Chet has chosen, wisely, to budget on the current conditions, not any assumed future.
Q&A with Patty McGrath
Brown Golf Management presented future proposals for Green Mountain National Golf Course to the Select Board Friday, Jan. 11, via video conference call. Did any surprises come up in their budgets or future capital plans?
No, there were no real surprises. Justin [Stezin] of Brown Golf presented three options for the GMNGC budget and the Select Board chose to mix and match of the options presented.
The goal is for GMNGC to be self-sustaining operationally and eventually capital-wise, too.
Brown Golf has experience and a pulse on the economy as it pertains to golf. In that way, they are better informed to make a plan that works for golf today – a sector that has plateaued or is even declining.
The town’s goal is to have GMNGC continue without losing the gem of a course we have.
Like the town, our golf course needs a sustainable capital budget plan. We need to be taking care of things and right now that means more up front cost.
What do you think are the most important facts for residents to consider before casting their vote for or against the budget?
I think they should know that we looked at everything. It gave us a better perspective even if we’re not doing it all now. We are working together to try and do what’s best for the town without making the financing unbearable.
I think folks should also understand the major drivers leading to the tax rate increase: No. 1, we’re creating a sustainable capital budget. No. 2, we’re taking care of debt on the books. This requires cash, even though the bills are paid. The debts we have from Irene have made us a cash-poor town and it has forced us to borrow to get by. We need to build back up to what the auditor recommends: three months of operating expenses in a reserve fund.
We got through Irene because our capital budget was strong, but we’ve depleted it.
Additionally, we used up funds in past budgets that should have been saved to lower tax rate to get through the recession. That backed things up, too.
I personally don’t think we upped it fast enough – more should have been done earlier, but we were being sensitive about the tax rate. A tax rate increase will be challenging, but in the long run it will be effective and cost us less not having to borrow.
I think people in town understand the need for this now more than ever. When they drive some of the roads in town they’re like, “Oh my goodness!” and they see how important it is to have funding. Chet always says, “People never understood the budget for culverts until Irene came through.”
Do you think there is anything frequently misunderstood by the public regarding town finances?
I think it’s easy to forget what we do have. With the FEMA reimbursements of the work we did after Tropical Storm Irene, we’re above the 70 percent threshold for repayments, which is about average. Of course, we’d have liked to be on the high end at of the reimbursement scale, closer to 85 percent.
When disasters hit, it’s a huge advantage to have funds on hand so you can get started right away.
If we choose not to fund our capital needs, we will have much more borrowing in our future.
Personally, I’d like to see us return to the ‘90s when we did not need to take loans for vehicles, etc. If we plan ahead we really can save money by budgeting properly for our future. The capital fund will help plan for repaving, for example, so we will not have to take out a bond to repave Killington Road. Such projects will also be well-timed – we’ll time bonds.  We are aiming for a stable tax rate. For example the Public Service Building bond will not start until others retire, so there will be no added cost to taxpayers.
And we need a new public service building, that just a fact. The current one is in violation of state codes and cannot be reasonably renovated to comply with them. No one wants to spend money. But this is something we desperately need.
One of the options for voters will be to reimplement the 1 percent option tax to help pay bonds to fund future infrastructure development. Do you think this is a good option?
I was on the fence when the sales portion of the option tax was rescinded in 2017, but since then the KPAA and resort have really stepped up and have followed through on their promises. Now I don’t believe the best thing would be to put it back in place. The resort and KPAA have lived up to their promises.
We still get about $400,000 from the rooms, meals, alcohol option taxes, which significantly helps the general fund and lowers our tax rate by about 5-6 cents, right there.
The resort has told us that rescinding the sales portion of the option tax was helpful to them to invest more in their own infrastructure and that is good for everyone.
If the town does vote to put this option tax back in, we’ve been very clear that it will be for very specific bonds and limited to the length of those bonds. We need to figure out how to pay for our own capital fund on our own and allow the resort to develop.
Anything else?
The economy in Killington is based on the ski area and the visitors it attracts. Beautification is important to tourism. If we want customers to return, they expect us to keep things updated. They want to know that we care.
Also, the resort is one of the largest tax payers with or without the sales option tax.

Killington eyes tax hike

Mountain Times
January 9, 2019

By Polly Mikula
Killington has significant debt. Town Manager Chet Hagenbarth said the town has accumulated about $2.2 million worth of debt. Hagenbarth also projects about $14 million of future expenses, including the construction of a new $4 million public safety building, about $1.2 million in golf course upgrades, $3 million in recreation expenses and $7 million in road work. All are “things that we are going to have to address,” he said.
In order to cover both past debts and property budget for future projects, the town is looking at ways to increase tax revenues by either increasing the municipal property tax rate or bringing back the 1 percent option tax on sales, or both.
Hagenbarth and all three Select Board members (Patty McGrath, Stephen Finneron and Jim Haff) have each said that they want to put the town on a sustainable path moving forward, to stop “kicking the can down the road.” They are currently debating what plan to put in front of voters in March for Town Meeting Day.
Hagenbarth has presented options for borrowing money and the projected tax implications for the next 10 years under different loan scenarios.
“Should we go borrow the money now while the money is cheap?” Hagenbarth asked.
Board member Jim Haff thinks we should.

Q&A with Jim Haff

(Editor’s note: These answers are from Jim Haff only, and do not reflect the opinion of the entire Select Board. Look for more information and interviews with Select Board members in future editions.)

Mountain Times: How did the town get into this debt situation?

Jim Haff: In 2011 there was a storm that passed through called Irene. The town did over $3 million in work. We were promised a large amount to be reimbursed from the Federal government (a.k.a. FEMA) and the state, but we did not get everything that we anticipated. This has left us with around $600,000 of funds that have been carried on our books – funds that we had hoped to receive from FEMA. We have now realized that we are not going to receive this money.

On top of this, while we were arguing our point by appealing our case, FEMA has come to the town and has requested $259,000 to be returned.

So Irene accounts for almost $1 million worth of the debt.

We as a town were fortunate enough to have the funds on hand at the time to cover these expenses. Most other towns, back in 2012, had to borrow money at that point.

Additionally, the golf course has around $300,000 worth of funds that were lent from the general fund in 2015-2017 for shortfalls in operations. And the golf course also has a balloon payment of $1.4 million due in 2021, of which $217,500 is set aside in a restricted fund. This leaves us with $1.2 million for the golf course that the town will need to refinance.

So that’s the total $2.2 in debt that Chet refers to.

MT: What should be the funding priorities for the town?

JH: I believe that the $2.2 million in debt, fully funding our town roads, and having a sustainable capital plan for all our infrastructure so that we don’t have to borrow money for these needs, should be funded through the General Fund budget.

Additionally, I think the voters should vote on three separate articles for bond funding: $4 million for the proposed public safety building, $6-$7 million for improvements to Killington Road (lights, sidewalks on both sides and extending them to the resort and re-routing portions of the road), and $2 million for a future improved/replaced town hall and swimming pool project.

MT: Why should the town borrow money now?

JH: That’s a great question. If you go back over the past six or seven years of me running for the Select Board, I’ve been suggesting for a while now that the town does have a debt from FEMA, that the town does need to allocate additional expenses for the golf course, and that we’ve been underfunding capital needs required to keep our roads and infrastructure up to par. Some may say, why don’t we “pay as we go” but that would be a larger increase for the first few years.

Adding 1 cent to the municipal tax rate raises about $75,000. So, just to cover the $2.2 million in debt that we NEED to take care of now, the municipal tax rate would jump 30 cents per hundred!

So it makes sense to borrow these funds at today’s low interest rates, to smooth the payments out over the next 15 or 30 years, whichever way the board decides.

The second part is bringing our existing roads up to par. They are currently about $1 million behind. If we did the “pay as we go” it would add another 13.3 cents to the tax rate.

The other items that will be separate articles for the townspeople to decide, such as the public safety building, if passed, I would hope that no one would think that we could afford to pay for that all at once. For giggles, if we were to fund the $4 million public safety building in one year, it would add 53.3 cents to our tax rate. And if voters passed the recreation pool/town hall for another $2 million it would add another 26.6 cents to our tax rate. In total that would be 1.23 cents to the tax rate or a $3,690 increase on a $300,000 house – if we went the “pay as you go” route. That’s just plain crazy. And this is why I’ve suggested in the past, and now am glad to see our town manager is advising, that we borrow money now and finance such expenses over time.

By borrowing the money at the low rates today, owners of a $300,000 house would see about a $480 increase to their tax rate per year.

MT: You were a big proponent of getting rid of the sales portion of the option tax a few years ago. Do you believe the town should reimplement the 1 percent option tax on sales now?

JH: I personally do not, as a business owner. If I was not a business owner, I still would not want to bring the sales option tax back. I believe that we should act as a community and understand that all these items are necessities. And I’ve always believed in fair taxation across the board. I believe that when one takes into consideration the 7 cents projected to be raised by reimplementing the sales option tax, it would actually end up costing more for most people in town than simply raising the municipal tax 7 cents to cover these items. This needs to be the discussion in town.

However, I also believe that if the Select Board does not put this on the ballot there will be a petition that will require us to put it up for a vote. Instead of trying to avoid the inevitable, we might as well put the question of reinstating the sales option tax on the ballot and then work to educate voters about what it will mean for them.

One good argument against bringing back the sales option tax to pay for this is the same argument that was used last year to remove the sales option portion: that a typical household pays more in sales tax throughout the year than they would in property tax. But one must take into consideration the Grand List value of their house multiplied by the 7 cents. For example: A $300,000 house divided by 100 for the Grand List tax rate, multiplied by 7 cents, equals a $210 increase in the residential tax rate. For this homeowner, would $210 be more or less than what they’d pay in sales option tax? Only they will know.

In my situation, and I understand it’s just me, to be honest with you, it would be cheaper for me to pay the 7 cents straightforward in the municipal tax rate. I understand that this may not be the case for everyone and it may be the difference for others to vote to bring the tax back. That being said, if we are truly are a community and we are looking out for our whole town, we must also consider what the tax implications will be. One must understand that some investments for businesses (and I’m saying all businesses) may be dialed back because of bringing back the 1 percent sales option tax.

MT: Would reimplementing the sales option tax negatively impact town-resort relations? Would it cause a disincentive for growth and development plans (specifically strapping the Killington Village development and the proposed Bear Mountain development with additional costs should those projects get off the ground?)

JH: When we removed the sales option tax, the resort promised to take over $250,000 in costs per year from the town (mostly in events and activities the town helped to fund). If that tax is now coming back, then it would release them from that $250,000 commitment. The resort has invested some $25 million in their business this past year. One would have to believe that when they make an investment into their property, they take into consideration all costs, including taxes. If half of that $25 million was cost of goods, it would have cost them an additional $125,000 if assessed the 1 percent sales option tax. I don’t think that’s fair. The resort would need to look at their obligations differently.

I hope that regardless of the vote, it wouldn’t negatively impact the town-resort relationship, but I understand that it could affect their business decisions and slow growth.

MT: If the sales option tax is voted to be reimplemented, are there other strategies you’d support to help foster development and/or alleviate cost to developers?

JH: First, we are not talking about using the option tax to pay for the first two items in the budget (paying our debt and for our roads and a sustainable plan for capital funding).

The discussion of the option tax really falls on NEW development such as the public safety building, reconstruction of Killington Road and town hall/recreation plans. The board has stated that if this tax is to be reinstated it would sunset upon those bonds being paid down.

At the moment, I personally am requesting that we look at IF the sales option tax brings in more than the anticipated 7 cents per hundred that we would use the additional funds for certain projects involving the resort/land company projects within the town property limits, such as maybe taking over the Killington Road from Glazebrook to East Mountain Road, which is currently owned and maintained by the resort, and also the same with Bear Mountain Road.

The last item I would like to see is working with the land company to finally bring a municipal water system to our town.

I’m not sure, but to me, if this tax is implemented, which I hope it is not, I believe this could be a discussion to help offset some of the biggest increases to these partners in our town.

Photo submitted

Jim Haff