City of South Burlington City Council Adopted January 12, 2013 FY 2014 Budget - Keys to Financial Success Prepared by Sandy Miller, City Manager and Bob Rusten, Deputy City Manager

Issues Facing the General Fund in FY 2014 Revenue Reduced from FY 2013 to FY 2014: Market Street Grant$ 14,690 Fire Impact Fees$ 86,000 Ambulance Fees$146,000 Road Opening Fees$ 22,600 Class Two Paving Grant$134,520 Total Reduction in Revenue$403,810

Issues Facing the General Fund in FY 2014 (continued) Increased Spending from FY 2013 to FY 2014: Interim Zoning$95,320 Health Insurance$176,300 Pension$224,245 Health Sick Bank$ 31,250 Fire Truck$100,000 Police Department Vehicles$ 38,500 PACIF$179,502 Total Increased Spending $845,117

Issues Facing the General Fund in FY 2014 (continued) Total Reduction in Revenue $403,810 Total Increased Spending $845,117 Grand Total $1,248,927

Key Elements of FY 2014 Budgets General Fund expenditures are $21,569,305, an increase of $2,598,645, or 13.7%. General Fund non-property tax revenues to increase by $1,933,409, or 24.91%. Property tax rate estimated to be $0.4235, an increase (1.99 cents), or 4.93%. Special Funds budget expenditure is $719,789, a $70,495 decrease from FY 2013.

Increases In FY 2014 General Fund Non-Property Tax Revenue The City continues to increase ways to raise money other than through property taxes: $ 10,000 – Building and Sign Permits. $ 29,000 – Recreation Program Fees. $125,000 – Local Option Tax. $ 75,000 – Police Impact Fees. $ 47,000 – Hinesburg Road Grant. $ 27,197 – Reparative Board Grant. _________ $313,197 - Total

FY’14 Water 1.In FY'14 our resident’s water rates are the 4 th lowest of the 15 member communities served by Champlain Water District. 2.The rate increases are due to higher operating costs to manage the water system. 3.We are beginning a 7-year water meter replacement program in FY’14 and do so within the confines of this department’s historical spending levels. 10

FY’14 Stormwater 1.The FY’14 budget initiates the budget process for future MS4 permit expenses expected to cost SB over $40 million dollars. The new permit was recently passed into law in Vermont by ANR. 2.To comply with the permit, the City must develop Flow Restoration Plans (FRPs). The FY’14 budget includes a one-time expense of $256k for this work. The FRPs will identify projects required to meet the TMDL targets, establish a schedule, and create a budget so that all work is completed by 2033, as required by MS4. 3.We analyzed the ERU rate for the duration of MS4’s 20- year compliance schedule and propose to gradually raise the money needed to implement the FRPs. The next 10 years we project an annual 2.5% ERU increase. 11

FY’14 Sewer 1.FY’14 and future rate increases (projected to be 2% annually) result in necessary cash reserves to help pay for projected ~2022 upgrades/improvements to the Bartlett Bay Sewer Treatment Plant. 2.The FY’14 budget includes the first of 20 annual repayments ($1.27M) to the State Revolving Loan Fund for the recently completed Airport Parkway Sewer Treatment Plant project. This will be partially offset annually by Colchester’s contributing payment to us of $742k. 3.An increase of $109,532 of the annual charge to SB for our discharges to BTV’s sewer system (Proctor-Hadley neighborhood). Given this increase, we included $15k in the FY’14 budget to scope the feasibility and cost of an expansion of our sewer system to serve and treat the sewage from this area. 12

Key Elements Of FY 2014 Budgets The Water Fund budget is $2,454,815, an increase of $84,507. Water user fees are proposed to increase 3.9%. The Sewer budget is $4,180,822. This is a increase of $1,511,851 or 56.65% from the current year’s budget. A rate increase of 2.0% is proposed. The Stormwater Fund budget is $1,933,146, a decrease of $1,688,710 or 46.63%. To meet MS4 requirements, a rate increase of 2.5% is proposed for FY 2014.

Estimated City Taxes and Utilities Based on Fiscal Year 2014 Budgets City Tax rate estimated as 1.99 cent increase, from $ to $ For condo at $224,000 is an increase of $44.58 annually. For primary residence at $323,000 is a $64.28 annual increase. Each $100,000 in assessed valuation yields a $19.90 increase. For Average Home Owner: Water rate proposed increase = $9.20 annually. Stormwater proposed increase = $1.80 annually. Wastewater proposed increase = $7.26 annually. Total Estimated City Tax and Utility Increase Condo, $224,000 = $62.84 annually, $5.24 monthly. Single Family Detached, $323,000 = $82.54, $6.88 monthly.

Goals, Objectives & Other Considerations for FY 2014 Budget designed to achieve the following:  Council Established Priorities  Tax Incremental Financing & City Center  Interim Zoning  “Path to Sustainability”  Workers’ Compensation improved rating  Facilities Issues identified  Intergovernmental and Interagency Cooperation and Collaboration