Loading...
HomeMy WebLinkAboutMinutes - City Council - 10/06/2006CITY COUNCIL 6 OCTOBER 2006 The South Burlington City Council held a special meeting on Friday, 6 October 2006, at 5:00 p.m., in the Conference Room, City Hall, 575 Dorset St. Members Present: C. Smith, Acting Chair; M. Boucher, D. O'Rourke, S. Magowan Also Present: D. Gravelin, Assistant City Manager; D. Young, P. Richards, R. Cassidy, C. Caldwell-Edmunds, School District; D. Kinville, City Clerk; Rep. A. Audette, Rep. A. Pugh, Rep. M. Kupersmith; Rep. H. Head; B. Cimonetti, D. Klepinger, City Charter Committee; B. Sevens, D. Bugbee, M. O'Brien, E. & A. Beaudoin, G. Lareau, T. Morin, J. & B. Smyle, F. Geier, L. Duell, P. & B. MacPherson, C. & E. Shen, P. Mayette, D. Sheil, B. & E. Bouvier, K. Buley, P. Sala, G. Bailey, M. & J. Zaetz, K. Murphy, A. & H. Yawney, C. Bardia, E. Fitzgerald, K. Gazy, B. Dealin, L. Bresee, S. Karsch, D. Bedard, A. Clift, K. F. Schepp, L. Levitt, J. Jenkins, J. Diamond, M. Brigham, S. Eckhardt, T. Shea, B. Simindinger, B. Walsh, R. Milliken 1. Public Hearing on Proposed City Charter Amendment to Require Vote Approval of City & School District Budgets; second reading of same: Mr. Smith reviewed the history of the amendment. A petition was received, signed by 15% of the voters. It asked for voter approval of both city and school budgets and stipulated that if there was no approval after 2 votes, the previous year's budget would be in force. The State ruled the petition invalid, since it did not provide the exact wording for a ballot item. The City Council was left with 2 choices: have the petition done over correctly or make the action a City Council amendment. There is now language for an amendment, and the Council has 3 options: approve the language as is and place the item on the ballot, amend the language and put the new language on the ballot, or reject the amendment. Mr. Magowan asked the Assistant City Manager to outline what the second Charter amendment proposes to do, so that those who leave after the first item will be aware of the other ballot item they will be asked to vote on. Mr. Gravelin explained that the second Charter Amendment would give the city the authority to impose local option sales and rooms & meals taxes. He noted that a 1% local sales tax could yield $3,000,000, and rooms/meals tax could yield $909,000. Of these figures, the State would keep 30%, which would leave the City $2,100,000 from the sales tax and $600,000 from the rooms/meals tax. The money from the sales tax would be used to reduce the city property tax by about 8.4%. There are 4 options for the rooms/meals tax: a) create a reserve fund for land purchases and capital expenses; b) spend the money in the year received; c) pay for city bonded indebtedness; d) reduce property taxes. Mr. Boucher noted there would still have to be voter approval to spend the money if a bond were involved. Mr. Magowan noted that people who are not city residents would pay 65% of these taxes. Mr. Smith added the both Williston and Burlington have local option sales taxes. His concern is that this will "mask" the real issues with regard to property taxes, which are State issues. Mr. Cimonetti then reported on the City Charter Committee's recent discussion of the proposed Charter amendments. He noted that of the 5 Committee members (Mr. Cimonetti, Dale Kleppinger, Mike Flaherty, Terry Sheahan, and Joan Britt), 4 have previously been City Council members and 2 have served in the State Legislature. The Charter Committee was asked to determine whether the amendments were workable from a technical point of view. He stressed that the City Council cannot change the Charter, and the voters can't change the Charter; if the voters approve the amendment, there must be a bill presented to the State Legislature to be passed by both houses and then signed by the Governor. They can approve the language of the ballot item or write their own language. Mr. Cimonetti said the Charter Committee has come up with an alternative proposal for the City Council to consider, in essence a compromise between the warned proposal and the existing Charter language. He felt it reflects the intention of the petition but does preserve the essence of the Charter. The compromise language requires a vote on both budgets by the voters and retains the "2 strikes and out" provision. But it also retains the Charter controls on budget growth and tax growth, suspending them for 2 years. The Committee felt that there will possibly be changes in education funding in the next 2 years, and they did not want the city to be in a position of having to change the Charter again. Mr. Cimonetti noted that any proposed Charter change would go into effect in the year following Legislature/Governor approval. Ms. Richards then reviewed school population figures for South Burlington and other Chittenden County communities and Rutland. She noted that South Burlington is one of 3 schools districts in the County that has had increased school enrollment from 1999 to 2007. Ms. Richards then reviewed local education spending from 1999-2007 (based on property tax). All schools show rising local education spending. South Burlington's increase is about 5.1% per year; Burlington is 5.0%. All other communities are higher than South Burlington. Based on school population, South Burlington spending increased 4.0%, the lowest of all the communities. During that time, the CPI increased 3.1%. Ms. Richards then looked at property taxes collected in South Burlington. In 1999, $19,580,000 was collected of which $1,000,000 went to the state "pool." In 2004, $31,000,000 was collected, of which $8,000,000, or 25%, went to the state "pool." In 2007, $32,900,000 is being collected of which $4,700,000 will go to the state "pool." Ms. Richards said she was stunned that Essex Junction and Essex Town are both "receiving" towns under the state system. This is because IBM is not viewed as part of the property tax formula due to negotiations with the state. The bottom line is that for every dollar of school tax collected in South Burlington, 16 cents goes to the state and only 84 cents stays in the city. Since 1999, $211,000,000 has been collected in school property taxes. $33,200,000 has gone to the state, leaving $177,900,000 left to fund South Burlington schools. Even if you subtract the $19,100,000 returned to South Burlington citizens in prebates/rebates under Acts 60 and 68, that still leaves $14,100,000 leaving South Burlington. Mr. O'Rourke noted that the $19,100,000 figure may not be accurate because sometimes people get prebates and then have to return some of that money at the end of the year because their income went up. He also noted that in "receiving" towns, qualified taxpayers still get rebate checks. Mr. Boucher then reviewed municipal spending during the same time period. He noted that spending growth between 1991 and 2005 was 2.8% in South Burlington, lower than all towns in the county except Shelburne, and equal to Williston. Mr. Boucher noted that in 1999, the average home in South Burlington was valued at $169,000. That home would have paid $871 in City property taxes and $2639 in School property taxes, plus $128 that went to the State under Act 60. In 2007, the average home in the city is valued at $325,000. The City tax on that home is $1277 (a 5.6% annual increase), the School tax is $3666 (a 4.8% annual increase), with $616 going to the state (a 25.1% annual increase). Mr. Boucher noted that if the 2006-7 budget had been voted on by the community and had been defeated twice, so that the previous year's budget would have prevailed, the average change to homeowners would have been a $100.75 decrease. Ms. Eckhardt asked what the average earnings of people in the City are and how much they pay for health insurance. Mr. Smith said that is the whole issue. Wages aren't going up as much as costs. Mr. Shea of the Chamber of Commerce, said he can find out the average earnings figures for the country. Ms. Caldwell-Edmunds said she has 2 children in city schools and serves on the School Board. She felt the schools have served her family well. She joined the Board because she wanted to leave things better than when she found them. She indicated that she supports the community vote but opposed the "two strikes and out" language. She suggested that instead of that provision, if the budget was voted down twice, the Charter limits would apply. Ms. Bailey said her family moved to South Burlington because of the schools. She was glad there hadn't been acrimony in previous years. She felt that none of the problems with property taxes in the City are the result of the Charter, and she did not feel the Charter should be changed. Mr. MacPherson said he served on the School Board in the 1980's. He felt the Charter operates to the benefit of the community as it restrained budget growth. Other towns don't have a built in "cap." He opposes the amendment. Ms. MacPherson said their 3 children began and completed their education in South Burlington. She, too, opposed the Charter change. She felt any change to the Charter should be done very thoughtfully and not in a hurry as this seems to be happening. Ms. Bugbee has 3 children in the schools. She opposes the amendment. She said she has attended School Board meetings and seen items removed from budgets because they would go over the Charter limits. She felt voting down budgets is not good for communities. She noted that budget building is an open process, and she felt the community should be proactive, not reactive. Ms. Laroe said she went around with petitions and people wanted a permanent change. She didn't feel the budget would always be voted down. Ms. Levitt has 2 children in the schools and indicated she has mixed feelings. She felt taxpayers have a right to vote. She is concerned with the "2 strikes and out" language as there are contracts that can't be changed, so cuts would be made in things like art and music and sports. She was also concerned that property values would go down if school quality decreased. She did not feel school spending is out of line and that the Charter has been effective in controlling spending. Ms. Jenkins has one child in school, and feels her child is getting a great education. She was concerned with the ballot item. She did not like to see taxes go up, but she didn't want to see a bad situation made worse. Her family chose South Burlington over Burlington and felt grateful when they saw Burlington school budgets fail. She felt that the problems are not the fault of the City Charter and that people should work together to strengthen programs, not weaken them. Mr. Diamond recently moved to the city because of the quality of the schools. He felt repeal of the Charter would be bad for the schools and it would not restore local control. He believed that property taxes a more a function of Act 60 and Act 68. He noted that for people with incomes below $80,000, approving the amendment would have no impact at all on their taxes. He was concerned with the impact of failed budgets on school programs. Mr. Geier, a realtor for 35 years and now a school bus driver, felt there needs to be more thought to a Charter change. He noted that a house valued at $50,000 when he first started as a realtor is now valued at $250,000. He observed that over the years people chose to live in South Burlington because of the good publicity the schools got. He felt the funding method for schools was good until Act 60 and Act 68 came along. He also noted that when Milton budgets failed, they deferred building maintenance issues, and now they are dealing with serious mold problems and may have to replace a school, which will cost them millions of dollars. Ms. Yawney said she supports the Charter change, not because of taxes, but because she felt people should have the right to vote on budgets. Mr. Zaetz said when he took petitions around; people were enthusiastic about it. He said they are not out to defeat budgets, but they want a say in the budgets. He felt the amendment should go to the voters as it was presented. Ms. Beuhle, a 27-year resident and city teachers applauded the opportunity to come together as a community and have a thoughtful dialogue. She noted that people who serve on the School Board and City Council are volunteers who give hundreds of hours of their time. She was saddened by discussions that become disrespectful of these people. Mr. Bresee felt the amendment was an honest attempt to address problems, but he opposed it because it doesn't address the problems. He also felt it would damage community relations. He wanted to see problems addressed in a thoughtful manner. Ms. Clift said she had mixed feelings. She has seen budgets kept in line because of Charter limits. She also noted that citizens can go to the School Board meetings and voice their opinions. She would like the community to come together and work this out. Mr. Bedard commended the City for going ahead and putting language together. Mr. Bouvier said he signed the petition and supports it without any change in language. He felt people are intelligent enough to vote on budgets. Mr. Walsh favored putting the item on the ballot. He felt there may be a possible compromise, maybe a 2-year suspension of the Charter then have it voted on. He didn't want to have to back to the Legislature again. Mr. Cassidy felt the City Council has the responsibility to do what they feel is best for the community and has the obligation to see whether this proposal is practical and workable for the community. He asked the Council to eliminate the "two strikes and out" provision as this is not a democratic process. Mr. Simindinger opposed the ballot item. He felt that since the petition was not legal it shouldn't be validated by the City Council. He preferred the alternative proposed by the City Charter Committee. He said that the city's children can't vote, and it is up to the City Council to protect them. Ms. Devlin said she had sent her children to parochial school. She noted the city is spending $11,000 on each child in South Burlington but her granddaughter's parents had to pay $98 for a textbook. Rep. Audette stressed that the City's representatives to the State Legislature are fighting for South Burlington. Mr. Magowan moved to close the public hearing. Mr. O'Rourke seconded. Motion passed unanimously. Mr. Smith noted that a second public hearing will be held on 16 October, 7 p.m. 2. Public Hearing on Proposed City Charter Amendment to Authorize Local Taxation of Sales, Rooms/Meals and Alcoholic Beverages; second reading of same: Mr. Milliken, representing many in the hospitality industry, noted that taxes are always a last resort. He noted that the hospitality industry pays a lot of property taxes. He also noted that the industry has used the local option taxes in surrounding communities as "an edge" in recent years. He said for most travelers, the added tax doesn't mean a thing, but for conventions, tour groups, weddings, and other social events, it has a significant impact. He said if this tax is imposed, he encouraged a reinvestment in the community. Mr. Smith thanked Mr. Milliken for the management of his hotel and for what the return to the community via the United Way. Rep. Audette asked that part of these taxes go to public transit. That is viewed very favorably in the Legislature. Mr. O'Rourke said the city's fundamental problem is Montpelier. If the city acts locally to relieve tax pressures, it will take the pressure off Montpelier. But he felt that the city can't do anything else. He felt that what they are seeing is a microcosm of what will happen statewide in a few years, and he urged the State Legislature to address this before he gets worse. Mr. Bresee felt many people in the community don't understand the nature of the problem. Mr. Magowan noted that when Act 60 came into being, some communities were given the option to have local option taxes. South Burlington was excluded from this. Ms. Kinville questioned the "spending in the same year" language. She said this can't be done as taxes are collected in June, the end of the fiscal year. Members agreed to review the language with the City's Attorney. Mr. Kleppinger said that if either or both items are put on the ballot, there should be a public education effort such as the information presented at this meeting. Mr. O'Rourke moved to close the public hearing. Mr. Magowan seconded. Motion passed unanimously. As there was no further business to come before the Council, the meeting was adjourned at 7:45 p.m. Clerk Published by ClerkBase ©2019 by Clerkbase. No Claim to Original Government Works.