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Voters face difficult spending decisions

BRATTLEBORO—After all the lofty descriptions of Annual Town Meeting (like “proud tradition”) are peeled away, the core remains.

It is, in the words of University of Vermont Professor Emeritus of Political Science Frank M. Bryan, a legislative session of the town’s lawmakers — in this case, its registered voters, who make legally binding decisions.

These decisions can include actions like approving a town’s funding or slashing departments, with consequences that can ripple into the services that a town can afford to provide its citizens, or even affect its municipal credit rating.

Sometimes, when it comes to Town Meeting, the big changes are buried in articles that on the surface seem to be about minutiae.

On night two of its three-day Annual Town Meeting, Vernon voters slashed its police department funding to $40,000. Voters instructed the Selectboard to close the town police department and contract with either the Vermont State Police or the Windham County Sheriff’s Department to provide the town law-enforcement services.

In his closing remarks at informational session in preparation for Brattleboro’s Annual Representative Town Meeting on Saturday, March 22, Selectboard Chair David Gartenstein told Town Meeting members worried about the cost of the police-fire facilities upgrade project that they could amend the motion to reduce the proposed $16.2 million budget by the amount of the bond interest and payment.

Meeting members could also reject the budget altogether if they wished, he said.

Outcomes of votes can have long-lasting consequences for a town and are sometimes made by very few. The nonbinding Brattleboro-wide vote approving a 1-percent local option sales tax passed by 36 votes, with 11 percent of registered voters casting ballots.

Similarly, the amendment to reduce the Vernon Police Department budget passed by a handful of votes.

With Brattleboro facing the tax question at Saturday’s Annual Representative Town Meeting and with Vernon residents petitioning for another Town Meeting to rescind the original vote, citizens are finding much at stake on the Town Meeting floor and an uncomfortable truth: The power to affect the bottom line and property taxes in deciding this minutiae can have profound, long-ranging, and even extreme unintended consequences.

Paying municipal bills

“A lot of people are concerned,” said Vernon resident and former Selectboard member Michael Ball about the vote that essentially defunded the town police department.

Vernon is used to having about 140 patrol hours a week, said Ball. The $40,000 that voters did approve will cover about 18 hours a week.

“There’s a lot of people feeling insecure,” he said.

Ball, an emergency medical technician, volunteers for the Vernon Fire Department. He said police serve an important role during medical emergencies. Officers help defuse situations, act as a second witness to evaluating a patient’s mental health, and provide protection for medical personnel.

Gartenstein said in a phone interview this week that he knows many Town Meeting members aren’t happy with the $14.1 million fire/police project approved at Annual Representative Town Meeting last year and are concerned at the project’s effect on the property-tax rate.

All three of the town’s emergency services facilities have health and safety issues like black mold and poor air quality. The buildings also need updating to match advances in technology or equipment.

For example, the doors of Central Fire Station on Elliot Street are too small for modern-day fire trucks, and its floor is not rated to hold the weight of modern engines. The Police Department at the Municipal Center shares a hallway with public areas of the building, which can pose safety risks for victims of crime. West Brattleboro Fire Station has uninvited visitors: snakes.

If Town Meeting members either cut the budget’s bottom line or reject the budget as a whole at the March 22 town meeting, Gartenstein said, he would take that as a sign that they no longer want the project, for which the town has taken out $5 million in municipal bonds so far.

The catch of amending the budget by the amount of the bond payments is that the town would still need to pay off the $5 million. The only recourse would be to take the money from elsewhere in the budget.

State statute is clear on the subject of municipal bonds: don’t default or there will be consequences, according to J. Paul Giuliani, the town’s bond council for the town of Brattleboro.

To date, no Vermont town has ever defaulted on a municipal bond, said Giuliani, and “I pray it never does.”

“Ugly,” said Giuliani about defaulting on a municipal bond. “I’m real — you don’t even want to think about how ugly.”

Giuliani said that according to state statute, Vermont towns are not protected by the federal bankruptcy laws.

The statute governing defaulting on municipal bonds has been in effect since 1787, said Giuliani. If a town defaults, the bondholder could sue the town; if the town then still does not repay the bond, then the bondholder would have the right to ask the sheriff to seize any private property to fulfill the debt.

“Anything and everything can be grabbed by the sheriff,” said Giuliani, adding that “anything” includes farms, private businesses, or private homes.

The town’s credit rating would also be mud for the next 15 to 20 years, he said; neighboring towns’ credit ratings could also take a hit.

Concerns about the proposed 8.5-cent property tax increase have focused on the police-fire project.

Gartenstein reminded the Town Meeting members during a March 12 information meeting that fiscal year 2015’s tax rate reflects two years’ worth of increase of roughly 4.5 cents each year. Last year, the town used $750,000 of its surplus funds to defray taxes and keep the tax increase minimal.

In fiscal year 2015, the proposed budget did not include these surplus funds, Gartenstein said. The higher budget — and its corresponding property-tax increase — also includes payments on the police-fire project and anticipated increase in the budget such as negotiated benefits and insurance, he said.

The whole region is feeling an economic squeeze.

Rep. Michael Hebert (R-Vernon) commented in a meeting with Windham County legislators and members of the Brattleboro Area Chamber of Commerce that as businesses have left the area, more of the property-tax burden has shifted to private homeowners.

Referring to the rippling financial concerns that Vernon is struggling with as Entergy prepares to close its Vermont Yankee nuclear reactor, “When that plant leaves, every town is going to be a Vernon,” Hebert said.

This sentiment has led to the question: Are large municipal projects like Brattleboro’s police-fire facilities upgrade project a cause of tax burden? And is the tax burden on residential property owners of paying for a large municipal project the temporary symptom of an unhealthy economy.

Also up for discussion at the Brattleboro Representative Town Meeting will be whether to approve enacting a 1-percent local-option sales tax.

In addition to the statewide sales tax, Vermont allows towns to levy three optional taxes: rooms and meals, alcohol, and the local-option tax. Brattleboro already collects the rooms-and-meals and alcohol taxes.

The new sales tax could provide about $660,000 to help defray the effect of the police/fire project on property taxes.

Meanwhile, many downtown merchants worry that adding another sales tax would hurt business and push more shoppers across the Connecticut River to sales-tax-free New Hampshire.

Town Meeting budget procedure: a matter of interpretation

How voters approve budgets at town meeting is also up for interpretation. Some towns, like Brattleboro, allow voters to amend or approve the town budget’s bottom line. Other towns allow voters to amend budget line items.

According to Steven Jeffrey, executive director of the Vermont League of Cities and Towns, the procedure is governed by state statute: “a town shall vote such sums of money as it deems necessary for the interest of its inhabitants and for the prosecution and defense of the common rights.”

The VLCT interprets the plural use of “sums” as allowing voters to amend the budget line item by line item.

Town Attorney Robert Fisher, of Fisher and Fisher, said that Brattleboro interprets “sums” as pertaining only to the budget’s bottom line.

To add an additional wrinkle to the Vernon Police Department petition process, state statute requires that if a Town Meeting vote is being reconsidered, it must be reconsidered in the same context as the original vote.

For example, the amendment on the Vernon town budget that cut the police funding was made during consideration of the entire budget, Article 11: “Shall the voters authorize a total general fund expenditure for operating expenses of $2,112,785.00, of which $1564,210.00 shall be raised by taxes, $215,262.00 by non-tax revenues, and $333,313.00 by prior year surplus?”

Because of this legality, if a reconsideration of the vote takes place, even though the action is prompted by the desire to revisit the police vote, Vernon voters will also reconsider the school budget, which was also rejected.

This vote, however, would take place by Australian ballot, because that’s how the budget vote was originally conducted.

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Originally published in The Commons issue #246 (Wednesday, March 19, 2014). This story appeared on page A1.

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