Happy summer! I hope to see all of you at Waterfront Park on July 3 for our amazing Independence Day celebration.
Books & Baseball
And when the holiday excitement is over, please consider adding another book – Moneyball: The Art of Winning an Unfair Game by Michael Lewis – to your summer reading list and then joining us for the Mayor’s Book Group discussion at a Centennial Field event in early September (date TBD). Moneyball follows the low-budget Oakland Athletics and their general manager Billy Beane in the quest for baseball success through data analysis and disciplined decision-making. The group discussion will include baseball experts and an exploration of parallels to City data analysis and improvement efforts. FREE copies of Moneyball, provided by our Mayor’s Book Group partner, the UVM Humanities Center, are available now at the Fletcher Free Library.
Last month, the City Council unanimously passed the City Budget for fiscal year 2016, which began on July 1. I crafted a detailed budget memo and would like to share this condensed version with you. To read the full memo, please visit the press releases section of the Mayor’s Office web page.
The City of Burlington is a complex financial entity involving numerous enterprise funds, many revenue streams, and nearly $185 million (excluding the School District) in total expenditures.
Administration strives for an FY16 budget that is fair, factual, and forward
Fair: While the City’s General Fund budget gets the most attention because of its relationship to property taxes, the Administration and the City Council are responsible for numerous budgets and – while there is considerable overlap – there are different constituencies and users impacted by these different budgets and related taxes and fees. The Administration and the Council have a responsibility to treat all the different stakeholders accurately and fairly in their cost and revenue allocations between the General Fund and other budgets.
Factual: The Administration has attempted to be highly factual in its creation of the budget. In the General Fund alone, we have published a budget with over 3,600 line items, each showing the FY16 budget compared to prior year totals and current year actual spending.
Forward: The FY16 budget has benefited from our focus last year on dramatic improvements in the City’s budgeting practices. In fact, the FY15 budget has served as a bridge to this year’s budget. We have accomplished many of the goals we set for ourselves in last year’s budget.
The FY16 General Fund budget continues to make progress toward goal of increased financial stability and responsibility
The proposed FY16 General Fund budget includes $1 million to fund the City’s new unassigned fund balance policy. In the FY11 audited financial report, the City’s unassigned fund balance was negative $16.8 million, a figure that, according to the FY11 management letter, placed the City “at risk, as it is overly reliant on borrowing from financial institutions.” After several years of focus, the voter approval of the Fiscal Stability Bond, the repayment of large deficits by the Water and Sewer enterprise funds, and emphasis on securing reimbursement for Champlain Parkway expenditures, our audited FY14 unassigned fund balance improved to a positive $71.8 thousand, the City’s first positive unassigned fund balance since the Burlington Telecom (BT) deficits began in 2009. Now, with the FY16 budget before you, the City projects to increase that fund balance to over $1 million, which would represent solid progress towards the goal of our new Fund Balance Policy, which commits the City to increasing the balance to a minimum of five percent of the annual General Fund operating spending (approximately $3 million currently) by the end of FY19.
The FY16 budget includes modest revenue and expense growth
The proposed FY16 General Fund budget includes a revenue increase of 7.5 percent, which is 1.7 percent greater than the 5.8 percent growth in expenditures. Some of these increases are the result of shifts in how the City accounts for certain revenue and expense items, not true increases. Two examples of expenses now included in the FY16 budget that previously were not shown in the General Fund budget are:
- $625,000 for City streetlights
- $768,090 for part of the Community and Economic Development Office (CEDO)
Excluding the above two examples that collectively total $1.39 million, FY16 expenditures would increase by 3.6 percent (rather than 5.8 percent). For purposes of comparison, revenues would increase by an appropriate corresponding percentage.
The FY16 budget begins the process of implementing the City’s 10-Year Capital Plan
After a year of preparation, in April the Administration submitted to the City Council a Preliminary 10-Year Capital Plan. The FY16 budget funds the first year of that plan using a number of secured and anticipated one-time sources to increase capital investment by $2.3 million. This additional investment is focused on three areas:
- Enhanced sidewalk funding;
- $1 million for continuing the expansion and rebuilding of the bike path from the Urban Reserve to North Beach; and
- Substantial investments in City facilities, especially in critical deferred maintenance items identified in our recent independent study of City facilities.
The FY16 budget substantially increases funding to the Housing Trust Fund
For over 30 years, Burlington has identified housing affordability as one of its most significant challenges. And, over the past 30 years, the City, its residents, and a collection of dedicated affordable housing non-profits have worked together to meet this challenge and developed innovative ways to make Burlington affordable for thousands of low and moderate income households. My Administration has developed a draft Housing Action Plan to help reduce the cost of housing in Burlington for all residents, and one important proposal entails increasing the funding allocated to the Housing Trust Fund. The Housing Trust Fund provides valuable “seed” capital for necessary, but high-risk, pre-development work and capacity grants for affordable housing projects. The FY16 budget increases funding by $175,000, or nearly 100 percent, to the Housing Trust Fund. Such an increase was identified in the Housing Action Plan and has been called for by housing advocates for many years.
The FY16 budget includes funding for critical new services and studies
- Creation of new Burlington Fire Department paramedicine program
- Teen services librarian
- Additional youth librarian services
- Funding for new competitive arts grants pilot
- BTV Ignite
- Studies to address ongoing challenges
- A permit reform study
- A neighborhood stabilization project study
- An asset management study
The FY16 budget accomplishes these goals without increasing municipal taxes
The FY16 budget includes no increase in the total municipal tax rate. Unlike virtually every year during the past 15 years, the budget will not increase the retirement tax rate. The ability to hold steady on the retirement rate is the result of initial progress made in the effort to reform the pension system…, as well as growth in the Grand List for FY16. Additionally, we have been working with our four bargaining units in an effort to level fund the City’s contribution towards retirement for the next three years by creating a system where the employees share some of the risk if the system does not remain stable through both increased contributions and modifications to some benefits.
Conclusion: the FY16 budget represents further important steps toward greater municipal financial health and improved operations
In sum, I believe the budget now before the Council is very much in line with the significant progress we have made together over the last three years.
As always, I invite you to join me and share your ideas and concerns about the City at the Bagel Café on Wednesday mornings from 8:00-9:00 am. To stay informed about City progress, visit www.Facebook.com/MiroBTV. I hope to see you soon.