The days are getting cooler and shorter, and I hope you all have enjoyed the best of summer in Burlington. The City continues to do good work on a number of fronts, and I’m excited to share latest news.
Progress Stabilizing the City’s Retirement System
It has been clear since the mid-2000s that the Burlington Employee Retirement System (BERS) was facing serious challenges. Between 2003 and 2015, the City’s contribution to the retirement system rose from $1 million to $9 million even as the funding percentage – an important measure of the system’s health – fell from 116 percent to 69 percent. Such a trend not only increased the burden on the City’s taxpayers and ratepayers but also threatened the sustainability of a system on which many City employees depend.
Since we held a Pension Summit in late 2013 the Administration, the City Council, and our public employee unions have been working on a range of reforms intended to address this challenge, and we are now in position to announce tangible progress. We have completed important changes to the way in which the plan is administered, negotiated collective bargaining contracts with all four unions that have increased employee contributions to the system and financial risk-sharing in the years ahead, and changed the way in which we invest the system’s assets. The reforms are projected to save taxpayers and ratepayers a total of approximately $8 million over the pre-reform projections by 2020, and to save approximately $600,000 a year in annual investment expenses. Further, the solvency of the system has improved and should be more stable in upcoming years.
While this progress marks a significant milestone in our effort to reform the pension system and is already producing tangible benefits – these reforms were a major factor the slight municipal tax rate reduction Burlington taxpayers received for the second year in a row – sustaining the BERS system will be an ongoing challenge that will continue to require attention in the years ahead. If you are interested in learning more about the work we have done in this area please go to the Mayor’s press releases section of the City web site.
Settlement of Airport Property Tax Dispute with South Burlington
I am also pleased to report another substantial City financial success. On August 15th, the City Councils of both South Burlington and Burlington approved a settlement agreement that ended a dispute over property taxes paid by the Burlington International Airport property (which is owned by Burlington but is within the municipality of South Burlington).
The settlement agreement will save the airport over $800,000 annually. The dispute over the valuation of these properties began in 2012 after a significant tax rate increase and ultimately made its way to the Vermont Superior Court. In March 2016, the Court issued a decision that clarified how specific property tax statutes apply to various elements of the Airport property. The judgment and ensuing settlement reduced the airport’s annual combined property tax bill from $1.5 million to $717,000 for tax year 2015-16. These savings are good for the traveling public and good for the airport, which has faced serious financial challenges since the late 2000s. The savings means we are continuing to make financial progress without putting new expense pressures on air travelers or the airlines. We are optimistic about the possibility of another credit rating increase at the airport in the next year.
City Launches Pilot Project to Address Blue-Green Algae Blooms
At the end of August, the City and EcoSolutions, a Vermont-based engineering design/build firm specializing in the application of innovative ecological restoration technologies and use of low impact designs for stormwater and wastewater projects, deployed a two-part pilot project to explore the feasibility and of a new approach in mitigating the impact of excess phosphorus runoff to waterbodies such as Lake Champlain.
Lake Champlain has long been challenged by excess phosphorus finding its way into the water from fertilizer and soil erosion in stormwater runoff, wastewater discharge, and agricultural practices. Burlington has been a leader in the effort to dramatically reduce phosphorous runoff and is continuing to make major new investments in this effort, as are others. However, it is clear that it will be years before the watershed’s runoff problem is sufficiently addressed. Burlington is hopeful that the pilot project technology can play a role in mitigating the frequency of algae blooms in high use areas of the lake in the near term.
This pilot project has been funded with a generous investment from John Hoehl. Should the pilot demonstrate favorable results, the City will engage in a cost benefit analysis and conversation about an ongoing deployment of the program.
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 or at numerous other community events each month. To stay informed about City progress and happenings, please visit www.facebook.com/MiroBTV. I hope to see you soon.