Local News
January 16, 2019

Finneron and McGrath weigh in on Killington budget

By Polly Mikula

Towns across the state are putting final touches on their budgets and articles in preparation for the Town Meeting Day vote, March 5.

In Killington, the town is bracing for what is likely going to be a fairly significant municipal tax rate increase, due to retiring past debts (left over from Tropical Storm Irene and Green Mountain Natonal Golf Course, which the town owns) as well as building a sustainable capital fund, which all three members of the current Select Board support.

Last week board member Jim Haff spoke with the Mountain Times. This week we’ll hear from Select Board Chair Steve Finneron and member Patty McGrath.

The Select Board is scheduled to meet Tuesday, Jan. 15, to determine what will be included in the general fund budget and what will be included on the ballot as separate articles to be voted upon on Town Meeting Day. These interviews were done and the Mountain Times went to press prior to that meeting. Visit mountaintimes.info for breaking news.

All viewpoints herein  reflect those of the individual, not necessarily the board as a whole.

Q&A with Steve Finneron

What do you think are the most important facts for residents to consider before casting their vote for or against the budget?

That we have over $1 million in debt that’s been carried on our books for eight years. It’s there. It needs to be addressed.

We’ve put a lot of work into accessing the past, current and future expenses and started this process by looking at them all. Since then, we’ve stepped those plans down to only the things that we feel are very important to address right now – namely the past debts we’ve been carrying, properly funding the town’s current infrastructure and creating a sustainable budget to continue to do so, and building a public safety building to meet current and future needs.

One of the items we are no longer planning to finance at this point in time is the $7 million bond proposal to do Killington Road. [The proposal included sidewalks and lights on both sides of the road, extending it to the resort, redoing the road, and rerouting portions.] That item will not be on the ballot this Town Meeting Day. After starting out with everything, we dropped that one. It was one of the biggest ticket items and something that we still hope to do, but not until after we get these other things working.

I also think that voters should remember that we have no plans to start the public safety building until after other bonds retire, so it will not have an effect on the tax rate.

There’s no fluff in this budget.

We need to get away from taking bridge loans regularly, they just add to the town’s debt. It’s not a sustainable way to budget. And we need to build up our reserve funds again. The state recommends having enough for three months of town operating costs.

We’re taking a longer view approach. This budget is not for just next year. It’s a sustainable budget that properly addresses capital funding for the town’s infrastructure. As it gets implemented, it will save us money down the road. Some of these things need to be done on the front end. It’s not easy. We [being the town] have created this situation. It wasn’t one individual or small group, it’s just been an accumulation over time. This Select Board wants to take care of the town’s needs.

Do you think there is anything frequently misunderstood by the public regarding town finances?

People who ask questions get answers and they’re informed. They may not necessarily like the answer they get, but they get answers. Unfortunately, a lot of people are going to vote who didn’t bother to get answers to their questions. A lot of people don’t know where the money is going. A lot just see the tax rate.

[Town Manager] Chet Hagenbarth has a breakdown of the tax rate by category so you can see exactly what the money is going toward and what makes up the total rate. It helps answer a lot of questions. Some expenses are there whatever you do. That’s what you start with.

I encourage every voter to look into where the tax money is going. It’s not going in anyone’s pocket. I firmly believe that if we can explain what the money is for, voters will be more likely to support it. Really, they are all necessary expenses.

If you want to see a no-frills operation, walk into the town garage! You better have your boots on! And we’re looking to do that sort of thing, elsewhere: Functional and lasting, that’s what we’re after. For example, with the public safety building, we’re looking at materials that will last 60-80 years – this cannot be your traditional wooden structure. We’re not building the future into it now but when the future shows up we’ll be able to easily add on without difficulty or unnecessary costs then.

Also, when something comes up, we’re going to address it. In fact, we’re already doing this with new guard rails up and down the Access Road. Early snow stopped this project early, but we plan to continue in the spring as snow allows.

A lot of folks also don’t understand that we’re literally a couple million dollars behind the 8 ball when it comes to capital funding. When Act 60 was implemented [June 1997], the town started cutting its capital investments in order to offset the large tax rate increase from the state. So this has been a problem that’s been building for years, and we have just been kicking the can down the road.

If the budget and/or articles are voted down, what will be the first things cut?

I don’t think I can say. There’s really no fluff in the budget. We’d have to have open meetings with the public to discuss it. We’ve done this successfully when we had the golf course situation, and with the town manager, and each of those times 30-40 people showed up and we got some good input.

We just hope sthis doesn’t have to happen. We’re available now to explain how we got to where we are and we hope we can answer questions in advance of the vote. We want to put the town in a better place financially and physically.

With regard to paying off the debt, we have to ask: How much money are you willing to spend in interest to pay off a debt that is eight years old? We are currently paying for this interest. Yes, you [the tax payer] are paying for it whether you realize it or not. By getting rid of that debt, it puts us in a better financial situation and on a sustainable path.

One of the options for voters will be to reimplement the 1 percent option tax to help pay bonds to fund future infrastructure development. Do you think this is a good option?

None of us on the Select Board are in favor of reimplementing the 1 percent option tax on sales. But, it’s our job to present different scenarios for different situations, to get public input, and to put the question out there. In the end, we’re only four votes. It’s the townspeople who get to decide.

Personally, I’m against the option tax because there’s an agreement between the town and resort, and the resort has held up their part of bargain. They’ve taken over a lot of the town’s cost and in the past year they’ve also put a massive infusion of money into the ski area. While that investment money doesn’t directly go to the town, it does a lot to make them more competitive with other resorts, and all of that gets more people here and into our restaurants, shops, hotel beds. Right now we’re working well with them and they’re doing a lot that benefits all of us.

Mike Solimano [president and GM of Killington and Pico] was at our last meeting and he said that he’s not against paying their fair share of the tax rate. But the situation we’re in wasn’t brought on by resort, it’s not their fault, and I just think that the town needs to rectify this on its own.

Anything else?

We’re still appealing the $296,000 that FEMA is now requesting that we pay back from [Tropical Storm] Irene. But we’re no longer planning to get it. That debt is included in the total debt we’re planning to pay off. If we do end up getting to keep those funds, they will go into the general fund.
Also, when building the budget, Chet is projecting that the Grand List will only grow 1 percent per year – that’s essentially a flat Grand List, based on historicals. That doesn’t account for any of the new developments planned or listing values increasing – either or both of which could easily happen in the next few years. Any change to that will increase the town’s Grand List and would help lower the tax rate. But Chet has chosen, wisely, to budget on the current conditions, not any assumed future.

Q&A with Patty McGrath

Brown Golf Management presented future proposals for Green Mountain National Golf Course to the Select Board Friday, Jan. 11, via video conference call. Did any surprises come up in their budgets or future capital plans?

No, there were no real surprises. Justin [Stezin] of Brown Golf presented three options for the GMNGC budget and the Select Board chose to mix and match of the options presented.

The goal is for GMNGC to be self-sustaining operationally and eventually capital-wise, too.

Brown Golf has experience and a pulse on the economy as it pertains to golf. In that way, they are better informed to make a plan that works for golf today – a sector that has plateaued or is even declining.

The town’s goal is to have GMNGC continue without losing the gem of a course we have.

Like the town, our golf course needs a sustainable capital budget plan. We need to be taking care of things and right now that means more up front cost.

What do you think are the most important facts for residents to consider before casting their vote for or against the budget?

I think they should know that we looked at everything. It gave us a better perspective even if we’re not doing it all now. We are working together to try and do what’s best for the town without making the financing unbearable.

I think folks should also understand the major drivers leading to the tax rate increase: No. 1, we’re creating a sustainable capital budget. No. 2, we’re taking care of debt on the books. This requires cash, even though the bills are paid. The debts we have from Irene have made us a cash-poor town and it has forced us to borrow to get by. We need to build back up to what the auditor recommends: three months of operating expenses in a reserve fund.

We got through Irene because our capital budget was strong, but we’ve depleted it.

Additionally, we used up funds in past budgets that should have been saved to lower tax rate to get through the recession. That backed things up, too.

I personally don’t think we upped it fast enough – more should have been done earlier, but we were being sensitive about the tax rate. A tax rate increase will be challenging, but in the long run it will be effective and cost us less not having to borrow.

I think people in town understand the need for this now more than ever. When they drive some of the roads in town they’re like, “Oh my goodness!” and they see how important it is to have funding. Chet always says, “People never understood the budget for culverts until Irene came through.”

Do you think there is anything frequently misunderstood by the public regarding town finances?

I think it’s easy to forget what we do have. With the FEMA reimbursements of the work we did after Tropical Storm Irene, we’re above the 70 percent threshold for repayments, which is about average. Of course, we’d have liked to be on the high end at of the reimbursement scale, closer to 85 percent.

When disasters hit, it’s a huge advantage to have funds on hand so you can get started right away.

If we choose not to fund our capital needs, we will have much more borrowing in our future.

Personally, I’d like to see us return to the ‘90s when we did not need to take loans for vehicles, etc. If we plan ahead we really can save money by budgeting properly for our future. The capital fund will help plan for repaving, for example, so we will not have to take out a bond to repave Killington Road. Such projects will also be well-timed – we’ll time bonds.  We are aiming for a stable tax rate. For example the Public Service Building bond will not start until others retire, so there will be no added cost to taxpayers.

And we need a new public service building, that just a fact. The current one is in violation of state codes and cannot be reasonably renovated to comply with them. No one wants to spend money. But this is something we desperately need.

One of the options for voters will be to reimplement the 1 percent option tax to help pay bonds to fund future infrastructure development. Do you think this is a good option?

I was on the fence when the sales portion of the option tax was rescinded in 2017, but since then the KPAA and resort have really stepped up and have followed through on their promises. Now I don’t believe the best thing would be to put it back in place. The resort and KPAA have lived up to their promises.

We still get about $400,000 from the rooms, meals, alcohol option taxes, which significantly helps the general fund and lowers our tax rate by about 5-6 cents, right there.

The resort has told us that rescinding the sales portion of the option tax was helpful to them to invest more in their own infrastructure and that is good for everyone.

If the town does vote to put this option tax back in, we’ve been very clear that it will be for very specific bonds and limited to the length of those bonds. We need to figure out how to pay for our own capital fund on our own and allow the resort to develop.

Anything else?

The economy in Killington is based on the ski area and the visitors it attracts. Beautification is important to tourism. If we want customers to return, they expect us to keep things updated. They want to know that we care.

Also, the resort is one of the largest tax payers with or without the sales option tax.

Leave a Reply

Your email address will not be published. Required fields are marked *