QUESTIONS and ANSWERS
How much is the proposed budget for fiscal year (FY) 2024 and how does it compare to the current fiscal year’s budget?
The proposed FY24 general fund budget is $15,401,152, a decrease of $1,274,089 or 7.6 percent from FY23.
If this budget is approved by voters at Town Meeting, what impact will it have on the municipal tax rate and the amount an average property owner pays?
The proposed FY24 budget would increase the municipal tax rate by an estimated 22 percent, or $340 on the average home in Essex, which is assessed at $280,000. The resulting municipal tax rate would be $0.6728 (per $100 of assessed value). On a home assessed at $280,000 that equates to a municipal tax bill of $1,884.
Assessed value can be found by looking at your current tax bill. Assessed value is not the same as market value.
These projections are based on a 1 percent growth in the grand list. Should grand list growth exceed this projection, the tax rate set in the summer would be adjusted downward accordingly.
Why is the budget decreasing, but the tax rate increasing?
This is due to the separation of the Village of Essex Junction from the Town of Essex. When the Village separated, the Town lost approximately 41 percent of its tax base. The proposed FY24 budget contains the funding necessary to maintain municipal service levels following the separation of Essex Junction. So although the total budget is decreasing, a smaller tax base means taxes will need to increase to raise enough revenue to fund the budget and maintain services.
What are the main cost drivers in the FY24 budget?
In addition to the loss of 41 percent of the Town’s tax base, two other factors have a significant impact on budget costs: health insurance premiums increased approximately 20 percent; and high inflation touched everything from general supplies to gasoline to contractual raises for staff.
What is happening in the FY24 budget to limit expenses?
The separation of Essex Junction has been mitigated to some extent through shared service agreements put in place by the Selectboard and the Essex Junction Board of Trustees/City Council. The Town’s Police Department, including dispatch and the Community Justice Center, will continue to serve the City of Essex Junction. The costs are being allocated on a per capita basis. Assessing services will also be shared with Essex Junction, with costs allocated on a per parcel basis. Senior Services will be shared with Essex Junction on a per capita basis for half of FY24, through December 31, 2023.
Police Department spending has often come in below budget, primarily due to staffing shortages. For the past few years, the Police Department has been funded at less than 100 percent to account for the under-spending. In FY24, the Police budget is proposed to be funded at 90 percent, a better approximation of historical spending.
Overtime, particularly in Public Works Highway and the Clerk’s Office, has been reduced to better reflect historical spending.
The Fire Department remains a volunteer, paid on-call department. Pay rates are proposed to increase for the first time in 5 years, from $15.50/hour to $17/hour; firefighters would again be paid for training to incentivize attendance (pay for training was eliminated several years ago in an effort to align with the Essex Junction Fire Department); and admin hours would increase for officers to better reflect work expectations for the volunteer department. Despite the proposed pay increases, salary lines were adjusted based on actual and expected attendance to calls and training, resulting in a net decrease in the budgeted salaries line for Fire.
Capital transfers out of the operating budget were level-funded from FY23.
Regional expenses such as Green Mountain Transit, the county tax, Chittenden County Regional Planning Commission, and Vermont League of Cities and Towns dues are decreasing in accordance with a smaller population and/or grand list.
The Conservation Reserve Fund contribution was reduced to account for the smaller tax base and budget constraints.
Human services funding, which makes up 1 percent of the budget, will decrease with a smaller budget.
What staffing changes are proposed in the FY24 budget?
- The Clerk’s Office, which is shared with Essex Junction in FY23 and has three full-time employees, will shrink to two full-time employees in FY24 and will solely serve the Town of Essex.
- Essex Free Library is proposed to have an additional 5 hours of staffing. Two existing staff (one part-time, one at 30 hours/week) were budgeted with five additional hours each, with those hours being reassigned from substitute librarians. Giving additional hours to existing staff is expected to help with coverage and reduce reliance on substitute librarians, which can be hard to schedule on short notice. Some substitute hours remain to help when regular staff are on vacation or out sick.
- Public Works has a highway position funded at 0.7 of a full-time equivalent (FTE) staff person in the FY23 budget. For FY24, that position is proposed to increase to 1.0 FTE. Doing so will allow for a deeper team in Public Works, which is important year-round and particularly so in the winter for plowing services – all the more so at a time when covid is still prevalent, the job market has created turnover amongst municipal highway departments, and upcoming retirements will result in the loss of institutional knowledge.
- Parks Maintenance and Senior Services hours are proposed to shift. Currently, the Parks Maintenance Department is budgeted for 2.5 FTEs. One of the FTEs provides support to the senior van by driving as needed. Proposed in the budget is to make one Parks Maintenance FTE 50/50 with Senior Services, reducing the number of budgeted hours for part-time van drivers; and increasing the 0.5 FTE Parks position to 1 FTE. The net result is that Parks will continue to have 2.5 FTEs and the Senior Van will have more reliable drivers with fewer budgeted hours.
- Allocations of salaries to relevant enterprise accounts such as water and sewer were updated.
Will any sharing of services with Essex Junction come to an end in FY24?
Yes, as of July 1, 2023, Information Technology and the Clerk’s Office will no longer be shared between the Town of Essex and the City of Essex Junction.
What Capital Budget items are being proposed in FY24?
The proposed FY24 capital plan calls for capital tax additions of $322,000, spending of $1,368,170, and an ending balance of $2,590,755. Capital projects proposed for FY24 include the following: buildings improvements; various road improvements; highway vehicles, fire vehicles, and other heavy equipment; replacement of park assets; ADA compliance upgrades on sidewalks; stormwater projects; replacement of Information Technology systems; and maintenance and replacement of street trees.
The operating budget includes transfers to the Capital budget in the amount of $470,000. More details about specific projects and the transfers are available online at https://www.essexvt.org/761/Budget.
How much is fund balance and is there any available for reducing taxes?
The Town’s policy is to maintain an unassigned fund balance of 15 percent of the operating budget, which equates to approximately eight weeks of operating expenses. The Government Finance Officers Association recommends keeping at least two months of operating expenses in unassigned fund balance so that municipalities can operate during a natural disaster, an emergency, or some other type of unexpected event.
The Town has an unassigned fund balance of $2,501,286, or 15 percent of the current operating budget. The Selectboard has approved the use of $615,700 in fund balance in the FY24 budget.
Budget Process and Schedule