The Fiscal Year 2024 Budget comes at a time of transition for the Town of Essex, and will be the first budget that does not include the Village of Essex Junction, which made up 41 percent of the total tax base (the City of Essex Junction will continue to contract with the Town for some services). Although the tax levy will decrease in FY24, the smaller tax base means the Town will face a much higher than normal tax rate increase if it is to maintain services. With that in mind, department heads were asked to provide lean, efficient budgets that would allow the Town to maintain operations in the coming year, and to create a stable position from which the Town can build in the future.
The overall budget proposal is $15,401,152. Of that, $10,837,562 would be raised by the tax levy. Conservatively estimating grand list growth at 1 percent, the tax levy would result in a municipal tax rate increase of 22 percent, or an increase of $340 on the average home. (Please note that the school district budget makes up approximately 75 percent of a tax bill.)
While the loss of the Essex Junction tax base is the largest driver of the budget and projected tax increase, two other factors are also having a significant impact on costs. The tax rate increase is due primarily to the three following factors:
- The separation of Essex Junction resulted in the loss of 41 percent of the Town’s grand list value; in other words, the Town lost 41 percent of its tax base
- Health insurance rates are increasing by approximately 20 percent
- Inflation has driven up many costs. In its union contracts, the Town refers to the Consumer Price Index for the Northeast Region (CPI-U Northeast), which has increased 7.2 percent from September 2021 to September 2022. In addition to health care, inflation has increased the costs of contractual raises for staff, general supplies, gasoline, heating costs, road salt, and more.
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.
View and download the full QUESTIONS and ANSWERS packet (pdf)
FY2024 General Fund Budget Documents
PROPOSED FY24 General Fund Budget (pdf)
MEMO - General Fund Budget Updates - January 3, 2023 (pdf)
MEMO - General Fund Budget Updates - December 19, 2022 (pdf)
MEMO - General Fund Budget Updates - December 5, 2022 (pdf)
MEMO - General Fund Budget Updates - November 21, 2022 (pdf)
FY24 Town General Fund Budget presentation - October 17, 2022 (pdf)
FY2024 Capital Budget & Five-Year Plan Documents
PROPOSED FY24 Capital Plan Details (pdf)
PROPOSED FY25-FY28 Capital Plan (pdf)
MEMO - Capital Budget Updates - January 3, 2023 (pdf)
FY24 Town Capital Budget & Five Year Plan presentation - December 19, 2022 (pdf)
Budget Process and Schedule
The meeting schedule below is subject to change.
Visit the Town Meeting Information page.
Visit the Finance Department's page.
Return to Administration's main page.