City Investments Pay Off
by John Hollar
The Montpelier City Council has made many long-term investments in the city in recent years in the areas of street maintenance, economic development, downtown improvements, alternative transportation and housing. These investments are beginning to produce tangible results, but residents may not know that they are the result of specific programs that were created by the city council. I thought it would be useful to describe how these funds were created, how they are being spent and what the city is receiving in return.
Road and Sidewalk Improvements
Montpelier drivers know that our roads have needed significant attention for years, but they should also have noticed the major upgrades that have been made recently throughout the city.
The road and sidewalk improvements around town are the result of a commitment made by the city council in 2013 to reach a "steady state" in our capital spending. "Steady state" means the amount we need to spend each year to maintain high quality roads, sidewalks and bridges.
& a result of this commitment, infrastructure spending has been increasing by $166,000 per year, and the capital budget this year is $853,000 more than in FY14.
The recently-approved local option tax provides a portion of this funding. Voters approved a one percent tax increase on rooms, meals and alcohol in 2016, which is expected to raise about $200,000 annually. About half of that amount is dedicated for infrastructure improvements. The remainder of the funding has come from re-prioritizing city spending.
The other half of the annual revenue we receive from the local option tax (about $100,000) is earmarked for economic development, and those funds are already making a difference.
The city council authorized the creation of an economic development strategic plan in 2016 (available on the city's web site). Among the plan's recommendations were the creation of a local development corporation, which was also created last year. The board members of the Montpelier Development Corporation are some of the most talented and successful business and community leaders in Montpelier. The MDC's executive director is paid from local option tax revenue, and his position is exclusively devoted to promoting economic activity in Montpelier.
Although it is too early to see specific results from the MDC, the organization is making connections and I am confident that we will see projects develop as a result of the MDC's efforts.
Downtown Improvement District
In 2015, the council and voters approved the creation of the Downtown Improvement District and authorized an assessment on downtown real estate. The fund raises about $60,000 annually that is used for flowers, benches, holiday decorations· and marketing for our downtown. Montpelier Alive administers the fund, with expenditures approved by the city council.
This year, the DID paid for:
- Advertising and marketing ($31,000)
- Website improvements ($2,000)
- Downtown signage (still in development) ($5,000)
- Community arts grant ($5,000)
- Holiday decorations ($5,000)
- Downtown flowers, baskets and brackets ($11,000).
Montpelier has a bustling and vibrant downtown that is the envy of many communities. Two-hundred-years of good. Planning and decision making have made that happen, but the recent addition of the DID - along with the tremendous work of Montpelier Alive - have made our downtown a more attractive and lively place in recent years.
Alternative Transportation Fund
Since 2012, a council priority has been to make Montpelier a more bike-friendly .community. In 2015, the Alternative Transportation Fund was created to provide funds to pay for that goal. The council approved a significant increase in parking fees that year, and former councilor Jessica Edgerly Walsh proposed that five percent of the total fund be dedicated to alternative transportation, such as biking, walking and public transportation. That raises about $40,000 each year.
With proceeds from the fund, the city created Montpelier in Motion, which is now the city's bicycle and pedestrian master plan. The plan will serve as a guide for future city development to make bicycling and walking easier and more visible. It includes a wide range of plans that will improve walking and bicycling opportunities in the City. Many designated bike lane markings have already been made, and many more will follow as road paving occurs.
Housing Trust Fund
Montpelier faces a severe shortage of affordable housing, and the council has many initiatives underway to address this problem. One of them is the housing trust fund, which was created in 2005 to set aside annual funds to promote housing initiatives. The city allocated $60,000 to the housing trust fund in FY18.
Last year, the city approved spending $175,000 from the fund to support the creation of 18 affordable housing units in the French Block (above Aubuchon's Hardware) by Downstreet Housing and Housing Vermont. This was an important source of funding for a difficult downtown housing project that has been under discussion for decades. The project is ready to proceed pending the outcome of an appeal of Downstreet's permit that was filed by the Jacobs family.
Tax Increment Financing District
TIF districts are widely viewed as critical to the downtown development efforts in Burlington, Barre and St. Albans. The city's economic development plan recommended that we seek state approval to create a TIF district.
This year, Montpelier, along with five other cities, engaged in a successful lobbying effort to change Vermont law to allow for the creation of new TIF districts. The city has now retained a development company to help us obtain state approval for a TIP application.
A TIF district will allow Montpelier to designate an area for new development (likely either the Taylor Street area or Sabin's Pasture). The city will agree to create new public infrastructure to support development in the designated area, and in return one or more developers will make private investments that would not otherwise occur. Most of the tax revenue generated by the new private development will be dedicated to paying off the city's bond costs.
The City is working aggressively to submit a TIF application this fall or winter.
Impact on City Tax Rate
The City has been successful in pursuing these initiatives while maintaining a reasonable growth rate in our tax rate. The average annual growth in local spending since 2014 has been 2.23%, excluding the Recreation Department, which was added to the city budget in 2016, and spending associated with the new local option tax, which did not affect local property taxes.
As always, please do not hesitate to contact me at email@example.com if you have any comments or concerns.