On deck: Select Board considers charter/tax question; DRB gets first look at 51 S. Main apartments
September 1, 2023 | By Lisa Scagliotti At meetings next week, the Waterbury Select Board will consider moving ahead on a measure to create a town charter to allow the town to levy local option taxes and the Waterbury Development Review Board gets its first look at plans for a three-story apartment building at 51 S. Main Street.
A tour bus visits Stowe Street shops and restaurants. File photo by Gordon Miller
Select Board on Tuesday
Because Monday is the Labor Day holiday, the Waterbury Select Board rescheduled its regular meeting to Tuesday at 7 p.m. in the Steele meeting room and online via Zoom. One of the items the board will discuss is a draft proposal to create a town charter that would give the town government the ability to levy local option taxes. It also would aim to clarify some roles of the municipal manager regarding personnel procedures.
Municipal Manager Tom Leitz made a presentation at the Aug. 21 board meeting that included draft language of a simple charter that would address both of these topics. Waterbury is incorporated as a town under state laws and does not have a separate charter that enumerates other powers beyond existing statutes.
Town officials have been discussing the possibility of adding local sales, rooms and meals taxes as revenue sources in addition to property taxes. In order to charge them, they must be permitted by a town charter. Adopting a charter requires multiple votes: first by the Select Board, then by a majority of town voters, then by the state Legislature. After those hurdles are cleared, the governor’s signature is required.
Leitz outlined a timeline that would allow for a town vote before the end of the calendar year which would tee up a proposal to be written as a bill for the Legislature to consider when it convenes in January. He explained that if all steps moved forward, it typically takes the state Tax Department approximately six months to implement a new tax, which would mean new taxes could likely go into effect by early 2025.
Currently some 25 Vermont municipalities have some form of local option tax in place. It would add 1% to the sales tax (currently 6%), the rooms and meals tax (both currently 9%) and the alcohol tax (now 10%).
Leitz estimates that the new taxes could bring in over $600,000 in new revenue to town government. He said that would not mean that property taxes would be lowered, but that they likely would increase at a lower rate than they have in recent years. He pointed to multiple potential uses for the additional funds such as for paving projects, capital purchases such as vehicles, and flood mitigation efforts.
Both state Reps. Theresa Wood and Tom Stevens attended the Aug. 21 Select Board meeting and said they agreed that the proposal was a good idea that they would help guide through the legislative process if voters approve of the measure.
The discussion also included an explanation of how a third of local option taxes collected go to the state which in turn uses those funds to pay municipalities in lieu of property taxes where the state owns property (called a PILOT payment for short). Waterbury, for example, received just over $388,000 from a state PILOT payment in 2022 for the state office complex, forest and park lands. If more municipalities levy local option taxes, the pool of PILOT funds for the state to distribute grows, which would likely mean an increase in Waterbury’s share of that revenue as well, Wood pointed out.
Leitz said the estimates of revenue Waterbury would gain from the new taxes are based on the portion remaining after the state share is deducted.
Although there is little data available to document how much local spending there is by visitors making retail purchases, dining in restaurants and staying in hotels in Waterbury, Leitz noted that the option taxes would draw from a wider pool than the property tax. And given that other nearby communities such as Stowe, Williston and Montpelier all have such taxes, local officials say it’s time for Waterbury to tap into this revenue source as well.
“Not having it puts us at a competitive disadvantage,” Leitz said.
“We as a community are missing out by not having the ability to have the local option tax,” Wood said. “I for one have been anxious about not getting on this bandwagon.”
Stevens and Wood noted that there has been some discussion in the Legislature about changing the ability for municipalities to charge local sales taxes. “I think time is of the essence,” Wood said about Waterbury acting on the matter now.
“I think people will see it as a clear benefit,” Stevens said. “It makes perfect sense.”
Waterbury resident Tom Gloor, who has been a strong advocate for merging the Edward Farrar Utility District into town government, raised the questions of whether having a town charter could facilitate that change. The utility district was created in 2018 when the village of Waterbury municipality was dissolved.
The state and local officials in the discussion agreed that is a separate matter. Stevens called the charter a “tool” that could be used in the future for local government.
The other elements of the draft charter proposal would clarify details of how the municipal manager handles some personnel matters. One key provision addresses how town staff are hired, putting that authority with the municipal manager rather than relying on volunteer boards to conduct job interviews as is the case with some positions now. Leitz points to a state statute that requires the Planning Commission to recommend hires for the zoning administrator job to the Select Board and that individual actually works with the Development Review Board and is supervised by the town manager.
“This would make a lot more sense,” remarked former Planning Commission Chair Ken Beliveau who attended the board meeting where this was discussed.
Another provision would note that the manager consult with the select board on department head hires and the manager could defer some departmental personnel decisions to those department heads.
Revised language for these proposals will be discussed Tuesday.
Leitz also writes about charter and local option tax proposals in a column posted in the Opinion section this week.
The Select Board on Tuesday could take action on the charter measure to then move on to the next step to schedule a special town vote by Australian ballot later this fall.
Also on the board’s Tuesday agenda:
A visit from Vermont State Police Lt. Charles Winn, commander of the Berlin barracks. The state police provide police services to Waterbury under a contract agreement.
Consideration of the state Legislature’s action granting the town of Waterbury the right to purchase the state-owned property where Stanley and Wasson Halls were located at the State Office Complex. The town has expressed interest in the 2.5-acre property near the intersection of Randall Street and Park Row for a possible future housing development site. The state Buildings and General Services Commissioner Jennifer Fitch has asked for an official notification of the town’s interest by Oct. 15. The town would then have until June 1, 2024 to negotiate a purchase agreement.
Continued discussion of appointing a disaster preparedness committee to formalize steps taken during and following the July flood.
The Select Board’s agenda with the Zoom link to join remotely is online at waterburyvt.com/boards/selectboard.
Wednesday: Downstreet Housing at the DRB
A drawing from GBA Architecture in Montpelier depicts the three-story apartment complex proposed by Downstreet Housing & Community Development for 51 S. Main St. in Waterbury.
Downstreet Housing & Community Development is moving along in its plans to build a three-story apartment building at 51 South Main St. that it will purchase from the Edward Farrar Utility District.
The district owns the property which formerly was the site of the town and village offices and police department. The building was severely damaged by flooding by Tropical Storm Irene in 2011 and new municipal offices were relocated to new construction at 28 N. Main St. The .8-acre lot has been used as a municipal parking lot for the past several years.
Voters in the utility district voted in October 2022 to sell the property to the Barre-based nonprofit housing agency for $138,000 to construct affordable apartments. The organization already owns and operates three apartment developments in Waterbury.
The Development Review Board has the Downstreet application for conditional use approval to build a 26-unit multi-family building as its only agenda item for its meeting at 6:30 p.m. on Wednesday, Sept. 6. The meeting will be held in the Steele meeting room and online via Zoom.
Downstreet has submitted architectural drawings of floor plans and exterior designs that are posted on the DRB’s page on the town website.
Because the property sale has not been completed, the utility district is listed as the property owner and the applicant is listed as Marsh House Apartments Limited Partnership.
Project manager Nicola Anderson at Downstreet said the project has grown in cost as the design plans have come together. The cost estimate now is $13.8 million and the agency still needs to secure the full amount of funding, she said.
“Securing a partial award and then securing permits will allow us to have a stronger application this next funding cycle,” she said noting that grant funding is key to developing affordable housing. “We are hoping to be fully funded by May 2024 and then could start construction late summer 2024.”
The DRB agenda has the Zoom link and is posted online at waterburyvt.com/boards/drb. The application with project drawings is on the same webpage and can be found here.