Manager’s Corner: From the town’s Annual Report
February 28, 2024 | By Tom Leitz Editor’s note: This latest update from Waterbury Municipal Manager Tom Leitz is his message printed in the town’s Annual Report ahead of Town Meeting Day. The report contains information about local government over the past year including messages from the Waterbury Select Board, department heads, other appointed boards, commissions and committees, and from organizations seeking taxpayer financial support. It is available in paper copies at the town offices and library and around town. Residents may request one by mail or view a downloadable version posted on the town website.
Waterbury Municipal Manager Tom Leitz
I want to start by thanking all the town staff and volunteers who assisted with the flood response. Most people who volunteered did so in the immediate weeks after the July flood. However, there were several individuals who continued to work throughout the summer and were again called into service in December. The rapid response and cleanup would not have been possible without the large cadre of volunteers, and their work enabled town staff to focus on town infrastructure.
This past year the town absorbed roughly $185,000 in expenses associated with the flood recovery. That figure includes our actual cash expenses, along with staff and equipment time. The town was able to track the number of hours that our equipment was used as part of the recovery, and FEMA does reimburse for each hour. A primary purpose of the federal government is to serve as a large insurance pool for every municipality in the country, and FEMA will indeed reimburse the town for substantially all of our direct costs. I expect to receive those funds in 2024, although they are not budgeted because FEMA claims can often take more than one full year to be received.
The volunteers who assisted with the flood cleanup will also provide another lift to the town. Many of those hours were tracked and documented, and to date, a claim has been submitted to FEMA for roughly $33,000. The plan, pending voter approval, is to turn those funds over to Waterbury CReW (Community Resilience for the Greater Waterbury Area). CReW was created shortly after the July flood, and is helping homeowners directly in a manner that local government cannot. This includes direct assistance to homeowners who need financial assistance or some help in hardening their properties against future floods. In many cases there are property owners who are not eligible for FEMA assistance, and/or did not possess flood insurance. CReW is able to assist with filling those gaps in the system.
The town is also working directly on similar matters. Thus far two homeowners have sought FEMA buyouts. While this is a long process, the end result could be that FEMA removes these homes and the land becomes green space in perpetuity. The town would own the land, but there would be permanent development restrictions. The town has also submitted a grant application to FEMA that will allow for a broader study of flood mitigation projects that could be done along the Winooski River and Thatcher Brook corridors. We are hopeful we can identify projects that increase water storage capacity within the floodplain, thereby lowering the impact of a flood on our neighborhoods.
I am pleased to report the town has some resources to invest in our recovery. As of January 2024, the 2023 budget (across all major funds) has a surplus of $195,000 – despite our flood expenses. There are still some lingering bills, and there are always audit adjustments, but we will nonetheless realize a surplus that will ultimately be returned to the taxpayers. Further, roughly $478,000 in unspent or undedicated ARPA funds, which were provided to the town by the federal government, remain in the town’s general fund balance. Our general fund balance can be thought of as retained earnings.
Regarding the rest of 2023, a major story of the state and national economy is the labor shortage facing the country. The record low unemployment rates have put pressure on employers in a myriad of ways, and substantially driven up wage and benefit costs. Here in Waterbury, in an effort to better attract and retain staff, the selectboard adopted an updated employee handbook which modernized some of our benefits offered to employees and helped us to be more competitive when making job offers. Those efforts have served the town well. We are fully staffed in all departments and were able to hire a Recreation Director (Katarina Lisaius), Recreation Program Coordinator (Katie Mandych), Zoning Administrator (Mike Bishop), and a Tax/Utility Billing Clerk (Kia Nealy). Further, Neal Leitner began the year as our Assistant Zoning Administrator, and he is now our Planning Director.
Recapping 2023 initiatives
As I reflect on the past year, the town made headway on the following major initiatives:
A town Charter was authorized by the voters in November. The charter vote allowed for the town to seek legislative approval to enact a 1% local option tax, and clarified some of the manager’s authority. I am pleased to report the charter language pertaining to the manager’s authority passed with 83% support, while the local option tax had 68% support. Now that local support has been secured, we are hoping the charter is adopted by the legislature this session and signed into law by the governor. If that occurs, the local option tax will have a positive impact on the 2025 budget.
The town continued to work with Downstreet Housing and Community Development to advance the affordable housing development at 51 South Main Street. The town partnered with Downstreet and was awarded a sales tax reallocation grant of $127,225, which will be used on construction costs. We remain hopeful that construction will begin in 2024, and have no doubt the project will be completed as initially proposed. The project is now fully permitted, and we expect Downstreet to formally purchase the property this summer.
Shortly before the July flood, the town engaged with a consultant to conduct staff and board inclusivity training. Since then the town applied for, and was accepted into, the Welcoming and Engaging Communities program, which is part of an effort by the Vermont League of Cities and towns. The focus of this effort is not only inclusivity; rather, is a broad campaign that also focuses heavily on ethics. As part of this effort in early 2024 all town employees, elected officials and volunteer board members will be surveyed to gather data on their experience working for the town. This will not just be a survey related to how they interact with town management or their co-workers, but also how the public interacts with them.
This year the selectboard adopted an updated employee handbook, which contains all of our personnel policies. The prior handbook was adopted in 1991, so updating the handbook was long overdue.
The selectboard adopted a road salt reduction plan in the fall of 2023. This includes roughly 3 miles of road (about 10% of our total paved roads) that are flat with lower speed limits. This plan was driven by a desire to reduce the amount of salt flowing into our waterways, which has a clear negative environmental impact. We may revise this plan in future years to add additional roads, and town staff are also going to research switching, in whole or in part, to using a salt brine on our roads.
In 2023 a local sand and gravel pit closed. This was located in Bolton and since that closure, we have had to secure material at pits in Barre. This has an immediate cost impact on the town, and we are researching some options for the future. First, our next vehicle purchase will likely be a tandem truck, which will simply allow for more yards of material to be transported per trip. Second, we have begun to explore a partnership with some of our neighboring towns to identify and possibly develop alternative locations.
Highlights in the 2024 budget
Looking ahead to 2024 and the spending plan, there are a number of significant initiatives and changes.
First, some budget mechanics and formatting have been changed. In prior years the highway and library were separate “funds.” In budgeting and accounting terms, this meant that tax dollars were transferred into these funds. However, when the town is audited these are not separate entities – they are all a part of general town government and operations. Therefore, for the 2024 budget, these funds have been combined into the town's general fund. This simplifies the budget, which will now more closely match our audited financial statements. This change does not reduce the authority of the Library Trustees, Library Director, or of the Director of Public Works, who are still responsible for executing their budgets.
In prior years the town also had a large number of capital funds. There was a paving fund, a highway infrastructure fund (which consisted of sidewalk projects, work on public works buildings and bridge work), and a highway equipment fund. These are now combined into one fund as all of these funds fall under the broader tent of highway capital items.
There were also two separate funds for the fire department: one for buildings and one for equipment. These are also combined.
The town also has a capital fund for parks and recreation, and this is unchanged.
Beyond the mechanics, I believe the 2024 spending plan contains a reasonable tax increase, and all core town services are maintained or increased. Some of the key highlights are detailed below.
The most critical change in the 2024 budget pertains to the library. When I analyzed salaries and wages paid to Library staff, as compared to other town staff performing similar duties, I made a determination the pay was inequitable. The 2024 budget contains funding to correct this issue, which I believe is of critical importance. To help offset the cost increase the budget contains utilizing $45,000 from the Library Trust Fund, as compared to $30,000 in prior years, with the full intent and promise to return to the $30,000 amount in 2025.
As of the time of this writing the Library Trust Fund has over $600,000, and returns on their investments in 2023 were strong. Nonetheless, the Library Trustees have a legal role in overseeing the fund, and they expressed concerns about withdrawing from the fund to pay for operational expenses. Indeed, this was a valid concern, as trusts are generally established to protect against financial shocks, and to finance capital projects. Using these funds for an ongoing operational expense should indeed be questioned. Through this process, I developed a greater appreciation for the library trustees and their advocacy for the library.
The selectboard is tasked with balancing the overall operational needs of the town, and the selectboard is ultimately responsible for property tax increases. While the conversation was sometimes challenging, this type of debate shows the value to the community of having engaged and thoughtful elected officials who have different roles and values, but all have the best interests of the community at heart. In my judgment, this type of debate and compromise represents local government at its best.
The budget for paving is increased from $405,000 to $450,000. The core of our paving plan includes Ashford Lane and Kennedy Drive, which are the top priority. We would also like to pave Union Street, and shim and mill Kneeland Flats. The Kneeland Flats project will take 2 to 3 years to complete. Finally, there is a short section at the curve near Kneeland Flats and Ripley Road, which is currently gravel. We would like to pave that section to eliminate some of the maintenance required during mud season. The blacktop would extend to the intersection with Ring Road. In years 2025 and beyond I would love to continue to grow the paving budget.
The Planning and Zoning Department has new staff, and we are pursuing an initiative to modernize some aspects of their operations. The budget contains funding to enact an online permitting system, which will allow individuals to complete permit applications electronically. We have also increased our legal budget to prepare for potential zoning enforcement actions. The town Development Review Board has expressed a desire for staff to undertake zoning enforcement, which has not been a priority for some years. Given that, we plan to engage with legal counsel to ensure we are taking the correct approach, in a manner that helps us to avoid future legal conflict. The budget reflects these costs, a portion of which are offset through increases in fees. For context, we reviewed our zoning fees and were unable to find a record indicating when they were last updated. In January the selectboard adopted a new fee schedule that raised our fees to be consistent with other towns of similar size.
The town budget for public safety expenses increased in 2023, and that trend continues in 2024. Of critical importance is an increase in ambulance service fees from $26 to $35 per capita. Waterbury is served by the Waterbury Ambulance Service, Inc., which is a private, nonprofit organization. In reviewing financials with the Ambulance Service Director, it is apparent to me this fee increase is justified, and we should expect a further substantial increase in 2025. The town ultimately needs a stable and responsive ambulance service, and they do actively seek other sources of revenue. Their main challenge is that private insurance, along with Medicare and Medicaid reimbursement rates, have not kept pace with inflation or their operational costs. As a result, town taxpayers are directly impacted.
The town’s contract with the state police expires in June of 2024. The budget contains a funding increase to continue our current arrangement, which allows for two full-time officers to serve Waterbury. In my short tenure here, I have had a number of conversations related to the state police contract and the potential for a future town police force. My observation thus far is the town is reasonably well served by the state police. We are certainly missing a number of advantages that come with a locally controlled police force, most critically the ability to rapidly and responsively deploy a small cadre of officers in response to community needs. However, even if I was convinced there was a need for a town department, there is a dire shortage of available police officers and interested recruits. When I applied for this position (in the summer of 2022) I was asked to perform an analysis and write a short memo related to creating a town police force. I recall noting in that memo that creating a town police force was a theoretical exercise due to the shortage of available officers, and I remain convinced of that today.
The town Highway Department, excluding capital expenses, is level-funded almost to the penny. The department lost a mechanic in the fall of 2022, and after some initial effort, we have abandoned trying to fill that position. The budget does contain funding to hire a new employee, who would be split between the town and EFUD. The town would pay for 1/3 of the individual’s salary and fringe expenses, and receive 1/3 of the individual’s time. The new hire would focus on maintenance work at town parks and cemeteries.
Aside from paving, the highway capital budget contains $75,000 for bridge work. This pertains to work being done on the Stowe Street bridge, of which 95% is paid by the state; the town’s 5% share amounts to $170,000. I anticipate our expenses will be paid over several years, and we have paid nearly $35,000 already for engineering and design. The capital fund also contains $20,000 for some culvert replacements and a further $20,000 for some minor work on the highway garage.
The Fire Department features an increase due to dispatch costs. The town is engaged with the Capital Fire Mutual Aid, which serves 27 municipalities in central Vermont, along with a number of police and ambulance services. The cost increase is largely tied to new infrastructure investments that are necessary to have a reliable system.
The warning before the voters also includes a request for a replacement fire truck at a cost of $380,000. This replaces a truck that is 22 years old, which was initially planned to be purchased several years ago. The department was able to delay the purchase through routine and effective maintenance. This is a 2,000-gallon tanker truck that is built to the specifications of the department. The town currently has a large cadre of volunteer firefighters, and our equipment is high quality. I hope we can maintain these standards going forward, and supporting this equipment purchase is a strong step in that direction.
Finally, near last but certainly not least, the Recreation Department was finally able to complete a long-standing plan of hiring two full-time employees. In the summer of 2023 Katarina Lisaius was hired as our Recreation Director, and towards the end of the year Katie Mandych was hired as the Program Coordinator. The plan for 2024, which is reflected in the budget, is to improve our staffing for the afterschool and summer camp programs, as well as our array of programs during the year. That is funded through increased user fees, which have not been increased anywhere near the rate of inflation. After experiencing the summer camp program firsthand, I am convinced the increased expenses for staff are necessary to have a safe program that is enjoyable for the children. In short, in prior years our cadre of summer staff was heavily weighted towards high school students, and we will rebalance in 2024 towards a greater mix of adults.
The remainder of the town budget features little change and is generally level-funded. Every attempt was made to bring forth a tax increase that was less than the rate of inflation.
Also on the horizon
I also want to discuss a few initiatives that are actively being pursued but do not require taxpayer funds. First, the state is actively working to transfer the Stanley Wasson site to the town. The site was recently surveyed, and we are actively working with developers on proposals to construct apartments. The current plan is for a mix of market rate and affordable or senior housing. We hope to hold public meetings in the spring or summer to present conceptual plans and believe this proposal would be a significant boost to our rental housing stock.
We are also considering concepts for a town-owned parcel on Armory Drive (near Brookside, not to be confused with Armory Avenue). The center portion of the lot has a storage building, and there is a small parking lot used by the school. However, the portions of the lot that abut High Street and Hillcrest Terrace appear to have some development potential. We are evaluating those options, and within a few months intend to present potential development options to the Housing Task Force and ultimately the selectboard. The question regarding this lot, in my judgment, boils down to a policy judgment about how much density is desired by the town. While not as large as the Stanley Wasson site, there is some potential here to address the lack of affordable housing in Waterbury. I give credit to Mike Bishop, our zoning administrator, for bringing this concept to public light. While the town has owned the land for some years, there development potential of the lot was not considered until Mike brought forth this creative idea.
The past year, which was my first year as manager, was challenging in many respects. We faced two significant natural disasters. While our roads fared reasonably well during the spring mud season, we had some major challenges during the unwelcome December mud season. The town had a complete turnover of its recreation leadership team during the summer, and we had to fill vacancies in planning and zoning. Nonetheless, we ended the year well-positioned with a strong team of employees and were able to generate a budget surplus for the taxpayers. This was only possible because of our team of dedicated employees, board members and volunteers, and I owe them all my thanks. I hope the community sees their work and shares my sentiment, and I hope the proposed budget meets with your approval.
I look forward to answering your questions on Town Meeting Day and thank the selectboard and residents of Waterbury for your support over the past year, and the opportunity you have provided to me and my family.
Tom Leitz is Waterbury’s municipal manager. Reach him at 802-244-7033 or tleitz@waterburyvt.com.